cpi brazil

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C O N F I D E N T I A L 7 S E P T E M B E R 2 0 1 0

C O N S U M E R P R O D U C T S I N D U S T R Y

Brazilian Consumer Products Industry

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B R A Z I L I A N C O N S U M E R P R O D U C T S I N D U S T R Y

Table of Contents

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I Brazilian Consumer Products Industry

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B R A Z I L I A N C O N S U M E R P R O D U C T S I N D U S T R Y I B R A Z I L I A N C O N S U M E R P R O D U C T S I N D U S T R Y

Brazilian Consumer Products Overview and Segments

sThe Consumer product industry generated a turnover of ~160.0 bn in 2008

sThe segments presenting the highest growth were domestic appliances (25%), clothing and shoes(16%), tobacco and beverages (15.5%) and pharmaceutical and cosmetic items (15%)

sThe consumer products industry can be divided into four groups

s Beverages: segregated in beer market, hot drinks market and soft drinks market

s Food: includes the retail sales of all food products, both packaged and unpackaged

s Household and personal care

Household products market consists of air fresheners, dishwashing products, general purposecleaners, textile washing products, toilet care products and others including bleach, furniture polish,insecticides and scouring products

Personal care includes fragrances market and make-up items market

s Consumer Electronics: includes audio visual equipment and games console products designedprimarily for domestic use

BRAZIL CONSUMER MARKET SEGMENTATION (% SHARE, BY VALUE, 2008)

Food

61.8%Bevarage

25.1%

Consumer

Electronics

4.5%Househuold &

Personal Care

8.7%

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Brazilian Consumer Products Market Drivers

s

The rise of Brazil retail market Over the years, many Brazilian companies have become morecompetitive and innovative in most segments with procurement and purchasing becoming moresophisticated, along with the rise of cost and pricing specialists

s Innovative sales promotions and services are backed by customer surveys and trend analysis andhelp enhance the typical Brazilian shopping experience

s Continued consolidation Many local consumer and retail companies have been turning to mergersand acquisitions (M&A) in order to capture economies of scale, fight off domestic and foreigncompetition as well as secure leadership positions within their segments

DATE INDUSTRY

ACQUIRER TARGET RESULT

Jun 09 ElectronicsRetail

Po de Acar(Largest localcompetitor toCarrefour, Wal-Mart)

70% ofPontoFrio

s Makes Po de Acar key segment leader, with1,200 stores and $15 bn in yearly revenues

Dec 09 ElectronicsRetail

Po de Acar CasasBahia

s Adds 500+ stores to Po de Acar, which isnow present in 337 cities in Brazil, with closeto $10 bn (2008) in sales, mainly in furnitureand electronics

May 10 ElectronicsRetail

Ricardo Eletroand Insinuante

MergerofRicardoEletroand

s Forms a 480-store player with $2.7 bn inannual sales

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Insinuante

Jun 10 Drugstores Drogaria SoPaulo Drogos

Makes Drogaria So Paulo the largestdrugstore chain in Brazil, with $1.5 bn inannual sales

Jun 10 ElectronicsRetail

Ricardo Eletroand Insinuante

City Lar s Adds 170 stores to the Ricardo Eletro andInsinuante group

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Brazilian Consumer Products Market Drivers

s

Impact of social media trends E-commerce in Brazil has been growing at ~ 30% per year since

2000, reaching close to $5 bn in 2009 even if broadband, at just slightly less than six percent, is notyet a reality for most people. Brazil also has one of the most well developed online banking systems inthe world

s In addition, the country occupies leading positions in terms of number of Internet users (63M or 35%of the population) and there is ample space for further growth

s The potential of the unbanked The banking industry took a major leap when second tier Itaacquired Brazils third largest bank, Unibanco, to become the countrys largest bank, overtaking theposition of market leader, Bradesco

s Both groups now plan on targeting the 49% of the population who are unbanked, either throughnew branches to be opened in remote areas of the country, or through partnerships with popularretail chains, who typically sell on credit and are thus already playing the role of a bank

s Greater credit card penetration Credit in Brazil accounts for nearly 40% of gross domesticproduct, far behind the 70% average of other emerging countries

s Over 50% of the population does not have a credit card

s Bradesco, in partnership with Banco do Brasil, will be launching a credit card in August 2010 thattargets lower SES level consumers

s Emphasis on being eco-friendly Brazilian consumers are more demanding than their Europeancounterparts in their concerns about the environment and how products are manufactured or disposedof

s Companies that fail to respect at least the basic environmental rules in the region are at risk of beingrejected by a good percentage of local customers

s An aging population Store sizes in Brazil have been shrinking, partly due to the aging population,as older shoppers prefer not to carry heavy shopping bags home

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s Life expectancy in Brazil increased from 69.5 years in 1998 to 72.7 years in 2008 Consumer

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A Brazilian Beverages Market

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AA Brazilian Beer Market

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B R A Z I L I A N C O N S U M E R P R O D U C T S I N D U S T R Y A A B R A Z I L I A N B E E R M A R K E T

Brazilian Beer Market Overview

sThe Brazilian beer market generated total revenues of $16.6 bn in 2008, representing a compoundannual growth rate (CAGR) of 2.2% for the period spanning 2004 - 2008

s In comparison, the US and Mexican markets grew with CAGRs of 1.3% and 2.3%, respectively, overthe same period, to reach respective values of $79 bn and $11.7 bn in 2008

s Standard lager sales proved the most lucrative for the Canadian beer market in 2008, generating totalrevenues of $14.4 bn, equivalent to 86.6% of the market's overall value

BRAZIL BEER MARKET VALUE (2004-2008) BRAZIL BEER MARKET VOLUME LITERS (2004-2008)

0

3

6

9

12

15

18

2004 2005 2006 2007 2008

1.95%

2.00%

2.05%

2.10%

2.15%

2.20%

2.25%

2.30%

2.35%

$ in billion % Growth

0

2,000

4,000

6,000

8,000

10,000

2004 2005 2006 2007 2008

1.05%

1.10%

1.15%

1.20%

1.25%

1.30%

Liters in million % Growth

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Brazilian Beer Market Overview

sThe Brazilian Beverages market comprises of five segments standard lager, premium lager, specialty

beer, low/no alcohol and Ales, stouts & bitters

s Premium lager accounts for a further 6.5% of the market's revenue

s In comparison, the US accounts for a further 67.1% of the market's value

s Brazil generates 14.2% of the Americas beer market's revenue

BRAZIL BEER MARKET SEGMENTATION% SHARE, BY VALUE, 2008

BRAZIL BEER MARKET GEOGRAPHIC SEGMENTATION% SHARE, BY VALUE, 2008

Standard lager86.7%

Premium lager

6.5%

Low/ no alcohol2.3%

Ales, stouts &bitters

1.4%Specialty beer

3.1%

US

67.1%

Brazil

14.2%

Canada

8.7%

Mexico

10.0%

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Brazilian Beer Market Future Outlook

sThe market's volume is expected to rise to 9.7 bn liters by the end of 2013, representing a CAGR of1.1% for the 2008 - 2013 Periods

sThe performance of the market is forecasted to decelerate slightly, with an anticipated CAGR of 2.1%for the five-year period 2008-2013, which is expected to drive the market to a value of $18.4 bn by theend of 2013

s Comparatively, the US States and Mexican markets will grow with CAGRs of 1% and 2%, respectively,over the same period, to reach respective values of $83 bn and $12.9 bn in 2013

