apresentação en_1q14

MAY 22, 2014

1Q14 EARNINGS RELEASE

Highlights | Corporate

2

The only Brazil’s mixed market player that features exposure and expansion capacity

in the segments of Retail, Hospital & Specialties and Distribution;

Strategic partnership with AmerisourceBergen, the world’s largest player in the

pharmaceutical specialties, resulting in the creation of the company Profarma

Specialty;

The Company carried out four acquisitions over the last three years, including its

entry into the Retail pharmaceutical segment, and the attainment of a market position

as one of the major players within this segment in the state of Rio de Janeiro;

Proven capacity to integrate acquisitions.

Highlights | Period

3

CONSOLIDATED

• The EGM held on May 12, 2014 approved the capital

increase-totaling R$ 187.0 million at least and R$ 335.6

million at most-that will allow AmerisourceBergen to

become one of Profarma’s shareholders.

RETAIL

• In relation to 1Q13, Drogasmil / Farmalife’s sales rise by 45.5% and Tamoio’s sales by14.8%;

• The new IT (SAP + ITEC) platform was implemented at Drogasmil/Farmalife in Feb.14;

• A guidance for the opening of Drogasmil / Farmalife stores has been announced: between 33 and 37 stores in the next 12

months.

SPECIALTIES

• Profarma started a strategic association with the world’s largest distributor of specialties, U.S. company

AmerisourceBergen, to create Profarma Specialty;

• The remaining portion of Arpmed (20%) was acquired;

• Sales up 5.4% year-over-year.

PHARMACEUTICAL DISTRIBUTION

• A 11.9% drop in total operating expenses quarter-over-quarter;

• A 13.1% rise in sales to independent customers;

• Cash cycle shortened by 9 days, which corresponds to a R$ 70 million decrease in working capital.

Highlights | Breakdown by Division – 1Q14

4

Specialties

1Q13 1Q14

138.9

16.5

14.6

1.5

146.3

17.6

14.8

2.1

Retail*

1Q13 1Q14

124.4

33.1

41.9

-9.3

155.8

47.3

47.8

0.1

Consolidated*

1Q13 1Q14

1,036.7

128.9

115.9

9.5

1,031.2

135.9

117.8

15.1

Pharmaceutical

Distribution

1Q13 1Q14

847.4

79.4

59.4

17.3

818.7

70.9

55.2

12.9

Gross Revenues

Gross Profit

SGA

Ebitda

(*) Pro-forma figures: 100% of revenues from Tamoio and Drogasmil / Farmalife (unaudited figures for 1Q13)

CONSOLIDATED PERFORMANCE

Consolidated Performance

6

Gross Revenues Evolution (R$ million)

1Q13 4Q13 1Q14

986.3 985.2 976.6

-0.5%

-1.0%

Pharmaceutical Distribution

Specialties

Retail

Sales growth by 13.1% in the

segments of independent clients and

by 29.2% in the OTC category in

comparison with 1Q13.

5.4% growth in revenues from the

Specialties division, with particular

mention to Prodiet’s sales increase

of nearly 18.7% to the private sector.

Year-over-year sales increases of

14.8% from Tamoio and of 45.5%

from Drogasmil / Farmalife.

50.4 56.2 54.6

1,036.7 1,041.4 1,031.2

Accounting Consolidated Gross Revenues

Pro-forma Consolidated Gross Revenues: 100% of revenues from

Tamoio and Drogasmil / Farmalife (unaudited figures for 1Q13)

Performance by Division


1Q13 4Q13 1Q14

847.4

816.4

818.7

0.3%

-3.4%

Specialties

1Q13 4Q13 1Q14

138.9

156.0 146.3

-6.2%

5.4%

Retail(*)

1Q13 4Q13 1Q14

42.0

25.3%

7

Gross Revenues Evolution (R$ million)

82.4

95.2 94.6

66.1

61.2

124.4

161.3 155.8

-3.4%

Accounting Gross Revenues

Pro-forma additional Gross

Revenues

(*) Pro-forma figures: 100% of revenues from Tamoio and Drogasmil / Farmalife (unaudited figures

for 1Q13)


8

1Q14 1Q13

95.8

4Q13

115.9 106.5

Pro-forma (*)

Gross Profit (R$ million and % Net Revenues)

