2. Brazil Pharma Day – Agenda
9 am - 9:30 am BRPH - Strategy & Integration
• André Sá / Sara Rezende
9:45 am - 10:45 am Commercial
• Carlos Dutra & team
11 am - 11:30 am Shared Service Center - SSC
• Flávio Sanchez
11:45 am - 12:15 am People and Management
• Gabriel Guioto & team
12:30 am - 13 pm Operations
• Rodrigo Silveira & Operations team
13:15 pm - 14:30 pm Lunch – FARMAIS
• Renato Lobo
2
4. Drugstores
A Growth and Accelerating History
Sales Performance in the Brazilian Pharmacy Retail Sector from 1996-2011 (R$ Billion)
43.00
36.00
30.20
26.40
23.60
21.50
19.20
17.20
14.80
13.10
11.20 11.60
9.40 10.30
8.30
7.00
1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011
Drivers Macro Drivers Micro Timing
Fragmented Formalization and
Income Growth Population Aging Generics Drugs Regional Brands
Market Consolidation
Source: IBGE. Farmácia Popular. Health. OMS IMS. Brazil Banco Central do Brasil 4
5. Geographical concentration
… Strong concentration in the Southeast
Low concentration out of the Southeast region
Pharmacies per region (2011) Brazil Pharma vs Competitors (2011)
High density
Low density
Competitors’ focus
Market Growth - CAGR (2007- 2011)
18.0%
16.2%
14.0%
SP Brazil BRPH Regions
Source: IMS Health 5
6. Brazil Pharma: Footprint
Largest Drugstore Chain in Brazil: National Presence
232 Owned stores
1
114 Owned stores
103 20 1 10
118 Owned stores
15 75
201 Owned stores
7
114
10 352 Franchises
89
REGIONS 19
Owned stores Footprint
1.017 stores
North 104
Northest 242
Midwest 118
8
Southeast
193
South 201 1.017 stores
665 owned stores
352 Franchises
05 Distribution centers
Source: Brazil Pharma
6
7. Brazil Pharma: Leadership Position
...leader in four out of the five regions we operate
Ranking by region and Drug Store Chain
1
Number of Stores
North Northeast Mid-west Southeast South
1o
2o
(2)
3o n/a
(2) (2) (2) (2) (2)
4o n/a n/a n/a n/a n/a
Source: Brazil Pharma, Abrafarma 7
Note: (1) Ranking by number of owned stores as of Dezember 31, 2011 considering the four largest Drugstore chains in Brazil; (2) n/a: Other chains do not have operations in the region
8. Brazil Pharma: Market Penetration
Already contracted Growth
Large Growth Capacity Maturation of Owned Stores
Organic Growth (# owned stores) (2Q12)
Market Growth Diversified Sales Mix
(CAGR07’-11’) (2Q12)
Abrafarma
Brazil Pharma
HPC Branded Generics
8
10. Brazil Pharma: Market Consolidation
Strategic Growth based on M&A and Organic Growth
IPO @ Platform Actual Platform
(1Q11) (2Q12)
663 Points of sale 1,017 Points of sale
302 Owned Stores 665 Owned stores
361 Franchises 352 Franchises
60 Owned stores
232 Owned stores
1
114 Owned stores
89 Owned stores 118 Owned stores
361 Franchises
352 Franchises
153 Owned stores
201 Owned stores
Owned stores
Franchises
Distribution Center
(1) Sant’Ana’s Distribution Center suffered a fire on December 2011. A new distribution center will be inaugurated in the second half of 2012 ; (2) Includes 11 stores acquired from Estrela
10
Galdino on April 2012 and added to Sant’Ana’s store count in June 30, 2012.Therefore they generated no revenues in 2Q12.
11. Operational Performance since the IPO
… Not only in growth, but also in performance
Increasing operational efficiency and stores productivity
Sales Performance BRPH @ IPO (1Q11) BRPH 2Q12
# of store employees -10%
per store
22.6 20.4
Sales per store level employee
34.4 54.9
(R$ thousand) +60%
EBITDA (ex-G&A) per employee1
(R$ thousand)
3.7 6.4 +74%
Administrative Performance
# of administrative + distribution -8%
center employees per store
3.8 3.5
EBITDA per employee2
1.5 3.0
(R$ thousand) +98%
Notes: (1) Considers total stores and distribution centers employees. 11
(2) Considers total employees (store, distribution centers and administrative).
