Btg pactual xiv ceo conference 2013 presentation

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Btg pactual xiv ceo conference 2013 presentation

  1. 1. Brazil PharmaBTG Pactual XIV CEO ConferenceInstitutional PresentationFebruary 6, 2013André SáCEO
  2. 2. CompanyOverviewSantana store. Salvador, BAThe Opportunity
  3. 3. 37,00 8,30 9,40 10,30 11,20 11,60 13,1014,8017,3019,2021,5023,6026,4030,2036,2042,9049,601996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012Source: IMS Health.Drivers Micro MomentumRegionalBrandsFragmentedMarketSectorFormalizationDrivers MacroIncomeGrowthPopulationAgingGenericMedicinesCAGR ‘08-12Medicine: 13.5%Generics: 24.9%Branded: 11.1%Sales performance in the Brazilian pharmaceutical market from 1996-2011 (R$ Billion)Industry PerformanceA Growth and Accelerating History
  4. 4. 4Source: BofAML Global Research, ANSMarket DriversHealthcare Plan Penetration32 34 35 37 39 41 43 45 47 50 52 54 56 58 59 60 60 6018%23%27% 28%2003200420052006200720082009201020112012e2013e2014e2015e2016e2017e2018e2019e2020eHealthcare Plan Beneficiaries Penetration to total population (RHS)35% 42% 50% 60% 66% 67% 69% 70% 72% 72% 73%18%21%23%24%25% 24% 24% 23% 22% 22% 21%47% 37% 27%16% 10% 8% 7% 7% 6% 6% 6%20002001200220032004200520062007200820092010Group plans Individual Plans Not InformedHealthcare plan beneficiaries are increasing at a 5% CAGR (2003 - 2013)($ million)Corporate plans already represent 73% share Decrease in unemployment drives the increase in group plans($ million)16 19 22 24 25 27 29 31 3212,9% 12,4%11,5%9,9% 10,0%9,3% 7,9% 8,1% 6,7%2002 2003 2004 2005 2006 2007 2008 2009 2010Number of group plans beneficiaries (lHS)Unemployment (RHS)
  5. 5. 5100 127 197294407618969Health care spending per age group (100 basis)27% 55%49%38%52%57%Source: BofAML Global ResearchThe Brazilian population older than 60, the segment with the highest medication expenditure, is expected to increasefrom 10% of the population in 2010 to 20% by 2030Market DriversBrazil median age to match European countries by 2030-20% -10% 0% 10% 20%0 - 910 - 1920 - 2930 - 3940 - 4950 - 5960 - 6970 - 7980+Europe 2010 Brazil 2030-20% -10% 0% 10% 20%0 - 910 - 1920 - 2930 - 3940 - 4950 - 5960 - 6970 - 7980+Europe 2010 Brazil 2010People over 65 years old spend more than 55% of total expenditures23%16%17%13%8%8%7%5%29%19%19%16%12%9%10%6%Japan Europe U.K. U.S. China Global Brazil India2010 2020Percentage of population with more than 65 years to total population
  6. 6. 6Note:1. Total brand market sales estimates represent annualized sales; includes all expected generic launches in total brand numbers with key launches highlighted; assumes 6months pediatric extension on all launches; forward looking information assumes no “at risk” launches ; 2. The timing of generic introductions and number of supplierscan be impacted by a variety of factors, including legal challenges, regulatory issues and manufacturing capacity.Sources: IMS Health; CVS research estimates.Market DriversGenerics continue to represent a significant opportunity in the coming years20,435,511,216,813,32011 2012E 2013E 2014E 2015ETotal Brand Market Sales ( $ Bn)LipitorZyprexaLevaquinConcertaTaxoterePlavixSingulairSeroquelLexaproActosDiovanHCTEloxatinGeodonTricorProvigilCymbaltaDiovanNiaspanNexiumCopaxoneCelebrexAbilifyNamendaLovazaAndrogel$ 97 Bnin patentsoverdue
  7. 7. 7Source: Itaú BBA Research.Great opportunity for consolidationIndependents losing market-share for large drugstore chainsMarket share by channel – number of stores, 2011 (%)Top 5 retail chains market shareMedicine revenues, pharmaceutical market (%)Market DriversFragmented market. Opportunity to capture share of independent chains62.0% 59.9% 55.1% 51.5% 49.1% 48.3% 47.9%16.1% 17.0%20.1% 22.6% 22.2% 22.7% 17.4%5.5% 6.3% 6.5% 6.2% 6.5% 6.4%5.5%16.4% 16.8% 18.3% 19.7% 22.2% 22.6% 29.2%2005 2006 2007 2008 2009 2010 201192.3% 91.7% 91.2% 90.8% 90.6% 89.3% 88.0%5.1% 5.5% 5.8% 6.0% 6.0%6.8%6.6%0.7% 0.8% 0.9% 1.0% 1.0% 1.2%0.9%1.9% 2.0% 2.1% 2.2% 2.4% 2.7% 4.5%2005 2006 2007 2008 2009 2010 201129.2% 34.0%66.0%78.0%70.8% 66.0%34.0%22.0%Brazil Mexico USA ChileTop 5 OthersBrazilian market is still veryfragmentedMarket Share by channel – Income, 2011 (%)Abrafarma Top 6 to10Abrafarma Top 5IndependentsSupermarkets / Other chains