BRAZIL BEER MARKET VALUE FORECAST (2008-2013)BRAZIL BEER MARKET VOLUME FORECAST LITERS (2008-

2013)

15.5

16.0

16.5

17.0

17.5

18.0

18.5

19.0

2008 2009 2010 2011 2012 2013

2.02%

2.03%

2.04%

2.05%2.06%

2.07%

2.08%

2.09%

2.10%

2.11%

2.12%


8,900

9,000

9,100

9,200

9,300

9,400

9,500

9,600

9,700

9,800

2008 2009 2010 2011 2012 2013

0.96%

0.98%

1.00%

1.02%

1.04%

1.06%

1.08%

1.10%

1.12%

1.14%

Liters in million % Growth

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Brazilian Beer Market Market Forces and Dynamics

s

The Brazilian beer market is concentrated and dominated by large multi-national breweries thatconcentrate on the production of mass-marketed lager and have access to large distribution channels

sThe Brazilian beer market will be analyzed by considering beer producers as players, with off-tradedistributors such as specialist retailers as buyers, since these distribute the largest single share of themarkets volume

sTraditionally, beer makers operated non-vertically-integrated businesses: buying hops fromindependent producers along with either barley from farmers for processing at the brewerys ownmalting house, or malted barley from third-party malting

s Barriers to entry, such as capital outlay on large-scale production plants and the need to establishreliable supplies from multiple third-party hop and barley growers is higher

s From the point of view of retailers or on-trade businesses, the switching costs are not high, the per-unitvolume prices may be higher such as for spirits or wine

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FORCES DRIVING COMPETITION IN THE BEER MARKET IN BRAZIL

0

1

2

3

4

5Buyer Power

Supplier Power

New EntrantsSubstitutes

Degree of Rivalry

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Brazilian Beer Market Key Players

BRAZIL BEER MARKET SHARE% SHARE, BY VALUE, 2008

Other

10%

Inbev

68%

Primo

Schincariol

13%

Cervejaria

Petrpolis

9%

KEY PLAYERS

COMPANY

FINANCIALS (2009)

DESCRIPTIONRevenue Net Income$1,919.5 $(113.1) s Engages in brewing and operates as subsidiary of AB

InBev

sManages a portfolio of nearly 300 brands

sThe Company owns a 50% share in Grupo Modelo439.0 NA sEngages in brewing

s The company has network of marketing productsmade with 11 distribution centers, about 200 dealershipsand several sales offices

478.2 NA s Engages in manufacturing and distribution of alcoholicdrinks

s Based in Petropolis, Brazil

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AB Brazilian Hot Drinks Market

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B R A Z I L I A N C O N S U M E R P R O D U C T S I N D U S T R Y A B B R A Z I L I A N H O T D R I N K S M A R K E T

Brazilian Hot Drinks Market Overview

sThe Brazilian hot drinks market generated total revenues of $4.7 bn in 2008, representing a CAGR of

5% for the period spanning 2004-2008

s In comparison, the US and Canadian markets grew with CAGRs of 0.5% and 2.3%, respectively, overthe same period, to reach respective values of $9.2 bn and $733.5M in 2008

s Market consumption volumes increased with a CAGR of 3.9% for the period 2004-2008, to reach a totalof 715.1M kilograms in 2008

s Coffee sales proved the most lucrative for the Brazilian hot drinks market in 2008, generating totalrevenues of $4.3 bn, equivalent to 91.6% of the market's overall value

s

In comparison, sales of tea generated revenues of $86.7M in 2008, equating to 1.8% of the market'saggregate revenues

BRAZIL HOT DRINKS MARKET VALUE (2004-2008) BRAZIL HOT DRINKS MARKET VOLUME LITERS (2004-2008)

0.0

0.5

1.0

1.5

2.0

2.5

3.0

3.5

4.0

4.5

5.0

2004 2005 2006 2007 2008

0.0%

1.0%

2.0%

3.0%

4.0%

5.0%

6.0%

7.0%

8.0%


0

100

200

300

400

500

600

700

800

2004 2005 2006 2007 2008

0.0%

1.0%

2.0%

3.0%

4.0%

5.0%

6.0%

7.0%

Kilograms in million % Growth

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Brazilian Hot Drinks Market Overview

s Coffee sales proved the most lucrative for the Brazilian hot drinks market, generating 91.6% of thetotal revenues

s In comparison, sales of other hot drinks generated 6.6% of the market's value

s Brazil generates 27.6% of the Americas hot drinks market's value

sThe US accounts for 53.5% of the regional market's value

BRAZIL HOT DRINKS MARKET SEGMENTATION% SHARE, BY VALUE, 2008

BRAZIL HOT DRINKS MARKET GEOGRAPHIC SEGMENTATION% SHARE, BY VALUE, 2008

Coffee

91.6%

Other hot drinks6.6%

Tea1.8%

Rest of Americas

10%

Canada

4%

Mexico

5%

Brazil28%

US

53%

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Brazilian Hot Drinks Market Future Outlook

sThe markets volume is expected to rise to 9.7 bn liters by the end of 2013, representing a CAGR of1.1% for the 2008-2013 periods

sThe performance of the market is forecasted to decelerate slightly, with an anticipated CAGR of 2.1%for the five-year period 2008-2013, which is expected to drive the market to a value of $18.4 bn by theend of 2013

s Comparatively, the US and Mexican markets will grow with CAGRs of 1% and 2%, respectively, overthe same period, to reach respective values of $83 bn and $12.9 bn in 2013

BRAZIL HOT DRINKS MARKET VALUE FORECAST (2008-2013)BRAZIL HOT DRINKS MARKET VOLUME FORECAST KILOGRAMS

(2008-2013)

4.2

4.4

4.6

4.8

5.0

5.2

5.4

5.6

5.8

2008 2009 2010 2011 2012 2013

0.0%

0.5%

1.0%

1.5%

2.0%

2.5%

3.0%

3.5%

4.0%

4.5%


660

680

700

720

740

760

780

800

820

2008 2009 2010 2011 2012 2013

2.20%

2.25%

2.30%

2.35%

2.40%

2.45%

2.50%

2.55%

2.60%

2.65%


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Brazilian Hot Drinks Market Market Forces andDynamics

sThe Brazilian hot drinks market is fragmented and has leading players such as Sara Lee, Strauss-Eliteand Mellitta

sThe hot drinks market is concentrated in terms of distribution channels, with the key distributionchannel being supermarkets/hypermarket (58.9%)

sThe low economic status of some of the countries within such regions, combined with the largenumber of independent growers and the relatively undifferentiated nature of the product, limits thesupplier power of growers

s Market entrants face barriers such as a launch of a price war by existing players, especially where a

new entrant moves into a more concentrated segments However, considering the high proportion of the population consuming hot drinks products, it is

unlikely that such substitution would substantially impact upon sales. Overall, the threat of substituteswithin the Brazilian hot drinks market is low

