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4Q16 Presentation

The document summarizes Profarma's capital allocation strategy and performance in 2016. In 2016, Profarma achieved gross revenues of R$5.5 billion, up 12.5% year-over-year. EBITDA was R$144.6 million with a margin of 2.6%. Acquisitions of Rosário and remaining stakes in other companies contributed to growth. The company's diversified business model across pharmaceutical distribution, retail drugstores, and specialty products enhances competitiveness and synergies.

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2016 Results
2016 | Capital Allocation Strategy
3 In 2011, having completed the wholesale expansion to a national coverage, the strategic decision was to diversify in search of higher returns for the company. Profarma 2016 | Capital Allocation Strategy 2011 Acquisition 60% Prodiet 2012 Acquisition 80% ArpMed Acquisition 40% Prodiet (remaining) Acquisition 50% Tamoio Acquisition 100% Drogasmil/ Farmalife 2013 2014 Acquisition 20% ArpMed (remaining) Joint Venture AmerisourceBergen 2015 Acquisition 50% Tamoio (remaining) Acquisition 100% Íntegra 2016 Acquisition 100% Rosário
625 631 662 776 578 571 709 41 68 101 53 68 96 156 272 389 571 625 672 730 1,032 903 1,028 1,376 2010 2011 2012 2013 2014 2015 2016 10.8% 10.9% 10.9% 12.2% 13.4% 14.0% 14.3% Profarma | Histórico Alocação de Capital Profarma 2016 | Capital Allocation Strategy Invested Capital Evolution – Profarma Group (R$ million) Pharma: 10.6% - last 5 years average. Specialties: 12.6% - last 5 years average for a adjusted EBITDA margin of 3.2%. Retail: 19.2% - top 3 players average. Consolidated: Weighted average potential ROIC, considering each division’s potential ROIC. 4 Invested Capital: Equity + Net Debt ROIC: NOPAT /Invested Capital Potential ROIC Pharma Consolidated potential ROICSpecialties Retail
Profarma Drogasmil | Turnaround 5 Monthly Average Sales per Store # of stores and R$ thousands 84 74 67 67 63 60 62 64 64 67 67 68 67 67 68 67 165 262 314 329 324 346 365 385 375 375 385 401 411 442 418 456 1Q13 2Q13 3Q13 4Q13 1Q14 2Q14 3Q14 4Q14 1Q15 2Q15 3Q15 4Q15 1Q16 2Q16 3Q16 4Q16 # of stores Monthly average sale
• Niche brands • More competitive market • Long period with no supply • Renewal of 70% of stores from the original platform • Complete brand renewal • Hiring of 400 employees in 3 months • Replacement of 100% of the technological platform • Directors and managers team build up on going Profarma Case Drogasmil versus Rosário • Leading brand • Less competitive market • Short period with no supply • Stores in good condition • Brand update (implemented in May/17) • Staff complete • Migration from SAP legacy to SAP d1000 • Complete management team 6
54.0 29.6 24.8 28.3 31.8 38.1 Dec-15 Aug-16 Sep-16 Oct-16 Nov-16 Dec-16 Profarma Rosário Integration Evolution Gross Revenues Evolution - Rosário (R$ million) * * Acquisition of Rosário by Profarma in 09/22/16 Potential of 59.0 Considering the average price increase of 10.5% occurred in March 2016(1) (1) 7 +54%
?? Fonte: Companies estimations # of stores (2015) Combined Operation Brazil’s main competitors Note (1): Considering 100% of Rede Tamoio, CSB Brasil (“Drogasmil” and “Farmalife”) and Rosário. Em R$ billion (2015) Brazil’s main competitors + Profarma d1000 | Overview of the Combined Retail Operation • Regions with different competitive environments assuring a more balanced gross margin. • 2nd largest in number of stores considering the regions where it acts. o Midwest leader o 2nd in Rio de Janeiro • 6th largest in number of stores in Brazil. • Brand portfolio with complementary positioning. • Platform that allows accelerated organic expansion. • Scale + 9.0 7.0 4.8 2.6 1.6 1.5 1.4 1.4 1.1 0.6 0.4 1º 2º 3º 4º 5º 6º 8º 9º 10º 11º7º 1,235 1,079 828 381 347 279 254 248 240 150 125 1º 2º 3º 4º 5º 7º 8º 9º 10º 11º6º 8
