Brazil Pharma. Bradesco CEO Conference - New York November 2012

Transcription

1 Brazil Pharma Bradesco CEO Conference - New York November 2012

2 The Opportunity

3 Industry Performance A Growth and Accelerating History Sales Performance in the Brazilian Pharmacy Retail Industry from (R$ Billion) Drivers Macro Drivers Micro Timing Income Growth Population Aging Generics Drugs Regional Brands Fragmented Formalization Source: IMS. 3

4 Geographic Concentration still concentrated in the Southeast There is low competition on the regions outside the Southeast. Drugstores per region (2011) Brazil Pharma vs Competitors (2011) More dense Less dense Competitors Focus Market Growth - CAGR ( ) Source: IMS. 4

5 The Company

6 National Footprint Largest drugstore chain outside the Southeast Brazil Pharma footprint and clusters Owned stores Owned stores Owned stores REGIONS Owned stores Footprint 207 Owned stores 369 Franchises 1,050 Stores North 109 Northeast 244 Midwest 121 Southeast South Distribution centers Source: Brazil Pharma 6

7 Strong Local Knowledge With a leadership position in four out of five regions Drugstore ranking per Region Number of Stores 1 North Northeast Mid-west Southeast South 1 o 2 o 3 o n/a (2) 4 o n/a (2) n/a (2) n/a (2) n/a (2) n/a (2) Source: Brazil Pharma, Abrafarma ; Note: (1) Ranking by number of owned stores as of Dezember 31, 2011 considering the four largest Drugstore chains in Brazil; (2) n/a: Other chains do not have operations in the region 7

8 Competitive Advantages Taking benefits of this. Brazil Pharma competitive advantages Strong Organic Growth Capacity Organic Growth (# owned stores) Maturation of Owned Stores (3Q12) 14.2% 17.2% 54.9% 13.7% Stores < 12 months Stores > 12 < 24 months Stores > 24 < 36 months Stores > 36 months 2009 Openings Openings Openings Openings 3Q M12 Geography: More Growth and Less Competition (CAGR07-11 ) Profitable Sales Mix (3Q12) Brazil Pharma Abrafarma 17.0% 11.7% 45.9% 37.1% 28.5% 64.9% HPC Branded Generics Source: Brazil Pharma and IMS. 8

9 Performance Since IPO

10 Increasing Footprint Since IPO Strong delivery since the IPO Footprint at and 12 months later the IPO IPO Actual Platform (1Q11) 663 Points of sale 302 Owned Stores 361 Franchises (3Q12) 1,050 Points of sale 681 Owned stores 369 Franchises 60 Owned stores 237 Owned stores Owned stores 89 Owned stores 121 Owned stores 361 Franchises 369 Franchises 153 Owned stores 207 Owned stores Owned stores Franchises Distribution Center (1) Sant Ana s Distribution Center caught fire on December A new distribution center was inaugurated on November, 2012 ; (2) Includes 11 stores acquired from Estrela Galdino on April, 2012 and added to Sant Ana s store count in June 30, 2012.Therefore they generated no revenues in 9M12. 10

11 Sales Profile Strong historical sales growth and same-store sales (SSS) Same-Store Sales 1 (Total - %) (Mature Stores - %) 10.0% 12.4% 8.6% 16.2% 13.8% 15.1% 5.8% 8.9% 6.1% 12.1% 9.1% 7.8% 1Q11 2Q11 3Q11 1Q12 2Q12 3Q12 Sales Mix 1 (% of Gross Revenues) 1Q11 2Q11 3Q11 1Q12 2Q12 3Q12 Average Ticket 1 (R$) 21.0% 16.4% 17.1% 17.0% 47.5% 46.1% 46.4% 45.9% % 37.5% 36.5% 37.1% 2011 (Nonproforma) 1Q12 2Q12 3Q12 Non-Medicine Branded Generics (1) Proforma information, except when otherwise indicated. 1Q11 2Q11 3Q11 1Q12 2Q12 3Q12 11

12 Financial Highlights Gross Revenues¹ (R$ Million) Gross Profit and Gross Margin 1 (R$ Million % of Gross Revenues) 31.4% 31.5% 30.2% 30.1% 30.7% Q11 4Q11 1Q12 2Q12 3Q12 Adjusted EBITDA and EBITDA Margin 1,2 (R$ Million % of Gross Revenues) 3Q11 4Q11 1Q12 2Q12 3Q12 Adjusted Net Profit and Adjusted Net Margin 1,3 (R$ Million % of Gross Revenues) 6.5% 6.1% 5.3% 6.2% 6.5% 3.6% 4.4% 1.4% 3.3% 3.3% Q11 4Q11 1Q12 2Q12 3Q12 3Q11 4Q11 1Q12 2Q12 3Q12 (1) As of September 30 th, 2012, on a proforma basis; (2) Adjusted Ebitda - excludes non-recurring expenses ; (3) Adjusted Net Profit - excludes non-recurring expenses, brand and intangible assets amortization and non-recurring IR & Social Contribution effect. 12

13 Operational Performance Since IPO not only in growth, but also on the performance Incresing operational efficiency and stores productivity Stores Performance IPO (1Q11) BRPH 3Q12 # of store employees per store % Sales per store / employee (R$ thousand) 34, % Store EBITDA / employee 1 (R$ thousand) % Administrative Performance # of administrative + distribution center employees per store % EBITDA / employee 2 (R$ thousand) % Source : Brazil Pharma ; Notes: (1) Considers total stores and distribution centers employees ; (2) Considers total employees (store, distribution centers and administrative). 13

