GENOMMA LAB INTERNACIONAL. June, 2016

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1 GENOMMA LAB INTERNACIONAL June, 2016

2 COMPANY OVERVIEW

3 THE EVOLUTION OF GENOMMA LAB Business Realignment Changed Business Model to OTC/PC Founded as an infomercial marketing company Organic growth through brand and product development 2002 Continue to implement Turnaround process Expanded management team 2003 Sale of majority stake in Grupo Marzam Entrance to IPC Sustainability Index and MSCI Index Performed its IPO in the Mexican Stock Market Appointment of Máximo Juda as CEO and Antonio Zamora as CFO Acquisition of Marzam Several PC & OTC brand acquisitions from Beginning of Turnaround process Launch of operations in Brazil and USA Nexxus Capital invested 30% of Equity Expansion 3

4 INNOVATION & DEVELOPMENT (Product Selection) OUTSOURCED MANUFACTURING QUALITY ASSURANCE SALES DISTRIBUTION MARKETING & BRANDING POS COMMERCIAL STRATEGY SUCCESSFUL BUSINESS MODEL Our business model is focused on adapting quickly to marketing dynamics. Best formulation and presentation Performance Analysis Impressively short lead time from an idea generation to new product launches and line extensions. Rapid and effective reaction to competitive challenges Pillars 4

5 ORGANIC GROWTH THROUGH INNOVATION AND DEVELOPMENT Our product launch strategy is based on Innovation and Development of new brands and products, as well as on the launch of Line Extensions to strengthen our existing brands. INTERNALLY DEVELOPED BRANDS LINE EXTENSIONS Nasal Hygiene For adults For children Nasalub Max Vitamins Energetic beverage with vitamins Vitamins for children

6 MARKETING AND BRANDING RESULTS ORIENTED METRICS Demand for our products is mainly generated through advertising. We have a directed advertising strategy, based on metric analyses of our clients and the market. We monitor such information weekly, which allows us to have a quick response to changes in competition and consumer s preferences. 6

7 COMMERCIAL STRATEGY - UPDATE 1 POS EXECUTION 71% STORES in Mexico executed in line with IN-STORE VISION 2 CHANNEL AND CUSTOMER EXPANSION +58 New Customers / +27,600 Stores (Mexico and International) 3 GO TO MARKET (-)3 to 5 pts trade terms improvement and PAY FOR PERFORMANCE (Mexico and International) 4 COMMERCIAL INNOVATION +5-7 Global Initiatives 7

8 CORE COMPETENCES BEFORE Demand Generation Demand Generation Win Online AFTER Talent Talent POS Execution Flawless POS Execution Mexico: Sell-in International: Sell-out, EBITDA, FCF Genomma Lab: Sell-out, EBITDA, FCF Growth Brand Sustainability Core Brands 8

9 DIVERSIFIED DISTRIBUTION PLATFORM Genomma s balanced and broad distribution platform is unique. Through a combination of mass merchandisers, pharmacy chains, and wholesalers, Genomma s products reach over 50,000 points of sale in Mexico and more than 150,000 in the international operations. SALES DISTRIBUTION IN MEXICO: 6% 18% CONVENIENCE AND DEPARTMENT STORES PHARMACY CHAINS 52% RETAILERS 24% WHOLESALERS *% of Mexico Sales as of December 2015 (LTM) 9

10 TURNAROUND PROCESS

11 TURNAROUND PROCESS STRATEGIC IMPERATIVES Shareholder value creation Sustainable business model and stronger brands International expansion Less dependence on Mexico Strengthening of corporate policies and procedures Tightened policies and procedures with additional oversight to support the future strategy STRONGER POLICIES & DISCLOSURE TURNAROUND PROCESS PILLARS OF NEW STRATEGY Brands: Focus on core brands Mexico: Destocking of channel inventory Geographical presence: diversification Efficiency: SGM&A leverage New management team 11

12 TURNAROUND PROCESS PILLARS OF NEW STRATEGY 1 FOCUS ON CORE BRANDS, REINFORCE BRAND EQUITY AND SUSTAINABILITY Genomma's core asset is its portfolio of market leading brands. As of March 2016, the Company has a total of 95 brands. The following table shows the Company s top 25 brands for the last twelve months as of March 2016, which represented 88.2% of Total Sales. OTC PC OTC / PC BRAND PRODUCT CATEGORY BRAND PRODUCT CATEGORY BRAND PRODUCT CATEGORY Pain Relief Hair Care Anti-acne Analgesic Spider Vein Treatment Anti-scar, Anti-wrinkle Sexual Protection and Enhancement Cervical Infections Treatment Anti-dandruff Shampoo Anti-flu Hemorrhoid Treatment Colitis Treatment Vitamins Athlete s Foot Treatment Analgesic Cough Syrup Anti-flu Nail Fungus Treatment Skin Care Skin Care Hair Care Hair Care Baldness Treatment Anti-micotic Osteoarthritis Treatment 12