13. Brazil Pharma: Our History
Great regional companies into one excellent National Company
186 years of
History IPO
1945 1965 1975 1994 1994 1995 2009 2011 2012 2013E 2014E 2015E 2016E
13
14. Brazil Pharma: Your first option!
Distinct Companies
Holding
Corporate
Unique Company
Administrative
Commercial Operations
(SSC)
#1 for Suppliers #1 for Customers #1 for Talents
Source: Brazil Pharma 14
15. Our Structure – Improvement phases
Corporate
Commercial Operations Administrative (SSC)
Joint Management Mapping
negotiation Team
1 1 1
Team Training and
Regional Plugging-in
centralization
2 2 Leardeships 2
Continuos Continuos Continuos
improvement improvement improvement
3 3 3
1. Platforms operate separately but with 1. Management Team to monitor the 1. Requirements understanding, drawing
strict Corporate guidelines; Operations’ Team of each regional platform: the scope and processes;
Culture dissemination and performance
2. Centralization of Procurement 2. Plug-in platforms into the SSC.
monitoring;
department: unification of regional talents
3. Through quality tools, in the quest for
into one single team;
2. Training and formation of Regional constant improvement in its processes
3. Commercial intelligence: relationship leaderships; and productivity gains.
with the industry, sales mix improvement,
3. Centralized operation’s management.
scale in campaigns, standardization of
DC’s and Logistics.
15
17. Estrutura
Commercial Director
Carlos Dutra
Logistic Manager Procurement Manager Trade.Mkt Manager
Jadir Tavares Renato Stefanoni Rovilson Apolinário
17
18. Procurement
Procurement:
Centralize operations/negotiation for competitive gains
Strengthen relationship with suppliers
Acknowledgment as an unique and national Company
18
19. Procurement
Trade Marketing:
Rationalization and optimization of Brazil Pharma sales mix
Store layout adjustments providing a better consumption experience
Use of tools to optimize the stores area (profitability and sales)
19
20. Procurement
Logistics:
Physical space in line with the Company’s vocation to growth
Standardization of the Distribution Centers’ operational process (systems, indicators, etc.)
Operational excellence (storage, transportation, safety, productivity)
20
23. Prucurement and Local Trade Marketing
Purchase /
Trade
Corporate
Sell In
Sell Out Team / Execution
• Trade Marketing;
• Stores visitation;
• Generation of local demand;
• Campaings;
23
24. Procurement structure
Purchase / Corporate Trade
• Orders;
• Negotiation;
• Supllier service;
• Controls;
Purchase / Trade
Corporate
Sell Out Team / Execution
• Trade Marketing;
• Stores visitation;
• Generation of local demand;
• Campaings;
24
25. Procurement structure
Purchase / Corporate Trade
• Orders;
• Negotiation;
• Supllier service;
• Controls; Sell Out
Purchase / Trade
Corporate
Sell In
Sell Out Sell Out
Sell Out Team / Execution
Sell Out • Trade Marketing;
• Stores visitation;
• Generation of local demand;
• Campaings;
25
26. Purchase: Commercial intelligence
Analysis:
Sales (Market growth vs. sales)
Profitability per category, manufacturer, product (tax issue, revision of commercial conditions)
Stores profitability
Optimized inventory (Distribution center & stores)
26
27. Timetable: Procurement centralization
May/12 Jun/12 Jul/12 Aug/12 Sep/12 Oct/12 Nov/12 Dec/12 Jan/13 Feb/13 Mar/13
Rosário
Sant’Ana
Mais Econômica
Big Ben
Guararapes
Improvement of Process and synergy gains
Improvement of systems and entries
Concluded Planned GoLive
27
34. Logistics
...Operational excellence supporting sales and growth
New DC – Distrito Federal
Situated at Brasília
Services Midwest region;
Storage area: 5,000 m²;
Ceiling: 8 mts;
3.6 thousand pallet position;
Production capacity of 200,000 units/day;
Storage capacity: up to 13,000 SKU;
Operates with WMS system.
34
39. Logistics
...Operational excellence supporting sales and growth
New DC – Bahia
Situated in Camaçari
Services Bahia state, may also service Sergipe state
Storage area: 9,000 m²;
Ceiling:12 mts;
6,000 pallet positions (reaching up to 8.6 thousand);
Production capacity of 400,000 units/day;
Storage capacity: up to 15,000 SKU;
Operates with WMS system.