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FORCES DRIVING COMPETITION IN THE HOT DRINKS MARKET IN BRAZIL (2008)

0

1

2

3

4

5Buyer Power

Supplier Power

New EntrantsThreat of Substitutes

Degree of Rivalry

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Brazilian Hot Drinks Market Key Players

BRAZIL HOT DRINKS MARKET SHARE % SHARE, BY VALUE, 2008

Mellitla

6%

Strauss-Elite

13%

SaraLee

18%

Other

63%

KEY PLAYERSconsumers

s Brands include Ball Park, Douwe Egberts, HillshireFarm, Jimmy Dean, Kiwi, Sanex and Senseo

NA NA s Engages in manufacturing food & beverage

s Comprises of four core business units: Strauss Israel,

Strauss Coffee, Strauss North America and Strauss Water

1,634.7 NA s Engages manufacturing and distribution of commercialfilter coffee machines

s Cafina, is the Swiss subsidiary of the Company

s

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AC Brazilian Soft Drinks Market

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B R A Z I L I A N C O N S U M E R P R O D U C T S I N D U S T R Y A C B A Z I L I A N S O F T D R I N K S M A R K E T

Brazilian Soft Drinks Market Overview

sThe Brazilian soft drinks market generated total revenues of $18.6 bn in 2008, representing a CAGR of

2.1% for the period spanning 2004-2008

s In comparison, the US and Canadian markets grew with CAGRs of 2.1% and 0.6%, respectively, overthe same period, to reach respective values of $117.3 bn and $6.6 bn in 2008

s Market consumption volumes increased with a CAGR of 1.2% for the period 2004-2008, to reach a totalof 22.9 bn liters in 2008

s Carbonates sales proved the most lucrative for the Brazilian soft drinks market in 2008, generatingtotal revenues of $14.1 bn, equivalent to 76% of the market's overall value

s In comparison, sales of bottled water generated revenues of $3.6 bn in 2008, equating to 19.3% of

the market's aggregate revenues

BRAZIL SOFT DRINKS MARKET VALUE (2004-2008) BRAZIL SOFT DRINKS MARKET VOLUME LITERS (2004-2008)

0

2

4

6

8

10

12

14

16

18

20

2004 2005 2006 2007 2008

0.0%

0.5%

1.0%

1.5%

2.0%

2.5%

3.0%

$in billion % Growth

0

5

10

15

20

25

2004 2005 2006 2007 2008

0.0%

0.2%

0.4%

0.6%

0.8%

1.0%

1.2%

1.4%

1.6%

Liters in billion % Growth

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Brazilian Soft Drinks Market Overview

s Carbonates sales proved the most lucrative for the Brazilian soft drinks market, generating 76% of the

total value

s In comparison, sales of bottled water generated 19.3% of the market's value

s Brazil accounts for 10.8% of the Americas soft drinks market's value

sThe US leads the Americas soft drinks market, generating 68.1% of the market's value

BRAZIL SOFT DRINKS MARKET SEGMENTATION% SHARE, BY VALUE, 2008

BRAZIL SOFT DRINKS MARKET GEOGRAPHIC SEGMENTATION% SHARE, BY VALUE, 2008

Carbonates

76.0%

Bottled water

19.3%

RTD tea& coffee1.4%

Functional drinks

0.6%

Juices2.7%

Mexico

10%

Canada

4%

Rest of Americas

7%

Brazil

11%

US

68%

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Brazilian Soft Drinks Market Future Outlook

sThe market's volume is expected to rise to 24.6 bn liters by the end of 2013, representing a CAGR of1.4% for the 2008-2013 period

sThe performance of the market is forecasted to accelerate, with an anticipated CAGR of 2.8% for thefive-year period 2008-2013, which is expected to drive the market to a value of $21.3 bn by the end of2013

s Comparatively, the US and Canadian markets will grow with CAGRs of 2.4% and 0.8%, respectively,over the same period, to reach respective values of $131.8 bn and $6.9 bn in 2013

BRAZIL SOFT DRINKS MARKET VALUE FORECAST (2008-2013)

BRAZIL SOFT DRINKS MARKET VOLUME FORECAST LITERS

(2008-2013)

17.0

17.5

18.0

18.5

19.0

19.5

20.0

20.5

21.0

21.5

22.0

2008 2009 2010 2011 2012 2013

0.0%

0.5%

1.0%

1.5%

2.0%

2.5%

3.0%

3.5%

$in billion % Growth

22.0

22.5

23.0

23.5

24.0

24.5

25.0

2008 2009 2010 2011 2012

0.0%

0.2%

0.4%

0.6%

0.8%

1.0%

1.2%

1.4%

1.6%

1.8%

Liters in billion % Growth

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Brazilian Soft Drinks Market Market Forces andDynamics

sThe Brazilian soft drinks market is concentrated and has the presence of leading players like The Coca-Cola Company and PepsiCo

s Consumers in this market are likely to be strongly influenced by brand and this weakens buyer poweras retailers are forced to stock brands popular among consumers

sThe fast developing Brazilian soft drinks market is switching into low sugar and sodium products, whichrequires different production methods. Overall, supplier power is moderate in this market

s Difficult for a new entrant to compete with the brand strength and reach of existing players, it may bepossible to achieve small scale success stressing a unique production method or nutritional benefits

sThe substitutes for soft drinks primarily include traditional tea and coffee or homemade juices to namea few. Leading players tend to have diverse product offerings, which reduces the threat posed bysubstitutes

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FORCES DRIVING COMPETITION IN THE SOFT DRINKS MARKET IN BRAZIL (2008)

0

1

2

3

4

5Buyer Power

Supplier Power


Degree of Rivalry

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Brazilian Soft Drinks Market Key Players

BRAZIL PHARMACEUTICALS MARKET SHARE: % SHARE, BY VALUE (2009)

Other

28% The Coca-Cola

Company

30%

Cadbury Schw

eppes27%

PepsiCo

15%

KEY PLAYERSCOMPANY DESCRIPTIONM. Cap Revenue Income P/E

$132,932.6 $30,990.0 $6,824.0 19.6x s Engages in manufacturing, distribution andmarkets nonalcoholic beverage concentrates andsyrupss The Company sells finished beverage productsthrough distributors and beverage concentratesand syrups to bottling and canning operators,distributors, fountain wholesalers

12,008.5 5,975.0 509.0 43.0x s Engages in the confectionary businesss As on February 2010, the Company was acquired

by Kraft Foods104,317.5 43,232.0 5,946.0 17.4x s Engages in manufacturing, marketing and selling

various foods, snacks and carbonated and non-carbonated beveragess The Company operates in four divisions:Americas Foods, Americas Beverages, PepsiCoEurope and PepsiCo Asia, Middle east and Africa

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B Brazilian Food Retail Market

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B R A Z I L I A N C O N S U M E R P R O D U C T S I N D U S T R Y B B R A Z I L I A N F O O D R E T A I L M A RK E T

