5. Big Ben - Our new acquisition
Total acquisition amount of R$453,644,000.00(1)
• R$178.6 million in Brazil Pharma shares, issued at a price of R$15 per share;
• R$100.9 million in cash; and
• R$174.1 million in 3 annual installments, adjusted by IGP-M (General Market Price Index).
Indemnity and Sureties
• Last installment in cash and equity interest in Brazil Pharma will be secured by indemnities as contractually agreed.
Corporate Governance
• Raul Aguilera remains as Big Ben’s CEO with 3-year renewable management contract; and
• 3-year lock-up for issued shares.
(1) Includes transaction fees.
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6. Big Ben Overview
Besides being the leader in Brazil’s northern region, Big Ben presents high levels of sales per store with
a solid growth towards the northeast region over the past years
Sales Breakdown
2010
Founded in 1994, with head offices in the state of
Pará;
CEO and Founder : Raul Aguilera; Branded
Brazil’s 8th largest drugstore chain; 42%
50% Generics
Largest drugstore chain in Brazil’s northern region, 68%
top of mind in the state of Pará, according to “Diário do
Pará”; Non-medicines
146 stores in the states of Pará, Maranhão, Amapá, Piauí, 8%
(1)
Pernambuco and Paraíba;
50 stores in the northeast region;
24% of stores are under maturation; Stores per State
Sales per store of approximately R$500 thousand/month;
(2) October 31 , 2011
Sales in 2010: R$712.4 million; and Pará 95 stores
EBITDA in 2010 : R$40.2 million.
Amapá 1 store
Maranhão 20 stores
Piauí 14 stores
Pernambuco 14 stores
Paraíba 2 stores
(1) As of October 31, 2011
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(2) Average sales per store recorded in 2011
7. Brazil Pharma Post Acquisition
Ownership structure post acquisition.
Aguilera BTG Operating
FIPs1 Market
Family Pactual Partners
12.98% 30.33% 11.83% 20.41% 24.45%
100.0% 100.0% 100.0% 100.0% 100.0%
Rosário Mais
Big Ben Farmais Guararapes
Distrital Econômica
(1) Assets managed by Banco BTG Pactual.
7
8. Sponsorship from Active and Experienced Shareholders and Management
Experienced management with more than 25 years in the pharmacy retail industry on average
# Years # Years
Management Experience
Pharmacy Retail Financial Industry
André Sá
2 12
CEO
Marcelo Doubek 2 14
CFO
Renato Lobo
Investor Relations
n/a 18 Highly active and
performance-oriented
Álvaro Silveira Jr. 22 shareholders, with high
n/a
Head of Midwest and Commercial Director ambitions in the sector
Wilson José Lopes 25 n/a
Head of South Operations
Gilberto Portela
Head of Northeast Operations
30 n/a Solid and rich expertise
Ernandes Cunha 11 acquired from previous
n/a
Farmais Director endeavors
Raul Aguilera
25 n/a
Head of North Operations
Flavio Sanchez
Project Manager
n/a 4 years as Project Manager at
Coca Cola and 12 years at Ambev
Unique successful story in
Andre Buric 6 years as Product Manager at playing the consolidation
n/a
Product Manager Johnson & Johnson trend in the Real Estate
Board of Directors industry: PDG Realty
Marcelo Kalim n/a 15
Board Member
Carlos Fonseca
Board Member
n/a 14
Álvaro Silveira Partnership with TAM: the
36 n/a merchant banking division
Board Member
of BTG Pactual
Roberto Martins successfully created value
20 22 for TAM through (i)
Board Member
Multiplus IPO and (ii)
José Luiz Depiere merger with LAN
14 n/a
Board Member
Artur Grynbaum
25 n/a
Independent Board Member 8
10. Brazil Pharma: Strategies to Create Value
Market Organic Growth
Consolidation Opening of new stores to Unparalleled 60
Highly fragmented consolidate local Growth
market with large room leadership and enter new (# of stores 34
for consolidation states 9M11) 21
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 September 30th, 2011
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11. Brazil Pharma at a Glance
Largest Pharmacy Retail Company in Brazil: Ready for further consolidation
Our Platform² Number of Proprietary Stores¹
872 points of sale 377
25
498 own stores e 364 franchise stores 60
71
1st
+ 2nd
71 352
230 own stores 292
52
221
150
98
2007 2008 2009 2010 9M11
Distribution of the Stores by Stage¹ 3Q11 Medicine Sales Mix (%)¹
(Existing stores on September 30, 2011)
Brazil Pharma Abrafarma
1st
101 own stores 87
