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August 15, 2014
2Q14 EARNINGS RELEASE
Highlights | Corporate
2
Only player positioned in the Brazilian market in the segments of Distribution, Retail,
and Hospital & Specialities;
Strategic partnership with AmerisourceBergen, the world’s largest player in the
pharmaceutical specialties;
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, combining all group companies in the SAP
plataform.
Highlights | Period
3
CONSOLIDATED
• Closing of the Deal with AmerisourceBergen, on June 26th 2014,
with a capital increase of R$ 248.0 million and a potential reduction
of R$ 31 .0 million/year in financial expenses;
• Maintenance of the 2.3% EBITDA margin, even on a quarter with
6% less working days and with a 22.2% lower prices increase.
RETAIL
• Growth of 7.2% in Drogasmil / Farmalife sales and of 13.5% in Tamoio’s, in comparison to the 2Q13;
• 18.6% and 37.6% year-over-year increase on Drogasmil / Farmalife same store sales and average store sale/month;
• Improvement of 35.2% of Drogasmil / Farmalife EBITDA and 11.5% of Tamoio’s against previous quarter.
SPECIALTIES
• Closing of the Deal with AmerisourceBergen, with an R$ 40 .0 million contribution for the division;
• 15.1% growth year-over-year on specialties retail sales;
• 20.0% increase year-over-year on oncologicals sales.
PHARMACEUTICAL DISTRIBUTION
• Operating expenses shortened from 8.6% to 8.3%, even with a 3.0% lower in sales in the quarter;
• R$ 6.3 million negative impact on the gross profit due to a lower price increase;
• Midsize and independent customers increased 3.3% in comparison to the 2Q13, even on a quarter with 6% less working
days;
• 3.4 days cash cycle reduction yoy.
Specialties
2Q13 2Q14
162.9
19.4
15.7
3.4
148.4
17.6
15.7
1.4
Retail*
2Q13 2Q14
145.1
34.9
43.4
-9.0
161.0
50.1
47.2
2.3
Consolidated*
2Q13 2QT14
1,099.8
148.7
122.4
23.7
1,075.3
148.3
121.7
24.3
Pharmaceutical
Distribution
2Q13 2Q14
854.0
94.3
63.2
29.7
828.4
80.6
58.8
20.5
Highlights | Breakdown by Division – 2Q14
4
Gross Revenues
Gross Profit
SGA
Adjusted Ebitda
(*) Pro-forma figures: 100% of revenues from Tamoio and Drogasmil / Farmalife (unaudited figures for 2Q13)
CONSOLIDATED PERFORMANCE
Consolidated Performance
6
Gross Revenues Evolution (R$ million)
2Q13 1Q14 2Q14
1,016.9 976.6 1,009.2
4.3%
-2.2%
Pharmaceutical Distribution
Specialties
Retail
Midsize and independent customers
increased 3.3% in comparison to the
2Q13, even on a quarter with 6% less
working days.
15.1% growth on specialties retail
sales and 20.0% increase on
oncologicals sales in comparison to
the 2Q13.
Year-over-year sales increases of
7.2% from Drogasmil / Farmalife and
of 13.5% from Tamoio.