Profarma’s Model Benefits
42.0 38.7 58.2 77.6 89.1 Aug-16 Sep-16 Oct-16 Nov-16 Dec-16 Integrated logistic structure enables a promptly accelerated inventory recovery in various regions. Benefícios do Modelo Misto Supply agility 47% 56% 65% 80% 82% Service Level (R$ million) Inventories Profarma Profarma’s Model Benefits to the Retail Division Lower working capital 3Q16 (Days) Accounts Receivable 19.0 52.9 47.9 24.0 21.8 88.4 60.3 50.0 25.0 96.0 65.0 56.0Cash Cycle Accounts Payable Inventories Optimized working capital and a cash cycle 30 days shorter than the average of other retail players. * * 10 +130% Player A Player B Acquisition of Rosário by Profarma in 09/22/16 Source: Companies website Normalized estimate d1000 varejo farma cash cycle * *
Combined purchsing power between retail and wholesale assures more competitive prices Benefícios do Modelo Misto Profarma Profarma’s Model Benefits Average top 3 retail players 11 Variation % CATEGORY A -2% RJSP R$ 93 Example: Retail RJ 100 Basis Variation % CATEGORY B -17% RJ R$ 91 RJSP R$ 42 RJ R$ 35 More competitive prices when buying inside the state directly from the wholesale Relevance to Suppliers| 2016 (R$ billion) Tax Optimization + Source: Companies website 5.5 5.6
Benefícios do Modelo Misto Drugstore market – Sales evolution Profarma Profarma’s Model Benefits G&A Sinergies • Distribution center shared with wholesale clients – 35 thousand clients supplied nationally. • Shared Services Center: legal, fiscal, internal audit and human resources. • Better production balancing – optimization of the distribution center as the production of d1000’s volume occurs in its idleness time. 12 Source: Close Up | Abafarma: Associação Brasileira do Atacado Farmacêutico Wholesalers with lower dependence on big chains and market share growth with higher rates. (R$ billion) VAR ANO ANT. % 13.3% 11.7% 15.6% 13.0% 1.0% 14.3% 5.3%0.8% 1.5% 3.0% 4.3% 11.7% 25.6% 53.1% 57,4 0.9% 1.5% 3.3% 4.3% 11.4% 25.8% 52.9% 50.7 3.5% 26.2% 52.1% 64.7 11.2% MAT Jan/17MAT Jan/15 MAT Jan/16 Big Chains Independent Associations Small Chains Medium Chains Delivery Partner Pharmacies 1.0% 1.6%4.3% VAR ANO ANT. %
2016 Results
Destaques | Abertura por Divisão Specialties(*) 2015 2016 766.7 84.3 66.4 16.0 967.9 101.6 77.3 17.3 Retail(**) 2015 2016 748.7 222.3 200.6 13.4 839.4 253.9 230.2 18.7 Consolidated(*)(**) 2015 2016 4,913.5 649.4 524.8 114.7 5,529.7 726.9 582.1 144.6 Pharmaceutical Distribution 2015 2016 3,739.3 342.9 257.8 84.4 4,201.1 371.4 274.4 108.7 Gross Revenues Gross Profit SG&A Ebitda (*) pro forma figures: 100% of Specialties in 2015 and 2016. (**) pro forma figures: 100% of Tamoio in 2015. Profarma Highlights | Breakdown by Division 14
Consolidated Performance
3,398 3,722 749 839 767 968 4,914 5,530 Consolidado | Receita Bruta 12.5% pro forma (R$ million) Specialties Pharma Distribution Sales increased by 12.4% year-over-year. Sales increased by 26.2% year-over-year. Sales increased by 12.1% year-over-year. Retail 2015 2016 Profarma Consolidated | Gross Revenues 16 Pharma Distribution Retail Specialties
2.3% 3.0% 2015 20162015 2016 Consolidado | Ebitda e Margem Ebitda Ajustada 85 109 -4 19 -1 -3 80 124 85 109 13 19 16 17 115 145 3.0% 2.7% Profarma Consolidated | EBITDA and EBITDA Margin 17 Pharma Distribution Retail Specialties Consolidated IFRS (R$ million and % Net Revenues) pro forma (R$ million and % Net Revenues)
