Profarma 2Q12

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Profarma 2Q12

  1. 1. 1
  2. 2. Profarma Overview 2
  3. 3. Profarma makes herein statements about future events that are subject to risks and uncertainties. Such statements are based on the beliefs and estimations of theCompany’s Management and information to which it currently has access. Statements about future events include information regarding our present intentions,beliefs or expectations, as well as those of the members of the Company’s Board of Directors and Executive Officers’ Committee. The qualifications in relation tostatements and forward-looking information also include information regarding potential or presumed operating results, as well as statements that are preceded orfollowed by or include the words "believe", "may", "will", "continue", "expect", "forecast", "intend", "plan", "estimate" or similar expressions. The forward-lookingstatements and information are not guarantees of performance. They are subject to risks, uncertainties and beliefs because they refer to future events, thusdepending on circumstances that may or may not materialize. Future results and creation of value for shareholders may differ to a material degree from thoseexpressed or suggested by statements in relation to the future. Many of the factors that determine such results and amounts are beyond Profarma’s ability to controlor predict matters. 3
  4. 4. Period Highlights Gross Revenues Increase Net Profit Ebitda Increase Increase Growth of Arpmed Generic Acquisition Sales Prodiet Positive Revenues Cash and Ebitda Generation Margin Increase 4
  5. 5. ArpMed Acquisition 2Q12Results 5
  6. 6. ArpMedAcquisition 6
  7. 7. ArpMed | Company OverviewEstablished in 1998, ArpMed focuses on special, higher value-added pharmaceuticals by means of twocomplementary business units that provide services for industries dealing with specialties.Business Units: Sales Synergy Services and ConsultingDistinct Features:• It is possible to reduce the number of steps in the distribution process (Manufacturer–Points of Sale–Client), thus speeding it up, reducing costs and increasing margins;• Supply can be optimized through an automatic replenishment policy;• Delivery at home or doctors’ offices provides comfort and convenience for clients;• All the steps in the logistics process comply with the regulations of ANVISA [Brazilian National Health Surveillance Agency• Each unit sold is tracked;• The Company’s relationship with laboratories and nutrition industry companies provides a solid basis to increase volumes and launch new high value-added products. Management, logistics, sale and marketing solutions for special, niche high-cost cold-chain products or Rx products that need to be repositioned or require market information 7
  8. 8. ArpMed | Company OverviewThe Company:• ArpMed already serves several Brazilian and international laboratories.• It focuses on the segment of high-priced prescription medication (average ticket upwards of R$600.00).• It specializes in products that require specific procedures, and follow-up and support services.• It has a sound product portfolio, comprising fertility, ophthalmology and oncology products; breast implants; hearing aids and diabetes medicines among others.• It has a tradition in providing ancillary services for the industry and is, therefore, a solution to manage the channel as a whole and serves as a reference for laboratories.• 53% of its gross revenues come from sales with ancillary services.• New contracts are being negotiated.Suppliers:• Laboratories need a logistics partner able to offer a different system from that used for conventional products.• Even though profitable, the distribution of these products is a complex process due to the volume (low amounts: 2,000- 5,000 products for the whole country), the careful handling required by the product, the dispersal of users, and the follow-up and tracking processes involved. 8
  9. 9. ArpMed | Flow of Operations Patients Laboratories Structure Doctors and - Cold Chain Clinics - Experienced Pharmaceutical Team - Approved packaging process - Process complying with the standards in effect - Regular internal and independent audit Receipt Storage Distribution 9
  10. 10. ArpMed | Specialties and Operational highlights Specialties Operational Highlights Geographical Coverage • Plastic Surgery (breast implants) • 121,000 orders in 2011 • Average ticket upwards of R$600.00 • Dermatology • 260 sold items • Endocrinology (hormones and insuline) • About 170 employees • Gynecology • Ophthalmology Sales Sales through Own Call Center - % Sales with Ancillary Services - % • Orthopedics • Rheumatology 46% 47% 53% Others 54% W/o W/ Through Service Service Call Center 10