39
45. Project Phases
Understanding the “as is”
Drawing the “to be”
Preparation Brazil Pharma’s Process Kit
Physical space
Dimensioning
SSC’s Modus Operandi
Ensure scalability of SSC
Transactions Accounts payable per HC (daily) E
X
Productivity A
Brazil Company Brazil Company
M
Pharma X Pharma X P
100 200 150 200 L
E
Start Momentum 2
Plug more operations into the SSC
Through productivity efforts, we are able to plug-in
“Plug in”
the platforms operations with gains of scale in HC
Using quality tools we’ve created groups responsible for
process improvement s
Continuous improvement
(ESTABILIZATION)
45
46. Brazil Pharma’s Processes Kit
S I P O C MATRIX CATALOGUE OF SERVICES ANS VS Ano
SIPOC
Cadastro de pessoas físicas
Início Fim
Receber solicitação de cadastro Arquivar fichas
Suppliers Inputs Process Output Customers
S I P O C
1
1) Aceita cartão mais vantagens
Receber solicitação de (CMV) 1)Cliente
Cliente Solicitação de cadastro
cadastro 2)Não aceita cartão mais 2)Lojas
vantagens (CMV)
2
Cliente Ficha Prencher ficha CMV Ficha preenchida Loja
3
Ficha preenchida
Cliente Ficha CMV preenchida e
com todos os dados - Conferir e protocolar ficha Call center
Lojas protocolada
verificação do gerente
4
Lojas Receber fichas de
Fichas Fichas recebidas Call center
Call center solicitação de cadastro
FLOW DIAGRAM MATRIX OF OPERATIONAL RISKS SSC CONTRACT
46
47. Service model of the SSC
The SSC will be as a new department responsible for providing adminstrative services to Brazil Pharma
Projects Performance
Customers 2 3
Admission / Dismissal
Advanced Service
Administrative Operational Level
Agreement
Stations
Areas
Continuous improvement
Finance (Administrative)
Operational groups
Stores/DC/Call
Center
Call Center
Administrative Support
Employees
Verification and Gathering
Suppliers Profit Analysis
Regulators IT Support 4
Service Level
Agreement
Operational Groups 1
5
HUMAN RESOURCES AND GENERAL SERVICES
47
48. Macroprocessing
SSC: plugging-in for Excellence in Services
In SSC, by plugging-in the platforms activities, we get an integrated view of processes, as we put together under a
single management activities that were sequential and correlated, but previously held separated, increasing the
control over overall quality.
Typical Structure Process-Oriented Structure
• The Processes “cross over” the departments • Departments lose their existence purpose.
Characteristics
• Organizational structure is based on departments
• Organizational structure is a consequence of the
• Management measurements are department-based processes.
• Management measurements are process-based
• Fragmentation of processes, which have several • One single owner for each macroprocess
Impacts
owners • End-to-end integrated measurement in product
• Difficulty in product management generation
1. From Order to Supply
Accounts Payable
Accounts Receivable
Treasury Back-office
Equipments and Helpdesk
Purchase of Indirect Items
Payroll
Direct and indirect Taxes
Accounting
2. From Request to Payment
Examples
3. From Admission to Dismissal
4. From Closing to Reporting
48
49. SSC Operation
Objective: Channel for doubts and information supply in
order to give an immediate response to the user URA
1 IT
2 Human Resources
SSC
3 Returned checks
Admission to Dismissal
Service Station
4 Financial and Administrative
Advanced
Services
Continuous improvement
Financial Administrative
Management and Level 1 Problem Solving
Operational Groups
Call Center
Adminstrative support
Satisfaction survey
Verify and collect
• Very satisfied
Profit Analysis • Satisfied
• Indifferent
IT Support • Unsatisfied
Finalized calls: • Very unsatisfied
100% surveyed by
HUMAN RESOURCES AND GENERAL SERVICES phone calls
Calls from SSC manager in order
to improve attendance
49
50. Attendance Level
Central service
The volume of problems solved in each level influences quality and costs of the service provided.
e.g: Online Payment e.g: Payment e.g: Invoice not
Status Questions found
e.g: Payment not in
compliance w. rules
Special
Self Service Especialized Cases Decision- Exception
SSC Customer Attendance Making
Resolution cases
service
EXECUTIVE
HIGH OPERATIONAL COORDINATOR
CENTRAL
TECNOLOGY GROUPS
SERVICE
RESOURCE
Central
Attendance
Scope
• Lower operating cost • Higher operating cost
• Longer implementation • Shorter implementation
• Higher investiment • Lower investiment
50
51. Requirements via Central Service
Real instance
PHONE
Child birth !!