Consolidado | Ebitda e Margem Ebitda Ajustada Profarma Consolidated | EBITDA and EBITDA Margin 18 Pharma Distribution 2015 2016Equity Income Specialties Rosário d1000 Consolidated IFRS Ebitda Bridge per Division 2016 vs 2015 (R$ million) pro forma 2015 2016 24.3 -6.3 29.0 -3.0 79.6 123.9 24.3 -6.3 10.7 1.3 114.6 144.6 Pharma Distribution SpecialtiesRosário d1000
Consolidado | Lucro Líquido 2016 2015 2016 X C (11.6) (14.5) (0.5) X C X C X C (9.1) (21.2) (49.0) (8.3) 2015 2016 (54.5) -0.6% -1.2% -0.3% -0.2% -1.1% -0.2% -0.3% 0.0% Profarma Consolidated | Net Income 19 Net Income Adjusted Net Income pro forma Net Income pro forma Adjusted Net Income pro forma (R$ million and % Net Revenues)Consolidated IFRS (R$ million and % Net Revenues)
Consolidado | Lucro Líquido Profarma Consolidated | Net Income 20 2015 Adjusted Net Income Bridge per Division 2016 vs 2015 (R$ million) pro forma Financial Expenses Tamoio’s Balance 2016d1000 Others Pharma Distribution Rosário Equity Income Specialties Non-recurring expenses 2015 Financial Expenses Tamoio’s Balance 2016d1000 Others Pharma Distribution Rosário Specialties Non-recurring expenses Consolidated IFRS 3.1 24.9 -9.9 -3.0 -14.5 0.2-9.1 -21.2 -48.9 -8.3 3.1 16.0 -9.9 -6.0 -14.5 0.2 -0.5 -14.5 -54.5 -11.6
Capex 2016OtherIT Machinery and Equipment 32.28.4 4.3 19.5 4Q15 4Q16 415.2 236.6 3.0x 3.3x 4Q16 w/o Rosário 353.2 2.7x Profarma Consolidated | Capex and Indebtedness 21 Net Debt and Net Debt / EBITDA (R$ million)Capex (R$ million)
Attachments
3,398 3,722 749 839 767 968 861 911 906 925 980 198 196 205 198 241 224 231 246 241 249 4,914 5,530 1,279 1,338 1,357 1,364 1,470 3,673 3,862 308 839 919 930 945 965 1,022 82 196 205 198 241 3,981 4,701 1,001 1,126 1,150 1,163 1,263 Consolidado | Receita Bruta 4Q15 2Q16 3Q161Q16 4Q162015 2016 4Q15 2Q16 3Q161Q16 4Q162015 2016 18.1% 26.1% 12.5% 14.9% Profarma Consolidated | Gross Revenues 23 Consolidated IFRS (R$ million and % Net Revenues) pro forma (R$ million and % Net Revenues) Pharma Distribution Retail Specialties
343 371 94 254 82 75 114 94 88 24 58 63 60 72 437 625 106 133 178 154 160 343 371 222 254 84 102 82 75 114 94 88 56 58 63 60 72 24 24 31 24 23 649 727 162 158 208 178 183 Consolidado | Lucro Bruto 4Q15 2Q16 3Q161Q16 4Q162015 2016 12.6% 15.3% 12.2% 13.6% 17.8% 15.2% 14.6% 4Q15 2Q16 3Q161Q16 4Q162015 2016 15.0%15.0% 14.4% 13.5% 17.6% 14.9% 14.3% Profarma Consolidated | Gross Profit 24 Consolidated IFRS (R$ million and % Net Revenues) Pharma Distribution Retail Specialties pro forma (R$ million and % Net Revenues)
258 274 100 230 67 60 66 69 79 26 52 53 51 74358 505 93 112 120 120 153 258 274 201 230 66 77 67 60 66 69 79 52 52 53 51 74 18 18 20 20 19525 582 138 130 140 140 172 Consolidado | Despesas Operacionais SGA 4Q15 2Q16 3Q161Q16 4Q162015 2016 4Q15 2Q16 3Q161Q16 4Q162015 2016 12.4% 10.3% 10.8% 11.5% 12.0% 11.8% 14.0% 12.0%12.1% 12.3% 11.1% 11.8% 11.7% 13.4% Profarma Consolidated | Operating Expenses - SGA 25 Consolidated IFRS (R$ million and % Net Revenues) Pharma Distribution Retail Specialties pro forma (R$ million and % Net Revenues)
85 109 13 19 16 17 20 18 45 30 16 2 4 10 7 -2 5 4 5 2 6 115 145 28 26 60 39 20 85 109 -4 19 -1 -3 20 18 45 30 16 -1 4 10 7 -2 0 -1 -1 -2 0 80 124 18 21 54 35 14 pro forma (R$ million and % Net Revenues) Consolidado | Ebitda e Margem Ebitda Ajustada 4Q15 2Q16 3Q161Q16 4Q162015 2016 4Q15 2Q16 3Q161Q16 4Q162015 2016 Pharma Distribution Retail Specialties 2.3% 2.1% 2.1% 5.4% 3.5% 1.3% 3.0% 3.0% 2.5% 2.2% 5.1% 3.3% 1.6% 2.7% Profarma Consolidated | EBITDA and EBITDA Margin 26 Consolidated IFRS (R$ million and % Net Revenues)