  8. 8. SectorOverviewRosário store. Brasília, DFThe Power of One
  9. 9. 9DreamMissionPeople• To be the best Drugstore Chainin the country helping tocreate a healthier world• Provide health and well-being to ourcustomers• Create Long-term partnerships withour suppliers• To have the best working climate todevelop our talents• To be profitable to our Shareholders• Attitude to go beyond• Etics in all we do• Proud to belong• Focus on results• Meritocracy to recognize ourtalentsOne Company, One Culture
  10. 10. 10CLIENTSINVESTORSSUPPLIERSTALENTSTo be the number one to our public is one of the main strategic business guidelines of the CompanyThe Power of One1
  11. 11. 11Source: Brazil Pharma; Note: (1) Ranking by number of owned stores as of December 31, 2012 considering the four largest Drugstore chains in Brazil; (2) n/a: Other chains do not haveoperations in the regionDrugstore ranking per RegionNumber of Stores14th2nd1stNortheastn/a(2)3rdNorthn/a(2)n/a(2)Southeastn/a(2)Mid-westn/a(2)Southn/a(2)Strong Local KnowledgeNumber one in four out of five regions
  12. 12. 12North 109Northeast 244Midwest 121SoutheastSouth 207REGIONSOwned stores101108 2015211119877511619237 Owned stores116 Owned stores121 Owned stores369 Franchises207 Owned stores05 Distribution centersFootprint 1,050 stores8986Brazil Pharma footprint and clustersSource: Brazil PharmaNational FootprintThe number one drugstore chain outside of the Southeast2
  13. 13. 1310.0%12.4%8.6%16.2%13.8% 15.1%1Q11 2Q11 3Q11 1Q12 2Q12 3Q12Number one in organic growthOrganic Growth (# owned stores)Brazil Pharma AbrafarmaBranded GenericsHPCNumber one in sales mix(3Q12)Number one in regional growth(CAGR07’-11’)Strong growth potentialNumber one in growthSource: Brazil Pharma and IMS Health.64.9%28.5%11.7%37.1%45.9%17.0%Number one in Same Store Sales(3Q12)3339095109 54 6812009 3Q12Openings2011Openings9M12Openings2010Openings20091111
  14. 14. Big Ben store, Belém, PAPerformanceSince IPO
  15. 15. 15Footprint at and 12 months later the IPO663 Points of sale302 Owned Stores361 FranchisesPlatform @ IPO Actual Platform207 Owned stores369 Franchises237 Owned stores121 Owned stores116 Owned stores1,050 Points of sale681 Owned stores369 Franchises89 Owned stores60 Owned stores153 Owned stores361 Franchises(1) Sant’Ana’s Distribution Center caught fire on December 2011. A new distribution center was inaugurated on November, 2012 ; (2) Includes 11 stores acquired from EstrelaGaldino on April , 2012 and added to Sant’Ana’s store count in June 30, 2012.Therefore they generated no revenues in 9M12.1(1Q11) (3Q12)Distribution CenterOwned storesFranchisesIncreasing Footprint Since IPOStrong delivery since the IPO…
  16. 16. 16Increasing operational efficiency and stores productivitySource : Brazil Pharma ; Notes: (1) Considers total stores and distribution centers employees ; (2) Considers total employees (store, distribution centers and administrative).3.7 7.422.6 19.7BRPH @ IPO (1Q11)34,4 51.3BRPH 3Q121.5 3.8-13%+100%+153%+49%Store EBITDA / employee1(R$ thousand)# of store employeesper storeSales per store / employee(R$ thousand)EBITDA / employee2(R$ thousand)Operational Performance Since IPO...not only in growth, but also on the performance3.8 3.6 -5%# of administrative + distributioncenter employees per storeStores PerformanceAdministrative Performance
  17. 17. Renato LoboInvestor Relations DirectorOtavio LyraInvestor Relations ManagerMarina SousaInvestor Relations CoordinatorPhone: +55 (11) 2117- 5299E-mail: ri@brph.com.brIR Website: ww.brph.com.brIR CONTACTCentro de Serviços Compartilhados - CSC, Brasília, DF

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