Brazilian Food Retail Market Overview

sThe Brazilian industry generated total revenues of $98.3 bn in 2008, representing a compound annual

growth rate (CAGR) of 22.4% for the period spanning 2004-2008

s In comparison, the US and Canadian industries grew with CAGRs of 5.8% and 4.3% respectively, overthe same period, to reach respective values of $824,422.2M and $82,037.9M in 2008

s Sales made through convenience store and gas station proved the most lucrative for the Brazilianindustry in 2008, generating total revenues of $38,278.5M, equivalent to 38.9% of the industry'soverall value

s In comparison, sales via hypermarkets, supermarkets and discounters generated revenues of$35,752.4M in 2008, equating to 36.4% of the industry's aggregate revenues

BRAZIL FOOD RETAIL INDUSTRY VALUE (2004-2008)

0.0

20.0

40.0

60.0

80.0

100.0

$120.0

2004 2005 2006 2007 2008

0.0%

9.0%

18.0%

27.0%

36.0%

45.0%


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Brazilian Food Retail Market Overview

sThe Brazilian Food Retail market comprises of six segments

s Convenience Stores and Gas Stationss Hypermarket, Supermarket and Discounters

s Food and Drinks Specialists

s Cash and Carries and Warehouse Clubs

s Drug Stores and Health and Beauty Stores (inc Pharmacies)

s Other

BRAZIL FOOD RETAIL INDUSTRY SEGMENTATION BRAZIL FOOD RETAIL INDUSTRY GEOGRAPHIC SEGMENTATION

Convenience

Stores and Gas

Stations

38.9%

Hypermarket,

Supermarket, and

Discounters

36.4%

Cash and Carriesand Warehouse

Clubs

0.6%

Drug and Health &

Beauty Stores

0.2% Other

0.5%

Food and Drinks

Specialists

23.4%

US

65.6%

Mexico12.6%

Rest of the Americas

7.5%

Canada

6.5%

Brazil

7.8%

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Brazilian Food Retail Future Outlook

s In 2013, the Brazilian food retail industry is forecast to have a value of $160.3 bn, an increase of 63%

since 2008

sThe compound annual growth rate of the industry in the period 2008-2013 is predicted to be 10.3%,which is expected to drive the industry to a value of $160,306.8M by the end of 2013

s Comparatively, the US and Canadian industries will both grow with CAGR of 2.7% over the sameperiod, to reach respective values of $942,140.4M and $93,846.5M in 2013

s French and German industries will grow with CAGRs of 2.1% and 1.5% respectively, over the sameperiod, to reach respective values of $257,395.2M and $262,328.7M in 2013

sThe performance of the industry is forecasted to decelerate, with an anticipated CAGR of 19.3% for thefive-year period 2008-2013, which is expected to drive the industry to a value of $493,116.7M by theend of 2013

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BRAZIL FOOD RETAIL INDUSTRY VALUE FORECAST (2008-2013)

0.0

30.0

60.0

90.0

120.0

150.0

$180.0

2008 2009 2010 2011 2012 2013

0.0%

2.0%

4.0%

6.0%

8.0%

10.0%

12.0%

14.0%

16.0%


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Brazilian Food Retail Market Forces and Dynamics

s Wal-Mart Stores, Companhia Brasiliera de Distribuicao and Carrefour S.A., the market leaders in theBrazilian food retail market

s Retailers range widely in size with large chain supermarkets or hypermarkets embodying far strongerforces than smaller specialty, luxury or organic food outlets whose grip on the industry is significantbut currently limited

s Suppliers to the food retail industry include food manufacturers, farmers and agricultural co-operatives. In order to ensure stability and offset the dangers of local sourcing problems or pricefluctuations, large retail companies often maintain relationships with a wide range of suppliers

s Large-scale, established retailers hold a natural advantage in operating businesses that benefitsignificantly from economies of scale, allowing aggressive pricing schemes that are not viable for

smaller retailers

sThe chief alternative to food retail is food service. Supported by strong marketing campaigns in thecase of fast food companies and cultural traditions with respect to sit-down restaurants, both typesrepresent a relevant alternative for many consumers

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FORCES DRIVING COMPETITION IN THE FOOD RETAIL INDUSTRY IN BRAZIL (2008)

0

1

2

3

4

5Buyer Power

Supplier Power


Degree of Rivalry

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Brazilian Food Retail Market Key Players

KEY PLAYERS

COMPANY

FINANCIALS (2009)

DESCRIPTIONM. Cap RevenueNet

Income P/E

$189,245.9 $408,214.0

$14,335.0 13.3x s Operates retail stores in various formats

s Segment includes various formats of retail storesand restaurants, including supermarkets,combination discount and grocery stores, supercenters, Sams Clubs, hypermarkets, cash-n-carrystores, department stores and generalmerchandise stores

s At the end of January 2010, the Companyoperated 971 discount stores, 2,447 super centers,591 Sam's Clubs and 132 Neighborhood Markets inthe US

s Also operates various international markets aswell, these include the UK, Canada, Japan, Mexico,Brazil and China

5667 13,447 342 26.8x s Operates as a retailer and wholesaler of foodproducts, bazaar articles, clothing, homeappliances and other products through its chain ofhypermarkets, supermarkets, specialized anddepartment stores, convenience stores and theInternet in Brazil

s As of December 2009, the Company operates 57,353 located in the Brazilian state of Sao Paulo

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C Brazilian Household & Personal Care Market

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CA Brazilian Household Market

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B R A Z I L I A N C O N S U M E R P R O D U C T S I N D U S T R Y C A B R A Z I L I A N H O U S E H O L D M A R K E T

Brazilian Household Market Overview

sThe Brazilian household products market grew by 7.7% in 2008 to reach a value of $4.6 bn

sThe market represented a CAGR of 8.9% for the period spanning 2004-2008s In comparison, the US and Mexican markets grew with CAGRs of 0.7% and 5.8%, respectively, over

the same period, to reach respective values of $17.2 bn and $3.1 bn in 2008

sTextile washing products sales dominated the Brazilian household products market in 2008, generating59.8% of the market's overall revenues

s Brazil accounts for 15.9% of the Americas household products market's value

s Unilever accounts for 39.8% of the Brazilian household products market's value

s Supermarkets and hypermarkets leads the Brazilian household products market distributing 66.3% of

the market's overall value

BRAZIL HOUSEHOLD PRODUCTS MARKET VALUE(2004-2008)

BRAZIL HOUSEHOLD PRODUCTS DISTRIBUTION(% SHARE, BY VALUE, 2008)

CREAET GRAPH

0.0

1.0

2.0

3.0

4.0

$5.0

2004 2005 2006 2007 2008

0%

3%

6%

9%

12%


Supermarkets/

hypermarkets

66%

Independent

Retailers29%

Convenience

Stores

2%

Other

3%

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Brazilian Household Market Market Segments

sTextile washing products sales proved the most important for the Brazilian household products market

in 2008, generating total revenues of $2.7 bn, equivalent to 59.8% of the market's overall value

s In comparison, sales of general-purpose cleaners generated revenues of $607M in 2008, equating to13.2% of the market's aggregate revenues.

sThe market represented a CAGR of 8.9% for the period spanning 2004-2008

BRAZIL HOUSEHOLD PRODUCTS MARKET SEGMENTATION(% SHARE, BY VALUE, 2008)

BRAZIL HOUSEHOLD PRODUCTS GEOGRAPHIC SEGMENTATION(% SHARE, BY VALUE, 2008)