Consolidado | Lucro Líquido Net Income Adjusted Net Income 4Q163Q16 2Q16 4Q15 1Q16 pro forma Net Income pro forma Adjusted Net Income 2016 2015 2016 8.5 (6.2) (9.3) (9.5) (18.8) 16.0 (7.3) (4.4) 0.8% 0.1% -1.8% 1.6% -0.5% -0.9% -3.5% -0.6% -0.8% 1.3% 0.0% -1.5% -0.6%-0.3% 0.6% -1.0% -3.1% -0.6% -0.9% (11.6) (39.6) (6.8) (18.9)(14.5) (0.5) 7.5 15.0 4T16 pro forma (R$ million and % Net Revenues) (9.1) (21.2) 1.0 (38.6) Consolidated IFRS (R$ million and % Net Revenues) (49.0) (8.3) 4Q163Q16 2Q16 4Q15 1Q162015 2016 (54.5) (3.9) -0.6% -1.2% -0.3% -0.2% -1.1% -0.2% -0.3% 0.0% (12.2) (0.1) (10.2) (6.9) Profarma Consolidated | Net Income 27 -0.9% X C X C
Capex 2016 OtherIT Machinery and Equipment 32.28.4 4.3 19.5 Profarma Consolidated | Capex and Indebteness 28 4Q15 2Q16 3Q161Q16 4Q16 287.7 428.4 415.2 236.6 3.0x 3.3x 3.8x 3.1x 3.3x 397.8 353.2 2.7x 4Q16 w/o Rosário Net Debt and Net Debt / EBITDA (R$ million)Capex (R$ million)
8.18.2 7.6 8.9 10.3 9.9 4,201.1 2015 2016 3,739.3 2015 2016 2015 2016 2015 2016 Financial Data (R$ million and % Net Revenue) EBITDA shot up by 28.8% to R$ 108.7 MM, with 3.0% EBITDA margin; Operating expenses shrank by 0.4 p.p., from 8.0% to 7.6%; and The Independent customers segment grew by 20.6%. 955.1 1,136.3 10.6 8.0 2.6 3.0 2.4 1.6 Pharma Distribution Financial Performance 29 EBITDA Margin (%) Op. Exp. SG&A (%) Gross Margin (%) Gross Revenues (R$ million) 4Q15 4Q16 4Q15 4Q16 4Q15 4Q16 4Q15 4Q16
Especialidades 8.2 8.8 9.4 10.2 11.5 11.4 967.9 Crescimento de 6,3% nas vendas da categoria de genéricos. Aumento de 12,3% no lucro bruto, que alcançou R$ 94,2 milhões e margem bruta de 10,5%; Financial Data (R$ million and % Net Revenue) Operating expenses slid by 0.7 p.p., from 9.4% to 8.7%; Sales to the private sector rose by 37.8%; and Oncologicals sales boomed by 34.7%. 766.7 224.1 249.0 11.9 8.7 2,3 2,0 2,6 2,6 Specialties Financial Performance 30 4Q15 4Q16 2015 2016 4Q15 4Q16 4Q15 4Q162015 2016 4Q15 4Q162015 20162015 2016 EBITDA Margin (%) Op. Exp. SG&A (%) Gross Margin (%) Gross Revenues (R$ million)
Varejo EBITDA Margin (%) 27.0 26.4 Op. Exp. SG&A (%) 26.8 29.4 Gross Margin (%) 30.1 4Q15 4Q16 28.5 Gross Revenues (R$ million) 801.3 Crescimento de 6,3% nas vendas da categoria de genéricos. Aumento de 12,3% no lucro bruto, que alcançou R$ 94,2 milhões e margem bruta de 10,5%; 2015 2016 4Q15 4Q16 4Q15 4Q162015 2016 4Q15 4Q162015 2016 Financial Data (R$ million and % Net Revenue) Gross margin rose by 0.4 p.p. to 30.1%; EBITDA shot up by 86.1% to R$ 25.0 MM, with 3.1% EBITDA margin; and Average monthly sales per mature store came to R$ 579.8 thousand, 8.6% higher than ABRAFARMA’s. 2015 2016 748.7 198.1 202.4 29.7 26.4 3.1 1.8 1.2 2.3 Retail Financial Performance (w/o Rosário) 31
Total Sales Growth (%) Same Store Sales (%) SSS Mature Stores (%) Retail Operating Performance (w/o Rosário) 32 4Q15 2Q16 3Q161Q16 4Q162015 2016 -6.2 p.p. 3.9% 11.1%11.3% 10.6% 1.4% 12.3% 6.1% 4Q15 2Q16 3Q161Q16 4Q162015 2016 -4.4 p.p. -8.2 p.p. -9.2 p.p. 2.5% 8.5% 9.6% 8.2% 0.0% 9.4% 5.0% 3.7% 10.5% 12.4 % 4Q15 2Q16 3Q161Q162015 2016 -5.2 p.p. -9.1 p.p. 11.3% 2.2% 12.2% 7.0% 4Q16
Monthly Average Store's Sales (mature) (R$ thousand) # of Stores (units) Average Ticket (R$) 4 opening 4 close-down 6 reformulated 102 mature Retail Operating Performance (w/o Rosário) 33 564.0 589.7 549.2 4Q15 2Q16 3Q161Q16 4Q162015 2016 5.7% 4.2% 556.5 4Q15 2Q16 3Q161Q16 4Q162015 2016 580.1 548.4 579.8 130 129 128 129 129129 129 4Q15 2Q16 3Q161Q16 4Q162015 2016 9.8% 10.7%0.0% 35.8335.82 34.49 32.84 36.36 32.45 35.62 0.0%
Max Fischer - CFO & IRO | Beatriz Diez - IR Manager Tel.: 55 (21) 4009-0276 | E-mail: ri@profarma.com.br www.profarma.com.br/ir

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4Q16 Presentation

  • 1.