129 25%
36% 31,1% 29,9%
47,3%
364 franchise stores
73 60,1%
Proprietary Stores 21% 10,0%
63 21,6%
Franchise Stores 18%
Distribuition Center
177 own stores
2nd
Stores with less than 12 months Non-Medicines
¹Excluded Big Ben and Estrela Galdino’s Stores
²GRD, Farmais, Mais Econômica and Guararapes’ stores as of September 30, 2011; Big Stores with 12 to 24 months Branded
Ben’s stores as of November 03, 2011 and Estrela Galdino’s stores as of November Stores with 24 to 36 months
28, 2011
Generics
Stores with more than 36 months (mature) 11
12. Pharmacy Retail: ... With Consolidation Opportunity
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
Raia + Brazil
Breakdown per S. Paulo +
State Drogasil Pharma
Pacheco
São Paulo 31%
South
Rio de Janeiro 14% East
Region
Minas Gerais 10%
Rio Grande do Sul 8%
Paraná 6%
Goiás + DF 5% Other
Brazil Pharma Focus
Regions
Bahia 4% Players Focus
Santa Catarina 4%
Revenues Growth (R$000) Store Growth
Pernambuco 3% 2010 2009 2008 2010 2009 2008
Droga Raia 1.860 1.594 1.147 350 299 259
Ceará 3% grow th % 16,7% 39,0% 17,1% 15,4%
Drogasil 2.089 1.788 1.326 338 283 256
Pará 2% grow th % 16,8% 34,8% 19,4% 10,5%
São Paulo 2.214 1.706 1.412 342 249 214
Others 11% grow th % 29,8% 20,8% 37,3% 16,4%
Pacheco 1.843 1.621 1.248 340 370 280
grow th % 13,7% 29,9% -8,1% 32,1%
Pague Menos 2.235 1.855 1.551 400 333 301
grow th % 20,5% 19,6% 20,1% 10,6%
Brazil Pharma 921 660 470 292 221 150
Source: IMS Health, Companies web site, Brazil Pharma grow th % 39,5% 40,4% 32,1% 47,3%
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18. Sales Mix and Average Ticket
Increase in average ticket even with the growing relevance of generics in our sales mix
Sales Mix Average Ticket
(% of sales) (R$)
30,70
19,6% 20,5% 21,8% 20,4% 21,6% 21,3% 21,6%
29,47
28,31
28,05
27,69 27,74
47,0% 47,7% 46,1%
47,1% 46,7% 48,0% 47,3%
26,89
33,5% 31,7% 31,1% 33,5% 31,6% 30,7% 31,1%
1Q10 2Q10 3Q10 4Q10 1Q11 2Q11 3Q11 1Q10 2Q10 3Q10 4Q10 1Q11 2Q11 3Q11
Non medicines Branded Generic
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19. 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)
28,8%
27,8% 26,6%
102,1
34,3% 26,1% 26,1%
33,5% 25,2% 81,0
32,9% 24,4% 79,0
31,1%
30,4% 29,9%
29,8%
94,1
67,7 66,7
60,8
55,3
50,2
78,9
77,6
74,3
66,7
59,8
1Q10 2Q10 3Q10 4Q10 1Q11 2Q11 3Q11
SG&A % of gross revenue
1Q10 2Q10 3Q10 4Q10 1Q11 2Q11 3Q11 (1) Includes other net operating revenues. Data adjusted to exclude non-recurring expenses occurred during
the quarters. On the 3T11 non recurring expenses were R$5.9million, being R$4.3 million related to
Gross Profit Gross Margin severance paid, in view of the headcount cut in the South platform and R$1.6 million expenses related to the
stock option plan.
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20. EBITDA and Depreciation and Amortization
Highest EBITDA margin since the creation of Brazil Pharma
EBITDA and EBITDA Margin Depreciation and Amortization Expenses
(R$ million, % of gross revenue) 6,9% (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%
21,1 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.
Out of the R$6.8 million depreciation and amortization expenses booked in
3Q11, R$3.9 million represented the amortization of intangible assets
(commercial establishments).
15,2
13,4
6,7
12,2
11,4
9,9
9,6 5,0 4,9
0,7 0,8 0,8 0,8
1Q10 2Q10 3Q10 4Q10 1Q11 2Q11 3Q11 1Q10 2Q10 3Q10 4Q10 1Q11 2Q11 3Q11
EBITDA EBITDA Margin
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21. Financial Result and Net Income
Lower financial expenses given Company’s capitalization and maintenance of profitability
Financial Result Net Income and Net Margin1
(R$ million) (R$ million, % of gross revenue)
6,2%
4,1 4,9%
18,9
2,8%
2,4% 2,5% 2,4%
2,2%
1,5% 1,7%
3,9
0,8%
15,0
7,8
1Q10 2Q10 3Q10 4Q10 1Q11 2Q11 3Q11
6,1
5,4 5,2 3,0
4,6
4,0
3,2 4,7
(1,8)
2,0
(2,4)
(2,9) 1Q10 2Q10 3Q10 4Q10 1Q11 2Q11 3Q11
(3,4)
Adjusted for key money amortization Net Income
(4,4) Net Margin Adjusted Net Margin
(4,6)
(1) Net income before minority interest and adjusted to exclude non-recurring expenses in the period.
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22. 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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