Textile washing

products

60%

Other

16%

Toilet care

3%

Air fresheners

1%

Dishwashing

products

7%

General purpose

cleaners

13%

US

60%

Canada

6%

Rest of Americas

7%

Mexico

11%

Brazil

16%

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Brazilian Household Market Future Outlook

sThe performance of the market is forecast to decelerate, with an anticipated CAGR of 6.9% for the five-

year period 2008-2013, which is expected to lead the market to a value of $6.4 bn by the end of 2013

s Comparatively, the US and Mexican markets will grow with CAGRs of 1% and 5.3%, respectively, overthe same period, to reach respective values of $18.1 bn and $3.9 bn in 2013

BRAZIL HOUSEHOLD PRODUCTS MARKET VALUE FORECAST (2008-2013)

0.0

1.0

2.0

3.0

4.0

5.0

6.0

$7.0

2008 2009 2010 2011 2012 2013

0%

2%

4%

6%

8%

10%

$ in billion % GrowthCAGR 20082013: 6.9%

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Brazilian Household Market Market Forces andDynamics

s Unilever, Reckitt Benckiser and S.C. Johnson & Son are the market leaders in the household productsmarket, with 56.6% of the market value

s Supermarkets and hypermarkets are the main buyers in the Brazilian market and the larger chainsmay exert strong buyer power

s Manufacturers of household products are able to source some of their raw materials from only arelatively small number of suppliers boosts supplier power

sThe existence of strong brands and the scale economies associated with the high volume productionfacilities prevent the threat of new entrants from becoming a significant factor

s High exit barriers and fixed costs tend to increase rivalry between manufacturers. In general, theintensity of competition in the global household products market is assessed as moderate

FORCES DRIVING COMPETITION IN THE HOUSEHOLD PRODUCTS MARKET IN BRAZIL (2008)

0

1

2

3

4

5Buyer Pow er

Supplier Pow er


Degree of Rivalry

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Brazilian Household Market Key Players

BRAZIL HOUSEHOLD MARKET SHARE: % SHARE, BY VALUE, 2009

Unilever

40%

Reckitt

Benckiser Pic

9%

S.C. Johnson &

Son

8%

Other

43%

KEY PLAYERS

COMPANY

FINANCIALS (2009)

DESCRIPTIONM. CapReven

ueNet

Income P/E

$75,180 $50,611 $4,283 18.0xs Manufactures and markets consumer goods in thefood, personal and homecare segmentss Operates through two parent companies: Unilever NVand Unilever plcs Operates through subsidiaries in Germany,Switzerland, France, the UK, the US and China and has

operations in over 150 countries

37,261

11,866

2,170 17.2x s Manufactures and distributes household cleaning andpersonal care productss Operates through eight business segments: fabriccare, surface care, health and personal care, homecare, dishwashing, pharmaceutical, foodand otherhouseholds Products are sold in 180 countries worldwide

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NA NA NA NA sFocuses on development, manufacturing and

marketing of home storage, air care, auto care, shavecare and insect controls Operates manufacturing facilities in Argentina,Canada, China, the Netherlands, Mexico, the UK, the US

and other countries

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CB Brazilian Personal Care Market

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B R A Z I L I A N C O N S U M E R P R O D U C T S I N D U S T R Y C B B R A Z I L I A N P E R S O N A L C A R E M A R K E T

Brazilian Personal Care Market Overview Fragrances

sThe Brazilian fragrances market generated total revenues of $3.6 bn in 2008, representing a

compound annual growth rate (CAGR) of 16% for the period spanning 2004-2008sThe Brazilian fragrances market has posted steadily decreasing growth rates since 2004

sThis trend is expected to continue towards 2011 when the market is expected to stabilize with agrowth rate of 12.4%

s Market consumption volumes increased with a CAGR of 14.6% between 2004-2008, to reach a total of169.9M units in 2008

s Female fragrances sales proved the most lucrative for the Brazilian fragrances market in 2008,generating total revenues of $2.2 bn, equivalent to 59.9% of the market's overall value

s Natura Cosmeticos dominates the Brazilian fragrances market with a 21.4% share of the overall value

s Boticario is the second biggest company, with 19.5% of the market's revenues

BRAZIL FRAGRANCES MARKET VALUE (2004-2008) BRAZIL FRAGRANCES MARKET VOLUME (2004-2008)

CREAET GRAPH

0.0

0.5

1.0

1.52.0

2.5

3.0

3.5

4.0

2004 2005 2006 2007 2008

0%

5%

10%

15%

20%

$ in billions % Growth

0.0

20.0

40.0

60.080.0

100.0

120.0

140.0

160.0

180.0

2004 2005 2006 2007 2008

0%

2%

4%

6%8%

10%

12%

14%

16%

18%

Units in millions % Growth

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Brazilian Personal Care Market Segments Fragrances

s Female fragrances generate the largest share of the Brazilian fragrances market accounting for 59.6%

of the revenues

s In comparison, male fragrances account for a further 35% of the market's value

BRAZIL FRAGRANCES MARKET SEGMENTATION(% SHARE, BY VALUE, 2008)

BRAZIL FRAGRANCES GEOGRAPHIC SEGMENTATION(% SHARE, BY VALUE, 2008)

Female fragrances59.9%

Male fragrances35.0%

Unisex fragrances5.1%

US

53.8%Brazil

34.1%

Mexico

5.9%Canada

6.2%

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Brazilian Personal Care Market Future Outlook Fragrances

sThe performance of the market is forecasted to decelerate, with an anticipated CAGR of 12.7% for thefive-year period 2008-2013, which is expected to drive the market to a value of $6.6 bn by the end of2013

s Comparatively, the US and Canadian markets will grow with CAGRs of 0.4% and 3.2%, respectively,over the same period, to reach respective values of $5.8 bn and $767.7M in 2013

BRAZIL FRAGRANCES MARKET VALUE FORECAST (2008-2013)

BRAZIL FRAGRANCES MARKET VOLUME (2008-2013)

CAGR2008-

2013:12.

0.0

1.0

2.0

3.0

4.0

5.0

6.0

7.0

2008 2009 2010 2011 2012

11.0%

11.5%

12.0%

12.5%

13.0%

13.5%

14.0%

14.5%


CAGR2008

-2013:1

0

50

100

150

200

250

300

350

2008 2009 2010 2011 201210.5%

11.0%

11.5%

12.0%

12.5%

13.0%

13.5%

14.0%


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Brazilian Personal Care Market Forces and Dynamics Fragrances

sThe major manufacturers tend to advertise to consumers in order to build brand loyaltysThis reduces buyer power, as most retailers must stock popular brands in order to maintain their own

sales volumes, with little option for alternativess However, retailers often occupy a strong position in the supply chain, which allows them to negotiate

favorable contracts with manufacturers, thereby enhancing buyer powersThe quality of many of the raw materials is highly important, hence Chemicals used in these products

must be of a standard suitable for manufacturing consumer products and for some ingredients thereare no substitutes, increasing supplier powers A small number of brands, some globally recognized, have a strong position in this market

s

The major companies are large firms whose economies of scale allow them to compete moreeffectively on price and invest in their own businesss Companies entering the market may find it difficult to compete

s Leading players are often either large manufacturers of personal care products or large fashion houses