82.9
54.6
66.1
1,099.8
1,031.2
1,075.3
Accounting Consolidated Gross Revenues
Pro-forma Consolidated Gross Revenues: 100% of revenues from
Tamoio and Drogasmil / Farmalife (unaudited figures for 2Q13)
Performance by Division
Pharmaceutical Distribution
2Q13 1Q14 2Q14
854.0
818.7 828.4
1.2%
-3.0%
Specialties
2Q13 1Q14 2Q14
162.9 146.3 148.4
1.4%
-8.9%
Retail(*)
2Q13 1Q14 2Q14
58.1
11.0%
7
Evolução da Receita Bruta (R$ milhões)
87.0
94.6 98.7
61.2 62.3
145.1
155.8 161.0
3.4%
Accounting Gross Revenues
Pro-forma additional Gross
Revenues
(*) Pro-forma figures: 100% of revenues from Tamoio and Drogasmil / Farmalife (unaudited
figures for 2Q13)
Consolidated Performance
8
2Q14 2Q13
113.7
1Q14
106.5 117.7
Proforma (*)
Gross Profit (R$ million and % Net Revenues)
15.8 %
2Q14 2Q13
15.4%
148.7
1Q14
135.9
15.6%
148.3
12.9% 12.6 % 13.4%
(*) Pro-forma figures: 100% of revenues from Tamoio and Drogasmil / Farmalife (unaudited figures for 2Q13)
Consolidated Performance
9
12.6%
2Q13
122.4
13.7 %
1Q14
117.8
12.8%
2Q14
121.7
9.0%
2Q13
79.0
11.1 %
1Q14
93.3
11.0%
2Q14
96.5
Operating Expenses – SG&A (R$ million and % Net Revenues)
Proforma (*)
(*) Pro-forma figures: 100% of revenues from Tamoio and Drogasmil / Farmalife (unaudited figures for 2Q13)
Consolidated Performance
10
2Q13
3.8%
33.1
1Q14
1.4%
11.9
2Q14
2.3%
20.4
71.3%
-38.6%
2Q13
2.5%
23.7
1Q14
1.8%
15.1
2Q14
2.6%
24.3
61.2%
2.5%
EBITDA and EBITDA Margin (R$ million and % Net Revenues)
Proforma (*)
(*) Pro-forma figures: 100% of revenues from Tamoio and Drogasmil / Farmalife (unaudited figures for 2Q13)
Consolidated Performance
11
2Q13
(4.3)
1Q14
(12.1)
2Q14
-0.4%
-1.4%
0.4%
3.6
2Q13
12.6
1Q14
(13.5)
2Q14
1.4%
-1.6 % 0.2%
2.1
Net Profit (R$ million and % Net Revenues)
Proforma (*)
(*) Pro-forma figures: 100% of revenues from Tamoio and Drogasmil / Farmalife (unaudited figures for 2Q13)
Consolidated Performance
Reduction of 12.7 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
(4) In 2Q14, the account was based on the average
gross sale and CGS, excluding Specialties division.
2Q14(4) 1Q14 2Q13
Cash Cycle - Days * 56.3 48.1 43.6
Accounts Receivable(1) 55.1 45.1 47.3
Inventories (2) 51.1 49.2 55.9
Accounts Payable (3) 49.9 46.2 59.6
Cash Cycle
(Days)
2Q14 2Q13 1Q14
Cash Flow Generated /
Used) in Operating Activities (11.9) (31.6) 81.0
Internal Cash Generation 1.4 23.6 5.1
Operating Assets Variation 13.3 (55.2) 75.9
Cash Flow (Used)
in Investing Activities 16.6 (78.8) (10.3)
Cash Flow Generated /
(Used) by Financing Activities 145.9 72.4 (16.0)
Net Increase /
(Decrease) in Cash 150.6 (38.0) 54.7
12
Consolidated Performance
13
Capex
2Q14
5.0
Others
2.0
Remodeling
of Stores
0.9
IT
0.3
Machinery and
Equipment
1.8
Capex (R$ million)
Indebtedness: Net Debt and Net Debt / EBITDA
(R$ million)
2Q13
359.4
3.9x
1Q14
412.0
4.6x
2Q14
167.1
2.2x
PHARMACEUTICAL DISTRIBUTION
Pharmaceutical Distribution
Financial Data (R$ million and % Net Revenues)
15
EBITDA Margin
(%)
2.9
2Q13 2Q14
4.0
Op. Exp. SG&A
(%)
8.3
2Q13 2Q14
8.6
Gross Margin
(%)
11.3
2Q13 2Q14
12.8
Gross Revenues
(R$ million)
828.4
2Q13 2Q14
854.0
Raise of 10.3% in the OTC
categories compared to 2Q13,
and of 14.3% over 1Q14.
3.4 days cash cycle reduction
yoy;
R$ 4.4 million reduction in total
operating expenses over 2Q13,
considering absolute figures;
Midsize and independent
customers increased 3.3% in
comparison to the 2Q13;
SPECIALTIES
Financial Data (R$ million and % Net Revenues)
17
Ebitda Margin
(%)
1.1
2Q13 2Q14
2.3
Op. Exp. SGA
(%)
11.6
2Q13 2Q14
10.8
Gross Margin
(%)
13.1
2Q13 2Q14
13.4
Gross Revenues
(R$ million)
148.4
2Q13 2Q14
162.9
Specialties
Closing of the Deal with
AmerisourceBergen, with an
R$ 40.0 million contribution
for the division;
15.1% growth year-over-year
on specialties retail sales;
20.0% increase year-over-year
on oncologicals sales.