  • 2.
    2016 | CapitalAllocation Strategy
  • 3.
    3 In 2011, havingcompleted the wholesale expansion to a national coverage, the strategic decision was to diversify in search of higher returns for the company. Profarma 2016 | Capital Allocation Strategy 2011 Acquisition 60% Prodiet 2012 Acquisition 80% ArpMed Acquisition 40% Prodiet (remaining) Acquisition 50% Tamoio Acquisition 100% Drogasmil/ Farmalife 2013 2014 Acquisition 20% ArpMed (remaining) Joint Venture AmerisourceBergen 2015 Acquisition 50% Tamoio (remaining) Acquisition 100% Íntegra 2016 Acquisition 100% Rosário
  • 4.
    625 631 662776 578 571 709 41 68 101 53 68 96 156 272 389 571 625 672 730 1,032 903 1,028 1,376 2010 2011 2012 2013 2014 2015 2016 10.8% 10.9% 10.9% 12.2% 13.4% 14.0% 14.3% Profarma | Histórico Alocação de Capital Profarma 2016 | Capital Allocation Strategy Invested Capital Evolution – Profarma Group (R$ million) Pharma: 10.6% - last 5 years average. Specialties: 12.6% - last 5 years average for a adjusted EBITDA margin of 3.2%. Retail: 19.2% - top 3 players average. Consolidated: Weighted average potential ROIC, considering each division’s potential ROIC. 4 Invested Capital: Equity + Net Debt ROIC: NOPAT /Invested Capital Potential ROIC Pharma Consolidated potential ROICSpecialties Retail
  • 5.
    Profarma Drogasmil | Turnaround 5 MonthlyAverage Sales per Store # of stores and R$ thousands 84 74 67 67 63 60 62 64 64 67 67 68 67 67 68 67 165 262 314 329 324 346 365 385 375 375 385 401 411 442 418 456 1Q13 2Q13 3Q13 4Q13 1Q14 2Q14 3Q14 4Q14 1Q15 2Q15 3Q15 4Q15 1Q16 2Q16 3Q16 4Q16 # of stores Monthly average sale
  • 6.
    • Niche brands •More competitive market • Long period with no supply • Renewal of 70% of stores from the original platform • Complete brand renewal • Hiring of 400 employees in 3 months • Replacement of 100% of the technological platform • Directors and managers team build up on going Profarma Case Drogasmil versus Rosário • Leading brand • Less competitive market • Short period with no supply • Stores in good condition • Brand update (implemented in May/17) • Staff complete • Migration from SAP legacy to SAP d1000 • Complete management team 6
  • 7.
    54.0 29.6 24.8 28.3 31.8 38.1 Dec-15 Aug-16 Sep-16Oct-16 Nov-16 Dec-16 Profarma Rosário Integration Evolution Gross Revenues Evolution - Rosário (R$ million) * * Acquisition of Rosário by Profarma in 09/22/16 Potential of 59.0 Considering the average price increase of 10.5% occurred in March 2016(1) (1) 7 +54%
  • 8.
    ?? Fonte: Companies estimations #of stores (2015) Combined Operation Brazil’s main competitors Note (1): Considering 100% of Rede Tamoio, CSB Brasil (“Drogasmil” and “Farmalife”) and Rosário. Em R$ billion (2015) Brazil’s main competitors + Profarma d1000 | Overview of the Combined Retail Operation • Regions with different competitive environments assuring a more balanced gross margin. • 2nd largest in number of stores considering the regions where it acts. o Midwest leader o 2nd in Rio de Janeiro • 6th largest in number of stores in Brazil. • Brand portfolio with complementary positioning. • Platform that allows accelerated organic expansion. • Scale + 9.0 7.0 4.8 2.6 1.6 1.5 1.4 1.4 1.1 0.6 0.4 1º 2º 3º 4º 5º 6º 8º 9º 10º 11º7º 1,235 1,079 828 381 347 279 254 248 240 150 125 1º 2º 3º 4º 5º 7º 8º 9º 10º 11º6º 8
  • 9.
  • 10.
    42.0 38.7 58.2 77.6 89.1 Aug-16 Sep-16Oct-16 Nov-16 Dec-16 Integrated logistic structure enables a promptly accelerated inventory recovery in various regions. Benefícios do Modelo Misto Supply agility 47% 56% 65% 80% 82% Service Level (R$ million) Inventories Profarma Profarma’s Model Benefits to the Retail Division Lower working capital 3Q16 (Days) Accounts Receivable 19.0 52.9 47.9 24.0 21.8 88.4 60.3 50.0 25.0 96.0 65.0 56.0Cash Cycle Accounts Payable Inventories Optimized working capital and a cash cycle 30 days shorter than the average of other retail players. * * 10 +130% Player A Player B Acquisition of Rosário by Profarma in 09/22/16 Source: Companies website Normalized estimate d1000 varejo farma cash cycle * *
  • 11.