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FORCES DRIVING COMPETITION IN THE FRAGRANCES PRODUCTS MARKET IN BRAZIL (2008)

0

1

2

3

45

Buyer Power

Supplier Power


Degree of Rivalry

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shampoos

13,057 10,383 626 21.0x s Manufactures and markets beauty and relatedproducts

s Markets its products through direct selling andindependent representatives, as well as throughdistributorships

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Brazilian Personal Care Market Overview Haircare

sThe Brazilian hair care market generated total revenues of $3.0 bn in 2008, representing a compound

annual growth rate (CAGR) of 9% for the period spanning 2004-2008s In comparison, the US and Canadian markets grew with CAGRs of 2.5% and 3.7%, respectively, over

the same period, to reach respective values of $7.4 bn and $1.2 bn in 2008

s Market consumption volumes increased with a CAGR of 6.8% during 2004-2008, to reach a total of594.9M units in 2008

s Shampoo sales proved the most lucrative for the Brazilian hair care market in 2008, generating totalrevenues of $1.2 bn, equivalent to 38.5% of the market's overall value

s In comparison, sales of hair colorants generated revenues of $840.9M in 2008, equating to 27.9% ofthe market's aggregate revenues

BRAZIL HAIRCARE MARKET VALUE (2004-2008) BRAZIL HAIRCARE MARKET VOLUME (2004-2008)

CAGR2004-

2008:9.

0.0

0.5

1.0

1.5

2.0

2.5

3.0

3.5

2004 2005 2006 2007 2008

0.0%

2.0%

4.0%

6.0%

8.0%

10.0%

12.0%


CREAET GRAPH

CAGR2004-

2008:6.

0

100200

300

400

500

600

700

2004 2005 2006 2007 2008

5.8%

6.0%

6.2%

6.4%

6.6%

6.8%

7.0%

7.2%

7.4%

7.6%


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Brazilian Personal Care Market Segments Hair Care

s Hair care segment is further subdivided into shampoo, hair colorants, conditioner, styling agents and

perms and relaxess Shampoo sales generated 38.5% of the Brazilian hair care market's overall revenue

s In comparison, sales of hair colorants generated 27.9% of the market's aggregate revenues

BRAZIL HAIRCARE MARKET SEGMENTATION(% SHARE, BY VALUE, 2008)

BRAZIL HAIRCARE GEOGRAPHIC SEGMENTATION% SHARE, BY VALUE, 2008

Shampoo

38.5%

Hair colorants

27.9%

Styling agents

8.3%

Perms & relaxers

1.0%

Conditioner

24.3%

US

53.1%

Brazil

21.6%

Canada

8.6%

Rest of Americas

6.4%

Mexico

10.3%

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Brazilian Personal Care Market Future Outlook HairCare

sThe performance of the market is forecasted to decelerate, with an anticipated CAGR of 7.5% for thefive-year period 2008-2013, which is expected to lead the market to a value of $4.3 bn by the end of2013

s Comparatively, the US and Canadian markets will grow with CAGRs of 1% and 2.9%, respectively,over the same period, to reach respective values of $7.8 bn and $1.4 bn in 2013

sThe market's volume is expected to rise to 804.9M units by the end of 2013, representing a CAGR of6.2% for the 2008-2013 period

BRAZIL HAIRCARE MARKET VALUE (2008-2013) BRAZIL HAIRCARE MARKET VOLUME (2008-2013)

CAGR2008-

2013:7.

0.0

1.0

2.0

3.0

4.0

5.0

2008 2009 2010 2011 2012 2013

6.6%

6.8%

7.0%

7.2%

7.4%

7.6%

7.8%

8.0%

8.2%

8.4%


CAGR2008

-2013:6.

0

100

200

300

400

500

600

700

800

900

2008 2009 2010 2011 2012 2013

5.8%

5.9%

6.0%

6.1%

6.2%

6.3%

6.4%

6.5%

6.6%

6.7%


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Brazilian Personal Care Market Forces and Dynamics Hair Care

sThe Brazilian hair care market is fairly fragmented with many small players, with their scaleeconomies, investment in product development and brand identity make them formidable incumbentsfor prospective new entrants to challenge

s Manufacturers of surfactants are the main suppliers to the industry and supplier power is moderate inthe market

s High growth in the Brazilian market reduces the rivalry between players, who offer a broadlydiversified portfolio of personal care segment products which reduces dependence on hair careproducts alone

sThis wide range of available products with an accompanying variance in quality and price means thatbuyer power is prevented from becoming disproportionately strong in this market

s Substitutes to the market are other home made hair products and substitute power is weak

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FORCES DRIVING COMPETITION IN THE HAIRCARE MARKET IN BRAZIL (2008)

0

1

2

3

4

5Buyer Power

Supplier Power


Degree of Rivalry

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Brazilian Personal Care Market Key Players Hair Care

BRAZIL HAIRCARE MARKET SHARE: % SHARE, BY VALUE, 2008

L'Oreal19.5%

Unilever

14.6%

Other

52.0%

P&G

13.9%

KEY PLAYERS

COMPANY

FINANCIALS (2009)


ueNet

Income P/E

$61,834 $22,497 $2,308 26.7x s Provide various cosmetics products for men andwomen

s Operations in Europe, North America, Latin America,Africa, the Middle East, east Asia and the South Pacific

76,168

51,275

4,339.1 18.0x s Provides fast-moving consumer goods in Asia, Africa,Europe and Latin Americas Sells products directly, as well as throughindependent brokers, agents and distributors to chain,wholesale, co-operative and independent groceryaccounts, food service distributors and institutions

171,070 76,694 13,436 17.8x sProvides consumer packaged goods in the US and

internationallys Also offers baby care and family care products,including baby wipes, bath tissues, diapers, facial

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tissues and paper towels under the Bounty, Charminand Pampers brands

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Brazilian Personal Care Market Overview Make-up

sThe Brazilian make-up market generated total revenues of $1.0 bn in 2007, representing a CAGR of

12.5% for the period spanning 2003-2007s In comparison, the US and Mexican markets grew with CAGRs of 3.3% and 5.1%, respectively, over

the same period, to reach respective values of $6 bn and $496.3M in 2007

s Market consumption volumes increased with a CAGR of 8.6% between 2003-2007, to reach a total of200.4M units in 2007

s Lip make-up sales proved the most lucrative for the Brazilian make-up market in 2007, generatingtotal revenues of $344.7M, equivalent to 33.4% of the market's overall value

s In comparison, sales of nail make-up generated revenues of $303.6M in 2007, equating to 29.4% ofthe market's aggregate revenues

BRAZIL MAKE-UP MARKET VALUE (2003-2007) BRAZIL MAKE-UP MARKET VOLUME (2003-2007)

CAGR2003-2

007:12.

0

200

400

600

800

1000

1200

2003 2004 2005 2006 2007

0.0%

2.0%4.0%

6.0%

8.0%

10.0%

12.0%

14.0%

16.0%


CAGR2003-

2007:8.