E-MAIL Central Service
WEBPAGE
1 2
Collaborator contacts Brazil Pharma for
registration of Income Tax for its new
Opening Call
dependent, health plan and odontologicall
plan for the child
Share Service Center
Advanced Service Station
4 3
Update of benefits and database from the Collaborator delivers the child birth
collaborator certificate
51
52. Central Service
Volumetry
Indicators Volumetry Jun/12 Jul/12 Aug/12
# Received calls 8,030 9,856 10,055
Indicator (“ANS”) Goal Jun/12 Jul/12 Aug/12 # Dropped calls 408 371 255
Call index - # of calls answered in 1º Level 40% 40.4% 47.2% 43.1% # Total of opened calls 14,336 18,877 18,413
Calls solved within timeframe index 90% 89.9% 94.3% 93.7%
Dropped call index 8% 5.1% 3.8% 2.5%
Main developments
Average time on waiting (ATW) 15 sec. 15 seg. 11 seg. 07 seg.
Average time of attendance (ATA) 5min 4:19 min 4:23 min 04:06 min • Increase in HC for e-mail service
• Training of new attendants
Satisfaction attendance index 85% 77.4% 77.7% 85.3% • Open-line for problem solving
• Dedicated inbox for certain subjects
Prior Projects/Acts Status
Act Period
Revision of scripts together with N2 Sept/2012
Revision of process together with N2 Sept/2012
Training for satisfaction survey Sept/2012
Improvements in the satisfaction survey Sept/2012
Modification of TV screen’s Lay-out Sept/2012
In time Concluded Delayed
52
53. SSC Operations
Objective: Support on improvement and optimization of
the process in order to perpetuate operational excellence Stock exchange of Excellence:
Quotation of operational areas rely on
“ANS”/”ANO” attendance
The better operational performance in the
year receives a recognition prize
Incentives a “healthy competition” among
Admission to Dismissal the operational groups
Postos Avançados
service station
Advanced
de Serviços
Continuos improvement
Financial Administrative
Operational groups
Central service
Adminstrative support
Verify and collect
Verification of results
IT Support
HUMAN RESOURCE AND GENERAL SERVICES
53
54. Stock Exchange of Excellence
Stock Exchange of Excellence - June/12
1º Managerial information R$ 149.9
2º Central service R$ 148.9
3º Financial Administrative R$ 147.43
4º Administrative support R$ 147.43
5º Admission to Dismissal R$ 146.07
6º IT Support R$ 140.19
7º Verification and Gathering R$ 140.08
8º Accounting close process R$ 126.08
54
55. SSC Adding Value
...more with less
incorporate (plug-in) more activities into SSC
by increasing productivity
Increase of efficient headcount, adding value
to new demands of the SSC
More with less
55
56. SSC Adding Value
NEW CORPORATE DEMANDS
Managerial Rental Purchase of
Information indirect Quick Wins
Management SG&A
Area materials
(synergies)
SSC BRPH
Employee BI (overall
headcount mapping) Leasing contracts
Purchase centralization Work group dedicated
control
EBITDA per store of non-tradable items to looking for economic
Payments follow-up opportunities through
Sales diary (e.g.: travel, telephony,
improvement of process
Leasing expenses
Expenses etc..) and (or) controls
control
Purchase price (COGS)
56
57. SSC Adding Value
Quick Wins SG&A...
After bringing the activities into the SSC, the continuous process improvement of has already provided savings...
Saving Saving
Description (R$/month) (12 months – R$)
Deduction in transportation
Transportation voucher voucher benefits related to non R$ 7,200 R$ 86,400.00
justified work absences
Deduction in meal voucher benefits
Food/Meal voucher related to non justified work R$ 9,600 R$ 115,200.00
absences
Triennium & Configuration of the system to
R$ 5,000 R$ 60,000.00
Quinquennial correct undue payments
Elimination of duplicated
Vacation scheduling R$ 10,000 R$ 120,000.00
vacation benefits
Average for vacations Payment adjustments R$ 11,000.00 R$ 132,000.00
Total R$ 42,800 R$513,600
57
58. CSC Agregando Valor
Quick Wins SG&A...