    Combined purchsing powerbetween retail and wholesale assures more competitive prices Benefícios do Modelo Misto Profarma Profarma’s Model Benefits Average top 3 retail players 11 Variation % CATEGORY A -2% RJSP R$ 93 Example: Retail RJ 100 Basis Variation % CATEGORY B -17% RJ R$ 91 RJSP R$ 42 RJ R$ 35 More competitive prices when buying inside the state directly from the wholesale Relevance to Suppliers| 2016 (R$ billion) Tax Optimization + Source: Companies website 5.5 5.6
  • 12.
    Benefícios do ModeloMisto Drugstore market – Sales evolution Profarma Profarma’s Model Benefits G&A Sinergies • Distribution center shared with wholesale clients – 35 thousand clients supplied nationally. • Shared Services Center: legal, fiscal, internal audit and human resources. • Better production balancing – optimization of the distribution center as the production of d1000’s volume occurs in its idleness time. 12 Source: Close Up | Abafarma: Associação Brasileira do Atacado Farmacêutico Wholesalers with lower dependence on big chains and market share growth with higher rates. (R$ billion) VAR ANO ANT. % 13.3% 11.7% 15.6% 13.0% 1.0% 14.3% 5.3%0.8% 1.5% 3.0% 4.3% 11.7% 25.6% 53.1% 57,4 0.9% 1.5% 3.3% 4.3% 11.4% 25.8% 52.9% 50.7 3.5% 26.2% 52.1% 64.7 11.2% MAT Jan/17MAT Jan/15 MAT Jan/16 Big Chains Independent Associations Small Chains Medium Chains Delivery Partner Pharmacies 1.0% 1.6%4.3% VAR ANO ANT. %
  • 13.
  • 14.
    Destaques | Aberturapor Divisão Specialties(*) 2015 2016 766.7 84.3 66.4 16.0 967.9 101.6 77.3 17.3 Retail(**) 2015 2016 748.7 222.3 200.6 13.4 839.4 253.9 230.2 18.7 Consolidated(*)(**) 2015 2016 4,913.5 649.4 524.8 114.7 5,529.7 726.9 582.1 144.6 Pharmaceutical Distribution 2015 2016 3,739.3 342.9 257.8 84.4 4,201.1 371.4 274.4 108.7 Gross Revenues Gross Profit SG&A Ebitda (*) pro forma figures: 100% of Specialties in 2015 and 2016. (**) pro forma figures: 100% of Tamoio in 2015. Profarma Highlights | Breakdown by Division 14
  • 15.
  • 16.
    3,398 3,722 749 839 767 968 4,914 5,530 Consolidado | ReceitaBruta 12.5% pro forma (R$ million) Specialties Pharma Distribution Sales increased by 12.4% year-over-year. Sales increased by 26.2% year-over-year. Sales increased by 12.1% year-over-year. Retail 2015 2016 Profarma Consolidated | Gross Revenues 16 Pharma Distribution Retail Specialties
  • 17.
    2.3% 3.0% 2015 20162015 2016 Consolidado| Ebitda e Margem Ebitda Ajustada 85 109 -4 19 -1 -3 80 124 85 109 13 19 16 17 115 145 3.0% 2.7% Profarma Consolidated | EBITDA and EBITDA Margin 17 Pharma Distribution Retail Specialties Consolidated IFRS (R$ million and % Net Revenues) pro forma (R$ million and % Net Revenues)
  • 18.
    Consolidado | Ebitdae Margem Ebitda Ajustada Profarma Consolidated | EBITDA and EBITDA Margin 18 Pharma Distribution 2015 2016Equity Income Specialties Rosário d1000 Consolidated IFRS Ebitda Bridge per Division 2016 vs 2015 (R$ million) pro forma 2015 2016 24.3 -6.3 29.0 -3.0 79.6 123.9 24.3 -6.3 10.7 1.3 114.6 144.6 Pharma Distribution SpecialtiesRosário d1000
  • 19.
    Consolidado | LucroLíquido 2016 2015 2016 X C (11.6) (14.5) (0.5) X C X C X C (9.1) (21.2) (49.0) (8.3) 2015 2016 (54.5) -0.6% -1.2% -0.3% -0.2% -1.1% -0.2% -0.3% 0.0% Profarma Consolidated | Net Income 19 Net Income Adjusted Net Income pro forma Net Income pro forma Adjusted Net Income pro forma (R$ million and % Net Revenues)Consolidated IFRS (R$ million and % Net Revenues)
  • 20.
    Consolidado | LucroLíquido Profarma Consolidated | Net Income 20 2015 Adjusted Net Income Bridge per Division 2016 vs 2015 (R$ million) pro forma Financial Expenses Tamoio’s Balance 2016d1000 Others Pharma Distribution Rosário Equity Income Specialties Non-recurring expenses 2015 Financial Expenses Tamoio’s Balance 2016d1000 Others Pharma Distribution Rosário Specialties Non-recurring expenses Consolidated IFRS 3.1 24.9 -9.9 -3.0 -14.5 0.2-9.1 -21.2 -48.9 -8.3 3.1 16.0 -9.9 -6.0 -14.5 0.2 -0.5 -14.5 -54.5 -11.6
  • 21.