14 Focus on Integration

15 Brazil Pharma History 186 accumulated years of experience Great regional companies into a Excellent National Company 186 years of History IPO E 2014E 2015E 2016E Source: Brazil Pharma 15

16 One Company, One Culture becoming just one Company Our dream is what moves our People Dream Mission People To be the best Drug Store Chain in the country helping create a healthier world Provide health and well-being for our customers Create Long-term partnerships with our suppliers To have the best working climate to develop 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 our talents Source: Brazil Pharma 16

17 Unique Company Distinct Companies Corporate Structure With a simple and aligned structure Holding Corporate Commercial Operations Administrative (SSC) #1 for Suppliers #1 for Customers #1 for Talents Source: Brazil Pharma 17

18 Operationally Integrated becoming 100% integrated Corporate Commercial Operations Administrative (SSC) 1 Joint negotiation 2 Team centralization Continuos improvement 1. Platforms operate separately but with strict Corporate guidelines; 2. Centralization of Procurement department: unification of regional talents into one single team; 3. Commercial intelligence: relationship with the industry, sales mix improvement, scale in campaigns, standardization of DC s and Logistics. Source: Brazil Pharma 3 1 Management Team 2 Training and Regional Leardeships 3 Continuos improvement 1. Management Team to monitor the Operations Team of each regional platform: Culture dissemination and performance monitoring; 2. Training and formation of Regional leaderships; 3. Centralized operation s management. 1 Mapping 2 Plugging-in 3 Continuos improvement 1. Requirements understanding, drawing the scope and processes; 2. Plug-in platforms into the SSC. 3. Through quality tools, in the quest for constant improvement in its processes and productivity gains. 18

19 Peers

20 Brazil Pharma: Comparing With Peers¹ Solid track record, with improvements to come on maturation and integration Stores (as of September 30 th, 2012) LTM 3Q12 Gross Profit and Gross Margin (R$ Million % of Gross Revenues) 30.6% 1, % 1 2 BRPH RD LTM 3Q12 Selling, General, Administrative and Other Expenses¹ and % of Gross Revenue (R$ Million % of Gross Revenues) LTM 3Q12 EBITDA¹ and EBITDA Margin (R$ Million, % of Gross Revenues 24.6% , % 6.0% % BRPH RD BRPH RD 1- Adjusted figures according to each company s criteria. 20

21 Farmais

22 Why to expand the footprint? Categories in which Own BPRPH Platforms act Potential categories for FARMAIS 11,172 41,052 # Stores by Sales category Market size 64,281 Stores Addressable market 10,062 stores Average sales of each store R$ thousand/month Average turn-over ~R$ 140 thousand/month Total turn-over ~R$ 1,4 Bi / month ~R$ 16,8 Bi / year Total sales of each category R$ MM/year Market size R$ 37,437 million Source: IMS internal bases, by distribution study. Data related to medications 22

23 Appendix Company s Structure

24 Shareholder s Structure BTG Pactual + FIPs Operating Partners Managers Free Float 35.7% 19.6% 0.4% 38.7% 100% 100% 100% 100% 100% 100% Note: As of November,

25 Remaining Lock-up Period Oct/ Jun/2011 Jun/2014 Shares: 2,250,974 % Shares: Jun/2011 Jun/2014 Shares: 7,864,262 % Shares: Feb/2012 Feb/2015 Shares: 15,000,000 % Shares: Mar/2012 May/2015 Shares: 23,840,957 % Shares: 9.4 Note : Rosario s familly does not have lock-up (1) After the 3 years lock-up shareholders have the right to sell all stake (2) Shareholder have the right to sell up to 1/3 of the shares every year after the first anniversary (June, 2011). 25

26 Experienced Management Fronts of Integration Experienced Management Experience in retail / pharmaceutical industry Commercial Integration Operations Integration Management SSC Integration Carlos Dutra 20 years Rodrigo Silveira 19 years Flávio Sanchez 16 years Procurement Logistic Trade Marketing Operations N/NE Operations NE (Bahia) Operations - S Operations - MW IT SSC Renato Stefanoni Jadir Tavares Rovilson Apolinário Ricardo Kitamura Wesley Barbosa Delmar Raguzzoni Emílio Azevedo Rogério Segala Juliana Amaral 7 years 20 years 33 years 12 years 12 years 18 years 20 years 20 years 10 years 26

27 Appendix Operations

28 Trade Marketing Constantly working on improving consumption experience... Non-renovated store 28

29 Trade Marketing Constantly working on improving consumption experience... Renovated store 29

30 Logistics...Operational excellence supporting sales and growth New DC Distrito Federal Situated in Brasília Services Midwest region; Storage area: 5,000 m²; Ceiling: 8 mts; 3.6 thousand pallet position; Production capacity of 200,000 units/day; Storage capacity: up to 13,000 SKU; Operates with WMS system. 30

31 Logistics...Operational excellence supporting sales and growth New DC Bahia Situated in Camaçari Services Bahia state, may also service Sergipe state Storage area: 9,000 m²; Ceiling:12 mts; 6,000 pallet positions (reaching up to 8.6 thousand); Production capacity of 400,000 units/day; Storage capacity: up to 15,000 SKU; Operates with WMS system. 31