16.6%

1Q14 1Q13

14.1%

128.9

4Q13

145.9

15.8%

135.9


11.2%

13.4% 12.6%


9

12.7%

1Q13

115.9

14.9%

4Q13

130.5

13.7%

1Q14

117.8

8.6%

1Q13

74.0

12.3%

4Q13

105.7

11.1%

1Q14

93.3

Operating Expenses – SG&A (R$ million and % Net Revenues)

Pro-forma (*)



10

1Q13

2.2%

18.8

4Q13

1.7%

14.8

1Q14

1.4%

11.9

-19.5%

-36.7%

1Q13

1.0%

9.5

4Q13

2.1%

18.3

1Q14

1.6%

15.1

-17.4%

58.8%

EBITDA and EBITDA Margin (R$ million and % Net Revenues)

Pro-forma (*)



11

1Q13

-0.6%

-5.6

4Q13

-0.3%

-2.9

1Q14

-1.4%

-11.9

1Q13

0.8%

6.9

4Q13

-0.5%

-4.6

1Q14

-1.6%

-13.5

Net Profit (R$ million and % Net Revenues)

Pro-forma (*)



Reduction of 6.9 days in the Cash Cycle.

Cash Flow

(R$ million)

* Average

(1) Average of Gross Revenues in the Quarter

(2) Average of COGS in the Quarter

(3) Average of COGS in the Quarter

1Q14 4Q13 1Q13

Cash Cycle - Days * 50.7 55.0 48.1

Accounts Receivable (1) 59.5 45.8 45.1

Inventories (2) 49.8 58.2 49.2

Accounts Payable (3) 58.5 49.0 46.2

Cash Cycle

(Days)

1Q14 1Q13 4Q13

Cash Flow Generated /

Used) in Operating Activities 81.0 (61.9) 7.9

Internal Cash Generatio 5.1 14.0 9.8

Operating Assets Variation 75.9 (75.8) (1.9)

Cash Flow (Used)

in Investing Activities (10.3) (1.1) (12.6)

Cash Flow Generated /

(Used) by Financing Activities (16.0) 132.3 6.7

Net Increase /

(Decrease) in Cash 54.7 69.4 2.0

12


13 Capex

1Q14

3.9

Others

1.1

Remodeling

of Stores

1.9

IT

0.1

Machinery and

Equipment

0.8

Acquisitions – Last 12-Months Period (R$ million)

Capex (R$ million)

12.2

80.4

98.9

275.5

Indebtedness: Net Debt and Net Debt / EBITDA

(R$ million)

1Q13

236.5

2.6X

4Q13

458.5

4.8x

1Q14

412.0

4.6x

275.5

136.5

Net Debt

Debt related to Acquisitions (last 12-months

period)

275.5

183.0

CSB

Investment

CSB

Debt Total Tamoio

Acquisition

Remaining

Acquisition

of Prodiet

74.0

PHARMACEUTICAL DISTRIBUTION


Financial Data (R$ million and % Net Revenues)

15

EBITDA Margin

(%)

1.8

1Q13 1Q14

2.4

Op. Exp. SG&A

(%)

7.9

1Q13 1Q14

8.1

Gross Margin

(%)

10.1

1Q13 1Q14

10.8

Gross Revenues

(R$ million)

818.7

1Q13 1Q14

847.4

Reduction in total operating

expenses in absolute terms, of

7.1% year-over-year and 11.9%

quarter-over-quarter;


OTC category over 1Q13;

Year-over-year growth by

18.1% in the Southern region;


segments of independent

clients;

Reduction of 9 days in the

Cash Cycle, representing

working capital savings in the

amount of R$ 70 million.

SPECIALTIES


17

1.6

1Q13 1Q14

1.2

11.3

1Q13 1Q14

11.9

13.4

1Q13 1Q14

13.5

146.3

1Q13 1Q14

138.9

Specialties

Sales growth by 5.4% in this

division, with highlights to

Prodiet reaching 18.7%;

Total operating expenses in

absolute terms fell by 25.3%

from 1Q13 and by 12.5% from

4Q13.