Saving Saving
Description (R$/month) (12 month – R$)
Elimination of undue working day
Working day R$ 2,200 R$ 26,400.00
payment 220h to 110h.
Cash flow shortage Intelligence on payments schedule R$ 3,000 R$ 36,000.00
Consigned Conciliation of consigned loans R$ 700.00 R$ 8,400.00
Assiduity award Parameterization of the award R$ 10,000 R$ 120,000.00
payment
Total R$ 15,900 R$ 190,800
Total profit recorded R$ 58,700 R$ 704,400
58
59. Central of Indirect items Purchase
Focus on implementation
Policy Control Price
Identify existing policies and Define control process; Validate baselines already
revise when needed; proposed by consultancy
Define mechanism to capture companies;
Define policy of use and gains ;
consumption for all working Accelerate the activities
fronts; Define mechanism for already negotiated by the
monitoring and reporting of consultancies companies
Measure gains from new realized gains. (realize gains ASAP);
policies application.
Initial focus: travel,
connectivity (Mobile and fixed
telephony, data...);
Prioritize negotiation of the
most profitable fronts;
Seek baselines for new
fronts of negociation.
59
60. Importance of policy and process definition
Gains..
Negotiation only Policy + Process +Negotiation
Policy
application
Prior cost
Process
After negotiation cost controls
Negotiation Saving return to the
Absorbed saving
Company’s cash flow
used in others
operations
60
61. Travel Control - Example
Travelling request
Travel policy
- Request in 5 days prior
- Cheaper price for the hour
- Duble room accomodation(whenever
possible)
- Reimbursement of R$ 35.00/day
Verification of plane ticket
request x Area budget
- Policy No
Travel justification
Yes In accordance to
Price quotation rules?
Director approval
request
Authorization - Manager approval/Area Director
request
Ticket issuance
Control
Send ticket to Send status to Justification/ Action
Real x Budget
petitioner Board of directors plan
(Managerial info.)
(Managerial info.) (Board of directors)
61
62. Synergies – Negotiation front
Fleet
Fuel
Work fronts led by internal team +
Travel
consultancy;
Insurance
Potential gains analysis for
Mobile Telephony prioritization of the fronts to be
implemented;
Uniforms
Fixed Telephony Definition of control policy and
process;
Bags
IT material
Synergy opportunities analysis.
Coils
Office material
Staff clock
Cleaning material
62
63. SSC Roadmap and Projects
2011 2012 2013
Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec Jan Feb Mar Apr May Jun Jul Aug Sep
Preparation / implementation Estabilization
GO
LIVE
Farmais, Corporate Continuos improvement
and Mid-east
GO
Corporate Closing
LIVE
GO
Mais Econômica
LIVE
(DP)
Bahia GO
(PD & Financial) LIVE Plug-in “as is”
Project “SSC Adding Value”
Kick off em South GO
09/24 (all areas) LIVE
Big Bem GO
Quick Wins
(PD) LIVE
Rental Rental Rental Rental (Mais Rental (Big
Diagnosys (Rosário) (Santana) Econômica) Ben)
All operation plugged
Central of indirect items purchase (Synergies) into SSC GO
LIVE
SAP Back Office
Not initiated Concluded In time Delayed 63
66. Culture
• To be the best Drug Store
Dream
Chain of the country
helping create a healthier world
• Provide health and well-being for
our suppliers
• Create Long-term partnerships with
Mission our suppliers
• To be the best working climate to
develop our talents
• To be profitable to our Shareholders
• Attitude to go beyond
• Etics in all we do
People •
•
•
Proud to belong
Focus on results
Meritocracy to recognize our
talents
66
68. Culture Roadshow
Disseminating our values all over Brazil
• Store visits with André Sá and Gabriel Guioto.
• Dimension of Brazil Pharma structure, proud to be part of the group.
• Delivery of the Culture plaque: symbol of Brazil Pharma presence in each store and guideline for
employees conduct.
• Promote high management – employee proximity: every employee can reach the Company’s top
leadership.
68
69. Annual Integration Event
• Strategic Planning 2013 – 2015
• Integration activity – creation of a Samba
association, reinforcing the pride to be part and
the feeling of group unit
• Activity to launch the Company’s standardization
process - Integrated Management System
• Main Lecture: Bernardinho – Volleyball coach.
“Transforming Sweat into Gold”.
69
70. Integration
Best Practices
• Monthly workshops with Platforms, transforming regional into national practices.
