This earnings release from Profarma highlights their financial results for the second quarter of 2007, including revenue growth of 29.2% and net profit growth of 134.5%. A key event was the acquisition of Dimper's assets in Rio Grande do Sul for R$13.1 million, expanding their market share. Adjusted EBITDA grew 16.8% and their new Ceará branch achieved 5.9% market share, contributing to continued financial performance.

1. 2Q07 Earnings Release
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2. Highlights For The Period
– Acquisition of the operational assets of Dimper’s Rio Grande do Sul
branch, for R$ 13.1 million
– Gross revenues of R$ 609.7 million, growth of 29.2% comparing to 2Q06.
– Ajusted EBTIDA recorded a growth of 16.8% related to 2Q06, reaching
R$ 19.7 million on 2Q07.
– Net Profit of R$ 8.3 million on 2Q07, increase of 134.5% comparing to
2Q06.
– Newly opened Ceará branch reached gross revenues of R$ 5.3 million,
and 5.9% market share in June.
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3. Acquisition
• Profarma acquired for R$ 13.1 million the operational assets of Dimper Ltda,
in Rio Grande do Sul, which totaled R$ 132 million of Gross Revenues in
2006
• The state of Rio Grande do Sul represents the fourth largest pharmaceutical
market in Brazil, with approximately R$ 1.5 billion in sales in 2006 (7.3% of
the Brazilian market)
• Portfolio of 1,400 registered drugstores, 120 employeers and 40 salesmen
• Accretive acquisition: 5x EV/EBITDA 07 – 67%
4.1 x EV/EBITDA 08 – 64%
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4. Gross Revenues Evolution
In R$ MM
29.2%
609.7
528.6
471.8
2Q06 1Q07 2Q07
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5. Gross Revenues Breakdown
In R$ MM
(R$ Million) 2Q07 2Q06 % Variation 1Q07 % Variation
Branded 404.7 320.4 26.3% 374.0 8.2%
Generics 35.6 22.7 56.7% 33.0 7.8%
OTC 120.2 88.8 35.4% 99.0 21.4%
Health and Beauty Products 36.7 30.0 22.3% 37.4 -1.8%
Other 12.2 9.6 27.1% 11.7 4.6%
Services Rendered 0.3 0.4 -0.3 0.2 0.1
Total 609.7 471.8 29.2% 555.3 9.8%
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6. Market Share (%)
10.7
9.6 9.6
9.3
8.4
2003 2004 2005 2006 1ºSem07
Source: IMS
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7. Gross Profit
In R$ MM and as % Net Revenues
10.1%
9.4%
8.9%
50.0
42.2 42.8
2Q06 1Q07 2Q07
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8. Operating Expenses
% Net Revenue
7.9%
7.7%
6.0%
42,013
37,258
24,933
2Q06 1Q07 2Q07
EXPENSES: General and Administrative + Selling and Marketing + Logistics and Distribution
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9. Net Financial Expenses
% Net Revenue
2.1%
532.3
481.7
417.2
0.6%
0.5%
2Q06 1Q07 2Q07
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10. Net Income
In R$ MM and as % Net Revenues
1.6%
0.8% 1.1%
8.3
5.1
3.5
2Q06 1Q07 2Q07
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11. Adjusted EBITDA and
EBITDA Margin
In R$ MM and as % Net Revenues
4.0% 3.7%
3.1%
19.7
16.8 15.0
2Q06 1Q07 2Q07
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12. Cash Flow
CASH FLOW
(R$ Million) 2Q07 2Q06 % Variation 1Q07 % Variation
Cash Flow Used in Operating Activities (67.1) (19.7) -241.4% (58.0) -15.7%
Internal Cash Generation 17.1 5.8 192.0% 10.5 62.8%
Operating Assets Variation (84.2) (25.5) -230.1% (68.5) -22.9%
Trade Note Receivab le (22.4) (15.2) -47.7% (43.4) 48.4%
Inventories (41.3) 30.8 -234.1% (3.4) -1102.9%
Suppliers (8.9) (44.8) 80.1% (19.1) 53.3%
Other Items (11.6) 3.7 -415.4% (2.5) -364.3%
Cash Flow Used in Investing Activities (1.2) (0.1) -1371.6% (0.9) -31.2%
Cash Flow Generated by Financing Activities (0.0) 22.0 -100.1% 0.5 -105.0%
Net Increase (Decrease) in Cash (68.4) 2.2 -3174.1% (58.4) -17.0%
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13. Indebtedness
In R$ MM
Net Debt (R$MM) and Net Debt / Ebitda
138.5
68.6
2.1
-0.1 0.9
-4.1
2Q06 1Q07 2Q07
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14. Capex
In R$ MM and as % Net Revenues
0.2% 0.2%
0.0%
1.2
0.9
0.1
2Q06 1Q07 2Q07
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15. Operating Indicators
Service Level Logistics E.P.M.
(units served / units requested) (Errors per Million)
92.0% 248.5
90.0% 201.0 204.3
86.4%
2Q06 1Q07 2Q07 2Q06 1Q07 2Q07
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16. 96
101
106
111
116
121
126
131
136
141
146
151
156
161
166
171
176
25/10/2006
2/11/2006
10/11/2006
18/11/2006
26/11/2006
4/12/2006
12/12/2006
20/12/2006
28/12/2006
5/1/2007
Share Performance
13/1/2007
21/1/2007
29/1/2007
6/2/2007
Ibovespa
14/2/2007
22/2/2007
2/3/2007
IGC
10/3/2007
18/3/2007
26/3/2007
Profarma
3/4/2007
11/4/2007
19/4/2007
27/4/2007
5/5/2007
13/5/2007
21/5/2007
29/5/2007
6/6/2007
14/6/2007
* 100 pts basis on 25/oct/2006
22/6/2007
30/6/2007
137
138
162
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17. RI Contact:
Max Fischer
CFO and IRO
phone.: 55 (21) 4009 0276
E-mail: ri@profarma.com.br
www.profarma.com.br/ir
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