13 TURNAROUND PROCESS PILLARS OF NEW STRATEGY 2 MEXICO DESTOCKING OF CHANNEL INVENTORY SELL-IN 40% SELL-OUT 12% 30% 10% 20% 8% 10% 0% 1Q15 2Q15 3Q15 4Q15 2% 6% 4% 12% -10% -20% -30% -26% -59% -35% 2% 0% -2% 2% 3% 2Q15 3Q15 4Q15 1Q16* -40% -4% -8% -50% -6% -60% -8% INVENTORIES Objective *In line with guidance 2Q15 3Q15 4Q15 1Q16 13

14 TURNAROUND PROCESS PILLARS OF NEW STRATEGY 3 GEOGRAPHICAL PRESENCE INTERNATIONAL GROWTH & MARGIN U.S.A. 13% MEXICO 35% LATAM 52% 55% Mexico Pharma 45% PC Pharma Over the Counter (OTC) and Generics PC Personal Care As of March 2016 LTM TOP INTERNATIONAL COUNTRIES 1. Argentina 2. U.S.A. 3. Brazil 4. Chile 5. Colombia 6. Peru 7. Ecuador 14

15 TURNAROUND PROCESS PILLARS OF NEW STRATEGY 3 GEOGRAPHICAL PRESENCE: DIVERSIFICATION MEXICO BRANDS: 72 POS: 50,000 U.S.A. BRANDS: 21 POS: 41,000 Presence in 20 countries More than 200,000 POS A population over 600 million As of March 2016 LTM, 65% of our Total Sales came from our International Operations REST OF LATAM* BRANDS: 24 POS: 23,924 COLOMBIA BRANDS: 14 POS: 16,166 ARGENTINA BRANDS: 19 POS: 10,400 BRAZIL BRANDS: 15 POS: 60,000 *REST OF LATAM: Bolivia Chile Costa Rica Dominican Republic Ecuador El Salvador Guatemala Honduras Nicaragua Panama Paraguay Peru Puerto Rico Trinidad and Tobago Uruguay 15

16 (Number of Employees) (Million Pesos) TURNAROUND PROCESS PILLARS OF NEW STRATEGY 4 EFFICIENCY: SGM&A LEVERAGE To increase efficiency and improve margins, we have made a significant reduction in headcount in the past months. Inventories in our warehouse have also been reduced significantly to improve cash conversion cycle and free cash flow generation. HEADCOUNT* INVENTORIES* % -63.0% , SEPTEMBER 2014 MARCH MARCH 2015 MARCH 2016 *Mexican operations 16

17 TURNAROUND PROCESS PILLARS OF NEW STRATEGY 4 EFFICIENCY: SG&A LEVERAGE We have made significant efforts to achieve SGM&A efficiencies in order to improve margins, which have started to show results in our operations. 5 NEW MANAGEMENT TEAM TO EXECUTE THE NEW STRATEGY AND DRIVE VALUE CREATION IN THIS NEW PHASE 17

18 FINANCIAL PERFORMANCE

19 NET SALES (MILLION PESOS) CAGR 23% $8,056 $9,800 $11,361 $11,541 $11,042 $6,264 $4,425 $2,629 $2,769 $2, Q15 1Q16 1Q16 1Q15 Pharma* PC Total 1Q16 Pharma* PC Total 1Q15 %Var Mexico % International , , , , % TOTAL 1, , , , , , % *Pharma refers to OTC and Generics in Mexico. 19

20 * 1Q15* 1Q16* EBITDA (MILLION PESOS) 6, % 5,000 CAGR 15% 90.0% 80.0% 70.0% 4,000 3,000 2,000 1, % 25.8% 27.0% 2, % 1,144 1, % 2, % 3, % 2, % 1, % % % 50.0% 40.0% 30.0% 20.0% 10.0% - 0.0% EBITDA EBITDA MARGIN *EBITDA was adjusted by adding non-recurring expenses related to the downsizing of our headcount in Mexico (severance payments) incurred during 2015, and inventory destructions and fees and other expenses derived from the sale of Grupo Marzam during Q4 15. One-off effects are related to the reinforcement of policies and procedures during Q

21 Q15 1Q16 NET INCOME (MILLION PESOS) 1,700 1, % 19.5% 17.2% 1, % 1, % 1, % 1, % 1, % -1, % % % 50.0% 30.0% 10.0% -10.0% % -1, % -1, % NET INCOME AS % OF REVENUE 21

22 INVESTOR RELATIONS CONTACT: ANA MARÍA YBARRA Investor Relations Officer Tel. +52 (55) ext BARBARA CANO MBS Value Partners Tel. +1 (646)