    Capex 2016OtherIT Machinery and Equipment 32.28.4 4.3 19.5 4Q15 4Q16 415.2 236.6 3.0x 3.3x 4Q16 w/oRosário 353.2 2.7x Profarma Consolidated | Capex and Indebtedness 21 Net Debt and Net Debt / EBITDA (R$ million)Capex (R$ million)
  • 22.
  • 23.
    3,398 3,722 749 839 767 968 861 911 906925 980 198 196 205 198 241 224 231 246 241 249 4,914 5,530 1,279 1,338 1,357 1,364 1,470 3,673 3,862 308 839 919 930 945 965 1,022 82 196 205 198 241 3,981 4,701 1,001 1,126 1,150 1,163 1,263 Consolidado | Receita Bruta 4Q15 2Q16 3Q161Q16 4Q162015 2016 4Q15 2Q16 3Q161Q16 4Q162015 2016 18.1% 26.1% 12.5% 14.9% Profarma Consolidated | Gross Revenues 23 Consolidated IFRS (R$ million and % Net Revenues) pro forma (R$ million and % Net Revenues) Pharma Distribution Retail Specialties
  • 24.
    343 371 94 254 82 75 114 9488 24 58 63 60 72 437 625 106 133 178 154 160 343 371 222 254 84 102 82 75 114 94 88 56 58 63 60 72 24 24 31 24 23 649 727 162 158 208 178 183 Consolidado | Lucro Bruto 4Q15 2Q16 3Q161Q16 4Q162015 2016 12.6% 15.3% 12.2% 13.6% 17.8% 15.2% 14.6% 4Q15 2Q16 3Q161Q16 4Q162015 2016 15.0%15.0% 14.4% 13.5% 17.6% 14.9% 14.3% Profarma Consolidated | Gross Profit 24 Consolidated IFRS (R$ million and % Net Revenues) Pharma Distribution Retail Specialties pro forma (R$ million and % Net Revenues)
  • 25.
    258 274 100 230 67 6066 69 79 26 52 53 51 74358 505 93 112 120 120 153 258 274 201 230 66 77 67 60 66 69 79 52 52 53 51 74 18 18 20 20 19525 582 138 130 140 140 172 Consolidado | Despesas Operacionais SGA 4Q15 2Q16 3Q161Q16 4Q162015 2016 4Q15 2Q16 3Q161Q16 4Q162015 2016 12.4% 10.3% 10.8% 11.5% 12.0% 11.8% 14.0% 12.0%12.1% 12.3% 11.1% 11.8% 11.7% 13.4% Profarma Consolidated | Operating Expenses - SGA 25 Consolidated IFRS (R$ million and % Net Revenues) Pharma Distribution Retail Specialties pro forma (R$ million and % Net Revenues)
  • 26.
    85 109 13 19 16 17 20 18 45 30 16 2 4 10 7 -2 5 4 5 2 6 115 145 28 26 60 39 20 85 109 -4 19 -1 -3 20 18 45 30 16 -1 4 10 7 -2 0 -1-1 -2 0 80 124 18 21 54 35 14 pro forma (R$ million and % Net Revenues) Consolidado | Ebitda e Margem Ebitda Ajustada 4Q15 2Q16 3Q161Q16 4Q162015 2016 4Q15 2Q16 3Q161Q16 4Q162015 2016 Pharma Distribution Retail Specialties 2.3% 2.1% 2.1% 5.4% 3.5% 1.3% 3.0% 3.0% 2.5% 2.2% 5.1% 3.3% 1.6% 2.7% Profarma Consolidated | EBITDA and EBITDA Margin 26 Consolidated IFRS (R$ million and % Net Revenues)
  • 27.
    Consolidado | LucroLíquido Net Income Adjusted Net Income 4Q163Q16 2Q16 4Q15 1Q16 pro forma Net Income pro forma Adjusted Net Income 2016 2015 2016 8.5 (6.2) (9.3) (9.5) (18.8) 16.0 (7.3) (4.4) 0.8% 0.1% -1.8% 1.6% -0.5% -0.9% -3.5% -0.6% -0.8% 1.3% 0.0% -1.5% -0.6%-0.3% 0.6% -1.0% -3.1% -0.6% -0.9% (11.6) (39.6) (6.8) (18.9)(14.5) (0.5) 7.5 15.0 4T16 pro forma (R$ million and % Net Revenues) (9.1) (21.2) 1.0 (38.6) Consolidated IFRS (R$ million and % Net Revenues) (49.0) (8.3) 4Q163Q16 2Q16 4Q15 1Q162015 2016 (54.5) (3.9) -0.6% -1.2% -0.3% -0.2% -1.1% -0.2% -0.3% 0.0% (12.2) (0.1) (10.2) (6.9) Profarma Consolidated | Net Income 27 -0.9% X C X C
  • 28.
