4Q08 and 2008 Earnings Release

2

Highlights For The Period

- A 13.3% growth of the consolidated Gross Revenue in 2008 when compared to the same period of the

previous year. reaching R$ 2.9 billion. with remarks to the vaccine and hospital segments with an

expressive growth of 46.2%.

- Reduction of the Operating Expenses (administrative. commercial. and logistic) in 5% in the year 2008

when compared to the same period of the previous year. reaching 7.6% of the Net Revenue.

- A drop in the average terms of accounts receivable for the fourth quarter in a row. accumulating in the year

a 6 day reduction, representing a R$ 50.0 million reduction in working capital

- Recovery of the gross margin (added to Revenues from Services to Suppliers) in the 4Q08 in 18.3% in

comparison with the previous quarter, reaching 11%, 0.3 ponto percentual below the Gross margin of the

4Q07.

- Reduction of 12.6% in errors per million of delivered units dropping from 95.0 registered in 4Q07 to 83.0 in

4Q08. When comparing 2008 with 2007. there was a reduction of 37.2%. going from 145.0 to 91.0.

- Electronic Invoice – In December 2008 the electronic invoice system was implemented. in a nationwide

scale. in the pharmaceutical chain. whose objectives are to increase the transparency of the commercial

transactions in the sector and facilitate the control of the federal and state authorities.

- Profarma announced to the market on November. 17. 2008. one additive to the repurchase program of

company’s shares. increasing the shares maximum quantity to be acquired from 312.500 common shares to

1.062.500 shares.

3

Gross Revenues Evolution

In R$ MM

738.2 783.4 714.9

2.596.4

2.940.4

4Q07 3Q08 4Q08 2007 2008

4

Gross Revenues Breakdown

(R$ Million) 4Q08 4Q07 % Variation 3Q08 % Variation 2008 2007 % Variation

Branded 489.9 516.3 -5.1% 536.0 -8.6% 2048.5 1766.8 15.9%

Generics 41.5 46.6 -11.0% 48.6 -14.6% 166.6 165.3 0.8%

OTC 127.6 128.1 -0.4% 144.6 -11.7% 523.4 471.9 10.9%

Health and Beauty Products 31.4 31.1 0.9% 30.1 4.4% 121.8 137.6 -11.5%

Hospitals + Vaccines 24.4 16.0 52.4% 24.1 1.4% 80.1 54.8 46.2%

Total 714.9 738.2 -3.2% 783.4 -8.7% 2,940.4 2,596.4 13.3%

5

Market Share (%)

Source: IMS

9.3 9.6 9.6

11.5 11.7

12.812.1

10.9

2004 2005 2006 2007 2008 4Q07 3Q08 4Q08

In R$ MM

and as % Net Revenues

6

Gross Profit and Revenues

from Services to Suppliers

Gross Profit Revenues from Services to Suppliers Adjusted GP Margin (%)

63.5 47.0 51.0

217.0 220.7

49.5

15.19.2

32.8

16.5

11.3%

9.3%

11.0% 11.0% 10.7%

4Q07 3Q08 4Q08 2007 2008

7

Operating Expenses

In R$ MM

and as % Net Revenues

EXPENSES: General and Administrative + Selling and Marketing + Logistics and Distribution

53.946.7 48.1

181.8

193.6

8.4%

7.0%

7.9% 8.0%7.6%

4Q07 3Q08 4Q08 2007 2008

8

Net Financial Expenses

In R$ MM

and as % Net Revenues

8.610.0

32.9

18.4

1.3% 1.4%1.6%

0.8%

1.3%

4Q07 3Q08 4Q08 2007 2008

9.1

9

Net Income

In R$ MM

and as % Net Revenues

5.06.5

47.0

31.6

16.9

0.7%1.1%

2.1%

1.2%

2.6%

4Q07 3Q08 4Q08 2007 2008

Adjusted EBITDA

and EBITDA Margin

10

In R$ MM

and as % Net Revenues

25.2

15.521.5

80.1 78.7

3.9%3.5% 3.5%

3.1%

2.3%

4Q07 3Q08 4Q08 2007 2008

11

Cash Flow

(R$ Million) 4T08 4T07 % Variation 3T08 % Variation 2008 2007 % Variation

Cash Flow Generated / (Used) in Operating Activities 10.6 (6.2) -271.6% 18.7 -43.1% 11.0 (162.8) -106.8%

Internal Cash Generation 10.7 14.3 -24.6% 11.0 -2.4% 53.2 56.5 -5.9%

Operating Assets Variation (0.1) (20.4) -100.6% 7.7 -98.4% (42.2) (219.4) 80.8%

Trade Accounts Receivable 43.8 (30.5) -243.6% (3.8) -1247.3% 58.3 (131.9) -144.2%

Inventories (18.7) (59.1) 68.4% 0.2 -9570.1% 0.6 (105.7) -100.5%

Suppliers (6.9) 81.6 -108.4% 13.0 -152.9% (47.5) 40.1 -218.5%

Other Items (18.4) (12.5) -45.6% (1.7) -964.1% (53.5) (21.9) -144.6%

Cash Flow (Used) in Investing Activities (4.2) (2.7) -52.4% (1.4) -197.8% (10.8) (16.6) 35.1%

Cash Flow Generated / (Used) by Financing Activities (15.3) 52.8 -129.0% (8.2) -87.3% (19.3) 47.1 -140.9%

Net Increase / (Decrease) in Cash (8.8) 43.9 -120.1% 9.1 -196.8% (19.0) (132.3) 85.6%

12

Cash Cycle

3Q06 4Q06 1Q07 2Q07 3Q07 4Q07 1Q08 2Q08 3Q08 4Q08

49.3 53.4 62.5 69.6 67.8 64.3 68.8 67.2 61.8 65.8

45.2 50.0 54.6 53.1 50.9 51.7 50.7 49.2 47.0 45.9

33.1 44.7 43.4 47.2 41.3 48.6 47.9 45.7 42.5 49.9

Accounts Payable (3) 29.0 41.3 35.6 30.7 24.5 36.0 29.8 27.7 27.7 29.9

Cash Cycle - Days *

Accounts Receivable (1)

Inventories (2)

*Average

(1) Average of Gross Revenues in the Quarter

(2) Average of COGS in the Quarter

(3) Average of COGS in the Quarter

13

Net Debt (R$ MM) and Net Debt / Ebitda

Indebtedness

In R$ MM

* Ebitda = Accumulated last 12 months

124.0 124.0

149.4149.4154.5

1.51.91.9

1.51.9

4Q07 3Q08 4Q08 2007 2008

14

Capex

In R$ MM

and as % Net Revenues

16.6

1.4

10.8

2.8

0.4% 0.7% 0.7%0.4%0.2%

4Q07 3Q08 4Q08 2007 2008

4.2

15

Service Level

(units served / units requested)Logistics E.P.M

(Errors per Million)

Operating Indicators

90.9%90.8%

90.2%

4Q07 3Q08 4Q08

95.086.0 83.0

4Q07 3Q08 4Q082007 2008

91.7%

91.3%

2007 2008

145.0

91.0

16

Share Performance

* 100 pts basis on 26/oct/2006

15

25

35

45

55

65

75

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95

105

115

125

135

145

155

165

175

185

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Ibovespa Profarma

Max Fischer

CFO and IR Director

Beatriz Diez

IR Coordenator

Telephone.: 55 (21) 4009 0276

E-mail: ri@profarma.com.br

www.profarma.com.br/ir

IR Contacts