“Vendo Mais” Program
• Training and Professional Development Process in Brazil Pharma, providing all
employees the opportunity to increase knowledge and individual and collective
productivity with several training programs.
Intranet
• Creation of an interactive environment with the area documents, corporate information,
space for communication and training material. National reach and real-time opportunity
of integration between areas and regional units. Planned for 2013.
70
72. Management Team
PEOPLE DIRECTOR
GABRIEL GUIOTO
PEOPLE TRAINING
RAFAELLA ANDRADE BERENICE PUCCI
Goals of the People Team
Disseminate Brazil Pharma culture for all platforms and provide proper training in order
to be the best and larger Drug Store Chain in the country.
72
73. People BI
Brazil Pharma family...
• 16,332 collaborators
• 13,549 collaborators allocated in stores
• 60% works longer than 1 year with us
• 66% are women
• 27% aged between 21 and 25 years
• 42% are store assistants /cashier operators
• Acknowledgment of our people
• Team-development
• Efficiency increase in our operations
• Providing better opportunities to our people
• Reduced turnover costs
• Reduced operational costs
73
74. Carrer and Salary Plan
• Finished • Benefits
ￚ Job description ￚ Same remuneration methodology for all
ￚ Competency Map platforms
• On going
ￚ Job description validation at the Regional
Platforms
ￚ Salary validation of each Regional Platforms
ￚ Salary Adjustment
74
76. Performance Evaluation
Evaluate collaborator skills (know-how, abilities and behavior), according to area and
scope of activity.
Operation (all platforms) Operation/ Sales
• Evaluate leadership skills at • Sales performance evaluation
supervisor level
76
77. Executive Development Program
Identification of the Company’s • Definition of the Talents Profiles based on our culture
Talents • HR Follow-Up and Performance Evaluation as main tools
• First Class: 06/24 to 07/01, and 11/08 to 11/10
Executive Training
• Second Class: 2013
• Directed Development Program
Talent Development and Retention • Compensations and Benefits to Retain Talents (RETAIL: Intelligence,
Leadership and Talent Retention)
77
79. Management Team
DIRECTOR
PERFORMANCE MANAGEMENT
GABRIEL GUIOTO
SOUTH PLATFORM MID-EAST PLATFORM BAHIA PLATFORM NORTH/NORTEAST PLATFORM
FABIO COSTA GUILHERME FIORENZANO MAURÍCIO TISO FABIO EIRADO
RECIFE OPERATION
NATHÁLIA RODRIGUES
Goals of the Management Team:
Monitoring and controlling the pharma retail operations from Brazil Pharma group in
order to put in practice the goal of being the best and larger Drug Store Chain in the
country
79
80. Improvement and Projects
Cost reductions already implemented
Reduction of the store HC, decreasing the HC/store average from 22.6/store in 1Q11 to
20.4/store in 2Q12
Renegotiation of existing agreements and termination of older agreements
Corporate card cancellation
Reduction of expenses with transportation of employees to stores working after 10 p.m.;
Implementation of the VoIP system in all company’s land lines and review of the mobile
phone users;
Store Expenses Control (meals, phone, etc.)
80
81. Improvement and Projects
Implemented management
improvements
Weekly meetings with Regional Managers and Supervisors
Implementation of budget monitoring
Control focused on variable expenses such as Telephone Lines, Travels and Fuel
Implementation of a payment control and approval by competent areas
Implementation of a reimbursement policy for employee expenses
Control and approval of positions, transferences and raises
81
82. Improvement and Projects
Challenges and ongoing projects
Profit sharing for store Managers/Supervisor (implement monitoring of expenses under the
store control)
Help in the efficacy analysis of CD
Request a review of the chain power installations to reduce costs
Project to reduce water use in the chain
Conduction of a study to reduce delivery costs
Help to migrate from BackOffice to SSC
82
84. Professional Training and Development
Training and Partner Succession...
RODRIGO SILVEIRA Strategic Goal
PROFESSIONAL EXPERIENCE
In charge of training and transition process of
incorporators
Initiated his professional experience in 1.Identify, evaluate and promote training for the platform
Drogaria Rosário at the age of 15 as a professionals, developing the vision of “business owners”;
Underage Trainee. He worked in every
position in the store – from salesman to 2.Monitor main indexes and promote actions that ensure that
store supervisor. goals related to these indexes are reached;
He was Director of Operations & Sales in 3.Perform regular maintenance, as required.