  11. 11. ArpMed | Drives for the Transaction • One of the leading companies in direct sale of specialty and high-cost medications Leadership • Strong presence in the Southeast Region, and competing for leadership in São Paulo and Rio de Janeiro and • Present in several states through a network of partner companies • A 24% year-over-year increase in 2011 Growth • Planned growth in existing markets Potential • New markets • Increased amount of purchases, which allows improving the relationship with manufacturers Synergy • Synergies in the administrative and operational areas • Mr. Guilherme Porto and Mr. Guilherme Rocha have each over 10 years’ experience in the Experience industry and • Both executive management and the consolidated management structure will be strengthened. 11
  12. 12. ArpMed | Acquisition ModelAcquisition of an 80% stake in Arpmed’s total capital stock. Payment SchedulePrimary Offer:• 40% paid on Execution Date• 30% paid one year after the Execution Date• 30% paid two years after the Execution DateSecondary Offer:• 50% paid on Execution Date• 50% paid 12 monthly installments from the Execution Date.Earn-out:• Payment of an additional secondary offer in the first three years, based on EBITDA and the Cash Cycle. Contingency Cover and Description of GuaranteesContingency Coverand• ArpMed’s current shareholders will be liable for all contingencies arising from taxable events prior to the Execution Date.Description of Guarantees:• Capital Stock Adjustment via Subscription Bonus, Escrow Account and Retained Payments. 12
  13. 13. ArpMed | Sinergy Gains Operational Efficiency Relationship with Manufacturers New Business New Segments Opportunities 13
  14. 14. 2Q12Results 14
  15. 15. Financial Numbers | 2Q12 Results Gross Revenues Evolution Gross Revenues Breakdown 954.5 919.5 779.4 2Q12 2Q11 Chg. % 1Q12 Chg. % Branded 517.2 512.2 1.0% 552.7 -6.4% Generic 66.3 45.7 45.0% 93.7 -29.3% OTC 132.5 141.3 -6.3% 126.3 4.9% Health and Beauty Products 67.9 53.9 26.1% 69.1 -1.8% Hospitals and Vaccines 135.6 26.3 416.7% 112.7 20.4% Total 919.5 779.4 18.0% 954.5 -3.7% 2Q11 1Q12 2Q12 (R$ million) 15
  16. 16. Financial Numbers | 2Q12 Results Gross Profit and Revenues from Services Operating Expenses - SGA to Suppliers 8.4% 12.4% 7.5% 7.5% 10.7% 10.2% 64.5 61.1 49.5 42.0 37,8 27.4 45.0 52.8 42.9 2Q11 1Q12 2Q12 2Q11 1Q12 2Q12 Gross Profit Revenues from Services to Suppliers (R$ million and % Net Revenues) Gross Profit Margin(%) 16
  17. 17. Financial Numbers | 2Q12 Results Ebitda and Ebitda Margin Net Financial Expenses 1.4% 4.1% 1.3% 0.9% 3.2% 2.5% 31.2 10.5 8.8 20.7 7.2 20.2 2Q11 1Q12 2Q12 2Q11 1Q12 2Q12 (R$ million and % Net Revenues) 17
  18. 18. Financial Numbers | 2Q12 Results Net Profit Cash Cycle 1.4% 1.2% 1.6% 2Q11 1Q12 2Q12 12.4 9.5 9.5 Cash Cycle - Days * 60.4 54.6 59.1 Accounts Receivable (1) 39.4 50.7 47.4 Inventories (2) 53.1 49.7 48.9 Accounts Payable (3) 32.0 45.8 37.1 * Average (1) Average of Gross Revenues in the Quarter (2) Average of COGS in the Quarter 2Q11 1Q12 2Q12 (3) Average of COGS in the Quarter (R$ million and % Net Revenues) 18
  19. 19. Financial Numbers | 2Q12 Results Summary of Cash Flow 2Q12 2Q11 Chg. % 1Q12 Chg. % Cash Flow Generated / (Used) in Operating Activities 18.2 50.0 -63.6% (72.2) - Internal Cash Generation 30.5 19.8 53.7% 20.0 52.0% Operating Assets Variation (12.3) 30.2 - (92.3) 86.7% Trade Accounts Receivable 52.7 37.3 41.3% (64.5) - Inventories 34.2 46.3 -26.0% (13.0) - Suppliers (93.5) (48.7) -91.9% (11.1) -741.3% Other Items (5.7) (4.6) -23.2% (3.7) -53.7% Cash Flow (Used) in Investing Activities (2.7) (1.8) -51.1% (1.7) -63.4% Cash Flow Generated / (Used) by Financing Activities (4.2) (51.0) 91.8% 61.6 - Net Increase / (Decrease) in Cash 11.3 (2.8) - (12.3) - (R$ Million) 19
  20. 20. Financial Numbers | 2Q12 Results Indebtedness: Net Debt and Net Debt / Ebitda Capex 0.4% 0.3% 0.2% 2.3x 2.2x 2.1x 202.0 197.2 2.9 157.1 1.9 1.7 2Q11 1Q12 2Q12 2Q11 1Q12 2Q12 (R$ million and % Net Revenues) 20
  21. 21. Financial Numbers | 2Q12 Results Shares - Comparative Performance Stock Performance 104 Ibovespa (1) IGC (1) 100 92 Share Price R$ 9.71 64,511 7,613 84 03/30/12Preço da Ação R$ 10.10 54,355 6,992 06/29/12 Chg. (%) 4.0% -15.7% -8.2%Note (1): Comparative evolution in Index base points Turnover (R$) PFRM 3 PFRM3 IBOV IGCX 21
  22. 22. 2Q12 Results | Analyst Coverage Company Analyst Telephone E-mail Morgan Stanley Javier Martinez Cerdan (1 212) 761-4542 javier.martinez.olcoz@morganstanley.com Merrill Lynch Mauricio Fernandes (55 11) 2188-4236 mauricio.fernandes@baml.com Credit Suisse Marcel Moraes (55 11) 3841-6302 marcel.moraes@credit-suisse.com Itaú BBA Juliana Rozenbaum (55 11) 3073-3040 juliana.rozenbaum@itausecurities.com Banco Fator Iago Whately (55 11) 3049-9480 iwhately@bancofator.com.br Raymond James Guilherme Assis (55 11) 3513-8706 guilherme.assis@raymondjames.com BTG Pactual João Carlos dos Santos (55 11) 3383-2384 joaocarlos.santos@btgpactual.com Andre Parize (55 11) 5171-5870 andre.parize@votorantimcorretora.com.br Votorantim Marco Richieri (55 11) 5171-5873 marco.richieri@votorantimcorretora.com.br 22
  23. 23. Max Fischer | CFO and IRO Beatriz Diez | IR Manager www.profarma.com.br/ir Telephone.: 55 (21) 4009-0276 E-mail: ri@profarma.com.brMarket Ticker independentMaker: BM&FBOVESPA: Auditors: 23
  24. 24. IR Contacts Max Fischer | CFO and IRO Beatriz Diez | IR Manager 24Phone.: 55 (21) 4009-0276 | E-mail: ri@profarma.com.br | www.profarma.com.br/ri

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