RETAIL
Financial Data (R$ million and % Net Revenues)
19
Ebitda Margin
(%)
5.5
2Q13 2Q14
4.7
Op. Exp. SGA
(%)
25.6
2Q13 2Q14
24.2
Gross Margin
(%)
31.1
2Q13 2Q14
28.9
Gross Revenues
(R$ million)
98.7
2Q13 2Q14
87.0
Retail | Tamoio
Gross revenues up 13.5% Year
over year;
Average store sale/month
increase of 7.8% when
compared to 2Q13, achieving
R$ 548.2 thousand;
Gross margin growth of 2.2
p.p. when compared do 2Q13,
reaching R$ 31.1%.
2Q13
508.5
2Q14
548.2
1Q14
525.5
7.8%
2Q13
82.7
2Q14
91.7
1Q14
88.1
10,9%
2Q13
80.0
2Q14
89.0
1Q14
84.8
11.2%
Retail | Tamoio
4.3% 4.9%
20
4,1%
SSS Mature Stores (R$ million)
Monthly Average Store's Sales (R$ thousand)
Same Store Sales (R$ million)
2Q13
25.2
2Q14
27.3
1Q14
26.1
8.2%
4.6%
Retail | Tamoio
# of Stores (units)
2Q13
57
1Q14
60
2Q14
60
Average Ticket (in reais)
21
0 Opening
0 Close-downs
0 Reformulating
47 Mature
1Q14
vs.
2Q14
5.3%
0.0%
Financial Data (R$ million and % Net Revenues)
22
Ebitda Margin (%)
-5.0
2Q13 2Q14
-22.5 Op. Exp. SGA
(%)
35.2
2Q13 2Q14
38.6
Gross Margin
(%)
31.2
2Q13 2Q14
16.9
Gross Revenues
(R$ million)
62.3
2Q13 2Q14
58.1
Retail | Drogasmil/Farmalife
Year-over-year sales increases
of 7.2%;
Average sales per store up
37.6% from 2Q13;
Gross margin increase of 1.9
p.p. and 14.3 p.p., against 1Q14
and 2Q13, respectively.
Operating expenses in
absolute values down 5.3%
QoQ;
Ebitda improvement of 35.2%
and 76.3%, compared to 1Q14
and 2Q13, respectively;
Varejo | Drogasmil/Farmalife
SSS Mature Stores (R$ million)
Monthly Average Store's Sales (R$ thousand)
2Q14
346.2
1Q14
325.7
37.6%
251.7
2Q13 2Q13
16.5
2Q14
19.5
1Q14
19.6
18.6%
2Q13
16.2
2Q14
19.1
1Q14
19.4
18.0%
23
-0.5%
Same Store Sales (R$ million)
-1.7% 6.3%
Varejo | Drogasmil/Farmalife
24
2Q13
29.0
2Q14
38.1
1Q14
30.1
9.5%
2Q13
77
2Q14
60
1Q14
63
-22.1%
-4.8%
Average Ticket (in reais)
5.7%
# of Stores (units)
3 Openings
6 Close-downs
7 Reformulating
53 Mature
1Q14
vs.
2T14
ANALYST COVERAGE
Analyst Coverage
26
Company Analyst Telephone E-mail
Banco Fator Caio Moreira +55 (11) 3049-9487 cmoreira@bancofator.com.br
Brasil Plural Guilherme Assis +55 (11) 3206 8285 guilherme.assis@brasilplural.com.br
BTG Pactual João Carlos dos Santos +55 (11) 3383-2384 joaocarlos.santos@btgpactual.com
Credit Suisse Marcel Moraes +55 (11) 3841 6302 marcel.moraes@credit-suisse.com
HSBC Luciano Campos +55 (11) 3371 8194 luciano.t.campos@hsbc.com.br
Itaú BBA Juliana Rozenbaum +55 (11) 3073 3040 juliana.rozenbaum@itausecurities.com
Merrill Lynch Mauricio Fernandes +55 (11) 2188 4236 mauricio.fernandes@baml.com
Morgan Stanley Javier Martinez de Olcoz +55 (11) 3048 6088 javier.martinez.olcoz@morganstanley.com
Votarantim Andre Parize +55 (11) 5171 5870 andre.parize@votorantimcorretora.com.br
Max Fischer | CFO and IRO & Beatriz Diez | IR Manager
www.profarma.com.br/ir | Tel.: 55 (21) 4009-0276 | E-mail: ri@profarma.com.br
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