Strategic partnership with

AmerisourceBergen, resulting

in the creation of Profarma

Specialty;

Ebitda Margin

(%)

Op. Exp. SGA

(%)

Gross Margin

(%)

Gross Revenues

(R$ million)

RETAIL


19

5.1

1Q13 1Q14

2.8

25.9

1Q13 1Q14

25.7

31.1

1Q13 1Q14

28.5

94.6

1Q13 1Q14

82.4

Retail | Tamoio

Sales from Tamoio chain

stores rose by 14.8% year-

over-year;

Average monthly sales per

mature store grew by 9.1%,

from R$ 481,700 in 1Q13 to

R$ 525,500 in 1Q14;

EBITDA of R$ 4.9 million in

1Q14, with a 5.1% margin,

up 2.3 p.p. year-over-year;

Net income came to R$ 3.3

million in 1Q14, with a 3.5%

net margin.

Op. Exp. SGA

(%)

Gross Margin

(%)

Gross Revenues

(R$ million)

Ebitda Margin

(%)

1Q13

481.7

1Q14

525.5

4Q13

537.8

9.1%

1Q13

78.8

1Q14

88.1

4Q13

92.4

11.8%

1Q13

76.7

1Q14

84.8

4Q13

86.0

10.6%

Retail | Tamoio

-2.3% -1.4%

20

-4.6%

SSS Mature Stores (R$ million)

Monthly Average Store's Sales (R$ thousand)

Same Store Sales (R$ million)

1Q13

24.9

1Q14

26.1

4Q13

25.9

4.6%

0.9%

Retail | Tamoio

# of Stores (units)

1Q13

57

4Q13

59

1Q14

60

Average Ticket (in reais)

21

1 Opening

0 Close-downs

0 Reformulating

46 Mature

4Q13

vs.

1Q14

5.3%

1.7%


22

-7.8

1Q13 1Q14

-27.7

38.1

1Q13 1Q14

49.4

29.3

1Q13 1Q14

22.9

61.2

1Q13 1Q14

42.0

Retail | Drogasmil/Farmalife

Average monthly sales per

store climbed by 98.2%, from

R$ 164,300 in 1Q13 to

R$ 325,700 in 1Q14;

Gross margin rose by 6.4 p.p.,

from 22.9% in 1Q13 to 29.3% in

1Q14;

The SAP system was

implemented in February 2014;

Introduction of the ITEC

operational system in the

stores in February 2014;

Improvement of the negative

operating result by 58.6%,

changing from (R$ 11.6) million

to (R$ 4.8) million in 1Q14.

Ebitda Margin (%)

Op. Exp. SGA

(%)

Gross Margin

(%)

Gross Revenues

(R$ million)


SSS Mature Stores (R$ million)

Monthly Average Store's Sales (R$ thousand)

1Q14

325.7

4Q13

333.6

98.3%

164.3

1Q13 1Q13

11.9

1Q14

19.6

4Q13

20.5

65.2%

1Q13

11.6

1Q14

19.4

4Q13

20.3

66.7%

23

-4.4%

Same Store Sales (R$ million)

-4.4% -2.4%


24

1Q13

24.3

1Q14

30.1

4Q13

29.1

23.8%

1Q13

85

1Q14

63

4Q13

65

-25.9%

-3.1%

Average Ticket (in reais)

3.3%

# of Stores (units)

3 Openings

5 Close-downs

0 Reformulating

58 Mature

4Q13

vs.

1Q14

ANALYST COVERAGE

Analyst Coverage

26

Company Analyst Telephone E-mail

Banco Fator Pedro Ivo Barreto Zabeu +55 (11) 3049-9478 [email protected]

Brasil Plural Guilherme Assis +55 (11) 3206 8285 [email protected]

BTG Pactual João Carlos dos Santos +55 (11) 3383-2384 [email protected]

Credit Suisse Marcel Moraes +55 (11) 3841 6302 [email protected]

HSBC Luciano Campos +55 (11) 3371 8194 [email protected]

Itaú BBA Juliana Rozenbaum +55 (11) 3073 3040 [email protected]

Merrill Lynch Mauricio Fernandes +55 (11) 2188 4236 [email protected]

Morgan Stanley Javier Martinez de Olcoz +55 (11) 3048 6088 [email protected]

Votarantim Andre Parize +55 (11) 5171 5870 [email protected]

Max Fischer | CFO and IRO & Beatriz Diez | IR Manager

www.profarma.com.br/ir | Tel.: 55 (21) 4009-0276 | E-mail: [email protected]

apresentação en_1q14

Business