0

50

100

150

200

250

2003 2004 2005 2006 2007

7.0%

7.5%

8.0%

8.5%

9.0%

9.5%

10.0%


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Brazilian Personal Care Market Segments Make-up

s Make-up segment is further subdivided into Lip make-up, Nail make-up, Eye make-up and face make-

ups Brazil generates 12.1% of the Americas make-up market's revenue

s In comparison, the US accounts for a further 69.7% of the market's value

BRAZIL MAKE-UP MARKET SEGMENTATION(% SHARE, BY VALUE, 2007)

BRAZIL MAKE-UP GEOGRAPHIC SEGMENTATION(% SHARE, BY VALUE, 2007)

Lip make-up33%

Face make-up

15%

Eye make-up

23%

Nail make-up29%

US

70%

Mexico

6%

Brazil

12%

Canada

12%

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Brazilian Personal Care Market Future Outlook Make-Up

sThe performance of the market is forecasted to decelerate, with an anticipated CAGR of 8.4% for thefive-year period 2007-2012, which is expected to drive the market to a value of $1.5 bn by the end of2012

s Comparatively, the US and Mexican markets will grow with CAGRs of 3.3% and 4.6%, respectively,over the same period, to reach respective values of $7 bn and $620.4M in 2012

sThe market's volume is expected to rise to 279.7M units by the end of 2012, representing a CAGR of6.9% for the 2007-2012 periods

BRAZIL MAKE-UP MARKET VALUE FORECAST (2007-2012) BRAZIL MAKE-UP MARKET VOLUME FORECAST (2003-2007)

CAGR2007

-2012:8.

0

200

400

600

800

1,000

1,200

1,400

1,600

1,800

2007 2008 2009 2010 2011 2012

0.0%

2.0%

4.0%

6.0%

8.0%

10.0%

12.0%


CAGR2007-

2012:6.

0

50

100

150

200

250

300

2007 2008 2009 2010 2011 2012

0%

1%

2%

3%

4%

5%

6%

7%

8%

9%

Units in million % Growth

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Brazilian Personal Care Market Forces and DynamicsMake-Up

s Strong brands from the major players reduce buyer power, as most retailers must stock popularbrands in order to maintain their own sales volumes, with little option for alternatives

sThe major companies are large firms whose scale economies allow them to compete more effectivelyon price and invest in their own business; companies entering the market may find it difficult tocompete

s Many of the leading players tend to offer a diverse ranges of cosmetic and personal care products inaddition to their range of make-up products

sThis diversification defends their performance against competition pressures in any one market

s Fixed costs are high in this market, as most companies own large production facilities and the need todivest such assets on exiting the market constitutes an exit barrier and therefore a driver of rivalry

FORCES DRIVING COMPETITION IN THE MAKE-UP MARKET IN BRAZIL (2007)

0

12

3

4

5Buyer Power

Supplier Power


Degree of Rivalry

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Brazilian Personal Care Market Key Players Make-Up

BRAZIL MAKE-UP MARKET SHARE: % SHARE, BY VALUE, 2007

NaturaCosmeticos

11.2%

L'Oreal

13.4%

Other

60.9%

Avon Products14.5%

KEY PLAYERS

COMPANY

FINANCIALS (2009)


ueNet

Income P/E

$13,057 $10,383 $626 21.0x s Manufactures and markets beauty and relatedproducts

s Markets its products through direct selling andindependent representatives, as well as through

distributorships61,834 22,497 2,308 26.7x s Provide various cosmetics products for men and

women

s Operations in Europe, North America, Latin America,Africa, the Middle East, east Asiaand the South Pacific

10,694 2,457 396 27.0x s Engages in the development, production, distributionand sale of cosmetics, fragrances and hygiene productsin Brazil, Argentina, Chile, Peru, Mexico, France,Venezuela and Colombia

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s Also offers skin treatment products, cosmetics andfragrances under the Faces de Natura brand, daily useproducts under the Tododia brand and products forbabies and under the Mame e Beb brand

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Brazilian Personal Care Market Overview Hygiene

sThe Brazilian personal hygiene market generated total revenues of $1.5 bn in 2007, representing a

compound annual growth rate (CAGR) of 1.2% for the period spanning 2003-2007s In comparison, the US and Canadian markets grew with CAGRs of 0.5% and 3.8%, respectively, over

the same period, to reach respective values of $4.4 bn and $850.6M in 2007

s Deodorant sales proved the most lucrative for the Brazilian personal hygiene market in 2007,generating total revenues of $805.3M, equivalent to 55.4% of the market's overall value

s In comparison, sales of soap generated revenues of $549.8M in 2007, equating to 37.8% of themarket's aggregate revenues

BRAZIL PERSONAL HYGIENE MARKET VALUE (2003-2007) BRAZIL PERSONAL HYGIENE MARKET VOLUME (2004-2008)

CAGR2003-2007

:1.

0

200

400

600

800

1,000

1,200

1,400

1,600

2003 2004 2005 2006 20070.0%

0.2%

0.4%

0.6%

0.8%

1.0%

1.2%

1.4%

1.6%

1.8%

$ in million % GrowthCAGR20

03-2007:0.

0

100

200

300

400

500

600

700

800

900

1,000

2003 2004 2005 2006 2007-0.6%

-0.4%

-0.2%

0.0%

0.2%

0.4%

0.6%

0.8%

1.0%

1.2%


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Brazilian Personal Care Market Segments Hygiene

s Deodorants dominate the Brazilian personal hygiene market with 55.4% of the market's value

s Soap accounts for a further 37.8% of the market's revenue

s Brazil accounts for 20% of the Americas personal hygiene market's value

s In comparison, the US accounts for a further 60.7% of the market's revenue

BRAZIL PERSONAL HYGIENE MARKET SEGMENTATION(% SHARE, BY VALUE, 2007)

BRAZIL PERSONAL HYGIENE GEOGRAPHIC SEGMENTATION(% SHARE, BY VALUE, 2007)

Deodorants

55%

Bath & shower

products

7%

Soap

38%

US

60%

Mexico

8%

Canada

12%

Brazil

20%

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Brazilian Personal Care Market Future Outlook Hygiene

s

Market consumption volumes increased with a CAGR of 0.5% between 2003-2007, to reach a total of902.8M units in 2007

sThe market's volume is expected to rise to 956M units by the end of 2012, representing a CAGR of1.2% for the 2007-2012 periods

sThe performance of the market is forecasted to accelerate, with an anticipated CAGR of 1.7% for thefive-year period 2007-2012, which is expected to drive the market to a value of $1.6 bn by the end of2012

s Comparatively, the US and Canadian markets will grow with CAGRs of 0.4% and 3.5%, respectively,

over the same period, to reach respective values of $4.5 bn and $1 bn in 2012

BRAZIL PERSONAL HYGIENE MARKET VALUE FORECAST (2007-2012)

BRAZIL PERSONAL HYGIENE MARKET VOLUME FORECAST(2007-2012)

CAGR2007-20

12:1.

1,350

1,400

1,450

1,500

1,550

1,600

2007 2008 2009 2010 2011 2012

0.0%

0.2%

0.4%

0.6%

0.8%

1.0%1.2%

1.4%

1.6%

1.8%

2.0%

$ in million % Growth

CAGR2

007-201

2:1.