GRD and currently works as Director of
Operations of GRD. Status:
South and North: first step ongoing
Bahia and Mid-Western: in phase of maintenance
84
85. Professional Training and Development
...Training future leaders
New identity of the “Training and
Professional Development Process in
Brazil Pharma”, providing all
employees the opportunity to
increase knowledge and individual
and collective productivity with
several training programs.
We also highlight the launch of the
BRPH Sales and Consumer Service
Method, with tips and techniques to
standardize the consumer service and
maximize results.
85
86. MUBARACK - SIG/PDCA, INDG – GMR/GMD, LT/A PONTE e SETA –
SIX SIGMA
Looking for continuos
Improvement
86
87. Operations & Sales - GRD
VOLLTA Spreadsheet:
• Store Official Visit by the Coach Lead. Tool developed in the Mid-Western based on the
use of Consulting techniques: MUBARACK- SIG/PDCA, INDG – GMR/GMD, LT/A PONTE
and SETA – SIX SIGMA.
Purpose:
• Formalize and control visits of each Supervisor to the store. Identify productivity,
technical, operational or professional attitude deviations or issues.
“A monthly Action Plan is prepared in order to revert results for each clerk with a
negative deviation in the Mid-Western.”
87
88. Operation Team
Our Operation Regional Managers:
EMILIO JOSE DE
WESLEY BARBOSA RICARDO KITAMURA FABIO COSTA
AZEVEDO
88
89. Mid-Western Platform
EMÍLIO JOSÉ DE AZEVEDO Platform Shot
PROFESSIONAL EXPERIENCE Strengths
20 years working in the area Training and Professional Development Process
completely implemented
Initiated his professional experience in Marathon – largest sales campaign in the
1992 as cashier, Salesman, manager, pharmaceutical retail
pharmacist, supervisor and regional Average Ticket
manager. Currently Manager of Leadership in the Mid-Western market
Operations in Mid-Western for Brazil Strong growth in the States of GO and MT
Pharma. Top of Mind for 2 consecutive years.
Background: Drogaria Santa Mônica Points to be developed
and Drogaria Rosário (Brazil Pharma).
Head Count by store
Launch of the new CD
Reduction of the discount
89
90. Platform South
FÁBIO COSTA Platform Shot
PROFESSIONAL EXPERIENCE
Strengths
2 years working in the area
Over 1 million of generic drugs/month
Experience as analyst, Coordinator and Capillarity in the countryside
Manager of planning, controllership, budget 204 stores, 80 cities, 2 States
and management areas Reference in the work with C and D classes
Background: Brazil Pharma, Mais Points to be developed
Econômica, Itaú, Credicard and PDG
Head Count by store
Mix adjustment
Logistics
Expansion of Covenants
Improve performance in A and B publics
Implementation of the Training and Professional
Development Process: Multiplying agents, Supervisors and
Regional Managers
90
91. Platform North/Northeast
RICARDO KITAMURA Platform Shot
PROFESSIONAL EXPERIENCE Strengths
12 years working in the area Absolute leader in the North region and largest player.
In the city of Belém, Leader for over 15 years, with
Experience in administrative and financial average preference of 70% of the population.
routines, foreign trade, costs, planning, sales and Work in the States of PA, MA, PI, PE, PB, CE and AP.
general direction.
Points to be developed
Background: several areas, such as agriculture,
metallurgy, communication, food, cosmetics and Focus in the countryside growth;
pharma retail in positions of office boy, supervisor, Expansion of the dermo-cosmetics sales and Big
manager and director. Serviços;
Integration of Guararapes Store.
91
92. Platform Northeast - Bahia
WESLEY DE PADUA BARBOSA Platform Shot
PROFESSIONAL EXPERIENCE
Strengths
12 years working in the area
70% of market share in the city of Salvador
Experience in Administrative and financial
Average public of 2 M individuals/month in 114
routines, Sales, Trade Marketing and Category
Management
stores
15 years as top of mind in Salvador
Background: AMBEV, Niasi and Colgate Palmolive Developing average ticket
in positions of salesman, supervisor, manager and
director.