    Capex 2016 OtherIT Machinery and Equipment 32.28.4 4.3 19.5 Profarma Consolidated |Capex and Indebteness 28 4Q15 2Q16 3Q161Q16 4Q16 287.7 428.4 415.2 236.6 3.0x 3.3x 3.8x 3.1x 3.3x 397.8 353.2 2.7x 4Q16 w/o Rosário Net Debt and Net Debt / EBITDA (R$ million)Capex (R$ million)
  • 29.
    8.18.2 7.6 8.9 10.3 9.9 4,201.1 2015 2016 3,739.3 2015 20162015 2016 2015 2016 Financial Data (R$ million and % Net Revenue) EBITDA shot up by 28.8% to R$ 108.7 MM, with 3.0% EBITDA margin; Operating expenses shrank by 0.4 p.p., from 8.0% to 7.6%; and The Independent customers segment grew by 20.6%. 955.1 1,136.3 10.6 8.0 2.6 3.0 2.4 1.6 Pharma Distribution Financial Performance 29 EBITDA Margin (%) Op. Exp. SG&A (%) Gross Margin (%) Gross Revenues (R$ million) 4Q15 4Q16 4Q15 4Q16 4Q15 4Q16 4Q15 4Q16
  • 30.
    Especialidades 8.2 8.8 9.4 10.2 11.5 11.4 967.9 Crescimento de 6,3%nas vendas da categoria de genéricos. Aumento de 12,3% no lucro bruto, que alcançou R$ 94,2 milhões e margem bruta de 10,5%; Financial Data (R$ million and % Net Revenue) Operating expenses slid by 0.7 p.p., from 9.4% to 8.7%; Sales to the private sector rose by 37.8%; and Oncologicals sales boomed by 34.7%. 766.7 224.1 249.0 11.9 8.7 2,3 2,0 2,6 2,6 Specialties Financial Performance 30 4Q15 4Q16 2015 2016 4Q15 4Q16 4Q15 4Q162015 2016 4Q15 4Q162015 20162015 2016 EBITDA Margin (%) Op. Exp. SG&A (%) Gross Margin (%) Gross Revenues (R$ million)
  • 31.
    Varejo EBITDA Margin (%) 27.0 26.4 Op. Exp.SG&A (%) 26.8 29.4 Gross Margin (%) 30.1 4Q15 4Q16 28.5 Gross Revenues (R$ million) 801.3 Crescimento de 6,3% nas vendas da categoria de genéricos. Aumento de 12,3% no lucro bruto, que alcançou R$ 94,2 milhões e margem bruta de 10,5%; 2015 2016 4Q15 4Q16 4Q15 4Q162015 2016 4Q15 4Q162015 2016 Financial Data (R$ million and % Net Revenue) Gross margin rose by 0.4 p.p. to 30.1%; EBITDA shot up by 86.1% to R$ 25.0 MM, with 3.1% EBITDA margin; and Average monthly sales per mature store came to R$ 579.8 thousand, 8.6% higher than ABRAFARMA’s. 2015 2016 748.7 198.1 202.4 29.7 26.4 3.1 1.8 1.2 2.3 Retail Financial Performance (w/o Rosário) 31
  • 32.
    Total Sales Growth(%) Same Store Sales (%) SSS Mature Stores (%) Retail Operating Performance (w/o Rosário) 32 4Q15 2Q16 3Q161Q16 4Q162015 2016 -6.2 p.p. 3.9% 11.1%11.3% 10.6% 1.4% 12.3% 6.1% 4Q15 2Q16 3Q161Q16 4Q162015 2016 -4.4 p.p. -8.2 p.p. -9.2 p.p. 2.5% 8.5% 9.6% 8.2% 0.0% 9.4% 5.0% 3.7% 10.5% 12.4 % 4Q15 2Q16 3Q161Q162015 2016 -5.2 p.p. -9.1 p.p. 11.3% 2.2% 12.2% 7.0% 4Q16
  • 33.
    Monthly Average Store'sSales (mature) (R$ thousand) # of Stores (units) Average Ticket (R$) 4 opening 4 close-down 6 reformulated 102 mature Retail Operating Performance (w/o Rosário) 33 564.0 589.7 549.2 4Q15 2Q16 3Q161Q16 4Q162015 2016 5.7% 4.2% 556.5 4Q15 2Q16 3Q161Q16 4Q162015 2016 580.1 548.4 579.8 130 129 128 129 129129 129 4Q15 2Q16 3Q161Q16 4Q162015 2016 9.8% 10.7%0.0% 35.8335.82 34.49 32.84 36.36 32.45 35.62 0.0%
  • 35.
    Max Fischer -CFO & IRO | Beatriz Diez - IR Manager Tel.: 55 (21) 4009-0276 | E-mail: ri@profarma.com.br www.profarma.com.br/ir