870

880

890

900

910

920

930

940

950

960

2007 2008 2009 2010 2011

0.90%

0.95%

1.00%

1.05%

1.10%

1.15%

1.20%

1.25%


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Brazilian Personal Care Market Forces and DynamicsHygiene

sThe Brazilian personal hygiene market will be analyzed taking market players as manufacturers andbuyers as the distributors of personal hygiene products such as retailers

s Retailers often occupy a position of power in the supply chain which allows them to negotiatefavorable contracts with manufacturers, this enhances buyer power

sThe makers of tapes, closures, films, back sheet and top sheet material, super absorbent polymers,elastics and the many other components of a typical hygiene product are constantly trying to balanceinnovation with cost effectiveness while looking for new areas, both from a regional and marketperspective to grow their products

sThe Brazilian market has grown relatively slowly in recent years, making it less attractive to newentrants. However, rising incomes are leading to a change in attitudes and personal hygiene productsare being seen as essential items rather than a luxury

s Retailers are considered as buyers in this market, consumer choice will have a significant pull,consumers opt for the substitutes, retailers will not buy so much from the manufacturers

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FORCES DRIVING COMPETITION IN THE PERSONAL HYGIENE PRODUCTS MARKET IN BRAZIL (2007)

0

1

2

34

5Buyer Power

Supplier Power


Degree of Rivalry

55

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Brazilian Personal Care Market Key Players Hygiene

BRAZIL PERSONAL HYGIENE MARKET SHARE: % SHARE, BY VALUE, 2007

Other

38.2%

Colgate-Palmolive

9.2%

Johnson & Johnson6.0%

Unilever

46.7%

KEY PLAYERS

COMPANY

FINANCIALS (2009)


ueNet

Income P/E

$76,168

$51,275

$4,339.1 18.0x s Provides fast-moving consumer goods in Asia, Africa,Europe and Latin Americas Sells products directly, as well as through

independent brokers, agents and distributors to chain,wholesale, co-operative and independent groceryaccounts, food service distributors and institutions

36,377

15,327

2,291 17.1x

s Engages in manufacturing and marketing consumerproducts worldwides The company markets its pet foods through petsupply retailers and veterinarians for everydaynutritional needs under Science Diet name

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162,319 61,897 12,266 13.4x sEngages in the manufacture of health care products

and provides health care related services for theconsumer, pharmaceutical and medical devices anddiagnostics markets

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D Brazilian Consumer Electronics Industry

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B R A Z I L I A N C O N S U M E R P R O D U C T S I N D U S T R Y B R A Z I L I A N C O N S U M E R E L E C T R O N I C S I N D U S T R Y O V E R V I E W

Consumer Electronics Market Overview

sThe Brazilian consumer electronics market generated total revenues of $7.1 bn in 2008, representing a

CAGR of 4.8% for the period spanning 2004-2008s Electrical and electronics retailers sales proved the most lucrative for the Brazilian consumer

electronics market in 2008, generating total revenues of $2,944.1M, equivalent to 41.3% of themarket's overall value

sThe performance of the market is forecast to decelerate, with an anticipated CAGR of 3.6% for the five-year period 2008 - 2013, which is expected to drive the market to a value of $8,505.7M by the end of2013

BRAZIL CONSUMER ELECTRONICS MARKET VALUE (2004-2008)

0.0

1.0

2.0

3.0

4.0

5.0

6.0

7.0

$8.0

2004 2005 2006 2007 2008

0.0%

1.0%

2.0%

3.0%

4.0%

5.0%

6.0%

7.0%


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Consumer Electronics Market Segments

sThe Consumer Electronics market comprises of following segments:

s Electricals and Electronics Retailers

s Hypermarket, Supermarket and Discounters

s Discount, Variety Store and General Merchandise Retailers

s Music, Video, Books and Stationery Retailers

s Department Stores

s Other

BRAZIL CONSUMER ELECTRONICSMARKET SEGMENTATION

BRAZIL CONSUMER ELECTRONICS MARKET GEOGRAPHICSEGMENTATION

Electricals and

Electronics

Retailers

41%

Hypermarket,

Supermarket and

Discounters

7%

Music, Video,

Books andStationery Retailers

1%Department Stores

1%

Other

47%

Discount, Variety

Store and General

Merchandise

Retailers

3%

US

81%

Brazil

6%

Mexico

5%

Rest of the

Americas

3%

Canada

5%

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Consumer Electronics Market Forces & Dynamics

sThe market is highly competitive, forcing a high level of customer service and meeting pricing andregulatory pressures

s Despite the poor performance of consumer electronics in volume terms, some categories especiallythose with high unit prices experienced strong growth such as portable computers, LCD TVs, BDplayers and home cinema and speakers

sThe key buyers are specialized retailers of consumer electronics as well as supermarket chains andmusic stores and manufacturers of test gear, electronic components and related products as the keysuppliers

s Potential new players face several barriers fixed costs are fairly high, as is initial capital outlay,especially if a company proposes to set up its own production plant. Scale of economies are generally

important in this market

s Retailers likely to be strongly influenced by end-user demand. Potential substitutes include personalcomputers, games consoles which fulfill similar leisure functions to audio and video products

s Rivalry is strongly affected by the number and size of players in the market. It is a moderately easymarket to enter, the need to recover the cost of investment in manufacturing equipment, specializedstaff and a logistics network raises exit barriers, which intensifies rivalry

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FORCES DRIVING COMPETITION IN THE CONSUMER ELECTRONICS MARKET IN BRAZIL (2008)

0

1

23

4

5Buyer Power

Supplier Power


Degree of Rivalry

53


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Consumer Electronics Future Outlook

sThe Brazilian consumer electronics market is forecast to have a value of $8.5 bn, an increase of 19.3%

since 2008

sThe CAGR in the period 2008 - 2013 is predicted to be 3.6%

BRAZIL CONSUMER ELECTRONICS MARKET VALUE FORECAST (2008-2013)

6.0

6.5

7.0

7.5

8.0

8.5

$9.0

2008 2009 2010 2011 2012 2013

3.2%

3.3%

3.4%

3.5%

3.6%

3.7%

3.8%

3.9%


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Consumer Electronics Key Players

KEY FINANCIALS

COMPANY DESCRIPTIONM. Cap RevenueNet

Income P/E

$28,767.7 $29,857.7 $527.9 25.0x

s Engages in the healthcare, consumer lifestyle andlighting product businesses

s Consumer lifestyle products and solutionscomprise televisions, electric shavers, femaledepilation appliances, hair care and malegrooming products

30,137.9 85,631.2 (484.3) NM s Designs, develops, manufacturesand sells

electronic equipment, instrumentsand devices forconsumer, professional and industrial markets

s Offers consumer products and devices, includingtelevisions, video cameras, compact digitalcameras and digital single-lens reflex cameras

27,081.8 88,052.8 (1,228.1) NM s Manufactures and sells electronic and electricproducts systemsand components for consumer,business and industrial uses

s Offers video, audio equipment, information andcommunications equipment, such as AV, security,

electronic, Internet-enabled equipment, flat-panel,plasma TVs, blue - ray disc, DVD recorders, digitalvideo cameras, personal computers and mobilephones

cpi brazil

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