Points to be developed
Team training
Store layout
New CD
Implementation of the Training and Professional
Development Process: Multiplying agents, Managers,
Supervisors and Regional Managers
92
94. Why to expand the footprint?
Categories in which Own Potential categories for
BPRPH Platforms act FARMAIS 41.052
11.172
# Stores by
Sales
category
Addressable market
•10,062 stores
Average sales • Average turn-over ~R$
of each store
R$ 140 thousand/month
thousand/mon
• Total turn-over ~R$ 1,4
th
Bi / month ~R$ 16,8 Bi
/ year
Total sales of
each category
R$ MM/year
Source: IMS internal bases, by distribution study. Data related to medications 94
95. Farmais Context
Number progression of active stores from Farmais Chain
Main leverages for Farmais Turn Around
• Unified management system - transparency regarding all the store numbers
Management • Creation of a trade area and solid training of the field consultants
• Synergy with the know-how obtained in own platforms
• Creation of a team focused in the expansion with a goal based on results
Expansion • Flexibility of fees and conditions for new stores
• Farmais benefits individually calculated in order to encourage conversion
• Ana Hickmann as advertising girl and improved marketing strategy
Brand Equity • Convention of franchise holders with motivational lecture and recognition of the best
franchise holders
95
96. Farmais Representativeness in BRPH
• FARMAIS Representativeness in the number of BRPH stores
• Farmais represents approx.
34% of the total number of
BRPH stores.
• In the current scenario,
Farmais will represent 37% up
to 2014.
• In case of expansion to
alternative areas, the
368 444 532 602
representativeness would
increase to 42%
• Turn-Over Mix – “Daily Sale” criterion
• Farmais represents approx.
18% of sales, same % that it
tends to reach in 2014 in the
current scenario.
• In case of expansion to
alternative areas, the
representativeness would
increase to 21%
96
97. Macro benefits to become Farmais
Independent Farmais
• Purchases made by one drugstore or a small • Purchases with negotiated conditions for over a
group of drugstores, obtaining smaller margins thousand stores – Larger margin
Commercial
• Product financial fees are within the market • Product financial fees are much more appealing
conditions standard
• Team expert in store management with trade
• Absence of a team professional supervision know-how to increase the store turn-over and
focused in the store and in trade techniques to brand visibility
Management leverage the turn-over • Inventory management and optimization of a
regionalized mix
• Regular training for store teams
• Ana Hickmann as advertising girl in
• Local marketing with low efficacy and no large • Seasonal campaigns with drawing of cars,
scale media power motorcycles, tablets etc
Marketing • Amateur material with high costs and low • Mass Media in the largest communication
appealing companies in Brazil
• Tabloids with price intelligence according to the
working region
• Technical team that facilitates and reduces
• Reduced or no support of specialized
Regulatory / the costs of all regulatory processes, in addition
professionals in regulatory and legal issues to alert on all possible renewals
legal
• Support in decisions in order to avoid potential
legal and accounting issues
97
98. The new look of Farmais
Creating Brand value
ANA HICKMANN
The new integrant of Farmais
98
100. Nota Importante
This document may contain forward-looking statements in relation to the Company and its subsidiaries which reflect the current outlook
and/or expectations of the Company and its management for its performance and its business and in relation to future events. These
forward-looking statements are subject to risk and uncertainty in respect of factors which cannot be controlled or precisely estimated by
the Company, such as market conditions, competitive environment, currency fluctuations and changes in the inflation rate, alterations in
regulatory and governmental bodies and other factors affecting the Company's operations. As a result, the Company's future results may
show material differences from these projections.
The reader is warned not to take any investment decision exclusively on the basis of these forward-looking statements. The forward-
looking statements do not represent and should not be interpreted as a guarantee of future performance. The Company does not
undertake to publish any revision of these forward-looking statements, or to update them in the face of events or circumstances which
may arise after the date of this document.
This document contains operational information and other proforma management information which is internal to the Company and not
derived directly from the financial statements. This information has not been specially reviewed by the Company’s independent auditors
and may involve assumptions and estimates adopted by the management. This information should not be considered as sufficient in
isolation for any investment decision and should be read in conjunction with the Company’s financial information that has been subject to
limited review or audit and which is filed with the Securities Commission (CVM).
No responsibility will be accepted by the Company and its subsidiaries, or by their board members, officers, agents, employees, advisers
or representatives, for any loss or prejudice arising from the use of the information presented or contained in this document, or for any
damage resulting, corresponding or specific thereto. Data included in this document was obtained by means of internal research, market
surveys, information in the public domain and business publications; the Company has not confirmed the reliability of this data with the
respective sources.
100
