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Brazil Pharma Day
September 17th, 2012
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Brazil Pharma Day – Agenda
BRPH - Strategy & Integration 9 am - 9:30 am
• André Sá / Sara Rezende
Commercial 9:45 am - 10:45 am
• Carlos Dutra & team
Shared Service Center - SSC 11 am - 11:30 am
• Flávio Sanchez
People and Management 11:45 am - 12:15 am
• Gabriel Guioto & team
Operations 12:30 am - 13 pm
• Rodrigo Silveira & Operations team
Lunch – FARMAIS 13:15 pm - 14:30 pm
• Renato Lobo
Strategy & Integration
Sector and Company
Performance since IPO
Focus on Integration
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7.008.30 9.40 10.30 11.20 11.60
13.1014.80
17.2019.20
21.5023.60
26.40
30.20
36.00
43.00
1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011
Sales Performance in the Brazilian Pharmacy Retail Sector from 1996-2011 (R$ Billion)
Drugstores A Growth and Accelerating History
Source: IBGE. Farmácia Popular. Health. OMS IMS. Brazil Banco Central do Brasil
Drivers Micro Timing
Regional Brands Fragmented
Market Formalization and
Consolidation
Drivers Macro
Income Growth Population Aging Generics Drugs
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Brazil Pharma vs Competitors (2011)
Competitors’ focus
Market Growth - CAGR (2007- 2011)
Geographical concentration … Strong concentration in the Southeast Low concentration out of the Southeast region
Source: IMS Health
Pharmacies per region (2011)
High density
Low density
14.0% 16.2%
18.0%
SP Brazil BRPH Regions
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North 104
Northest 242
Midwest 118
Southeast
South 201
REGIONS
Owned stores
10
1
103 20
15
19
10
193
7
75
114
1
8
232 Owned stores
114 Owned stores
118 Owned stores
352 Franchises
201 Owned stores
05 Distribution centers
Footprint
1.017 stores
665 owned stores
352 Franchises
89
Source: Brazil Pharma
1.017 stores
Brazil Pharma: Footprint
Largest Drugstore Chain in Brazil: National Presence
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Source: Brazil Pharma, Abrafarma
Note: (1) Ranking by number of owned stores as of Dezember 31, 2011 considering the four largest Drugstore chains in Brazil; (2) n/a: Other chains do not have operations in the region
Ranking by region and Drug Store Chain
Number of Stores 1
4o
2o
1o
Northeast
n/a (2)
3o
North
n/a (2)
n/a (2)
Southeast
n/a (2)
Mid-west
n/a (2)
South
n/a (2)
Brazil Pharma: Leadership Position ...leader in four out of the five regions we operate
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Large Growth Capacity
Organic Growth (# owned stores)
Brazil Pharma: Market Penetration
Brazil Pharma Abrafarma
Branded Generics HPC
Diversified Sales Mix
(2Q12)
Market Growth
(CAGR07’-11’)
Maturation of Owned Stores
(2Q12)
Already contracted Growth
Performance since
IPO
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Brazil Pharma: Market Consolidation Strategic Growth based on M&A and Organic Growth
663 Points of sale 302 Owned Stores
361 Franchises
IPO @ Platform Actual Platform
201 Owned stores
352 Franchises
232 Owned stores
118 Owned stores
114 Owned stores
1,017 Points of sale 665 Owned stores
352 Franchises
89 Owned stores
60 Owned stores
153 Owned stores
361 Franchises
(1) Sant’Ana’s Distribution Center suffered a fire on December 2011. A new distribution center will be inaugurated in the second half of 2012 ; (2) Includes 11 stores acquired from Estrela
Galdino on April 2012 and added to Sant’Ana’s store count in June 30, 2012.Therefore they generated no revenues in 2Q12.
1
(1Q11) (2Q12)
Distribution Center
Owned stores
Franchises
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3.7 6.4
22.6 20.4
BRPH @ IPO (1Q11)
34.4 54.9
BRPH 2Q12
1.5 3.0
-10%
+74%
+98%
+60%
Operational Performance since the IPO … Not only in growth, but also in performance
3.8 3.5 -8%
Sales Performance
Administrative Performance
# of store employees
per store
Sales per store level employee
(R$ thousand)
EBITDA (ex-G&A) per employee1
(R$ thousand)
Increasing operational efficiency and stores productivity
# of administrative + distribution
center employees per store
EBITDA per employee2
(R$ thousand)
Notes: (1) Considers total stores and distribution centers employees.
(2) Considers total employees (store, distribution centers and administrative).
Focus on Integration Unifying Regional Leaders
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Brazil Pharma: Our History Great regional companies into one excellent National Company
2012 2013E 2014E 2016E2015E1945 1965 1975 1994
IPO
1994 2009 20111995
186 years of
History
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Brazil Pharma: Your first option!
Holding
OperationsAdministrative
(SSC)Commercial
Corporate
#1 for Suppliers #1 for Customers #1 for Talents
Dis
tin
ct
Co
mp
an
ies
Un
iqu
eC
om
pa
ny
Source: Brazil Pharma
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Our Structure – Improvement phases
Operations Administrative (SSC) Commercial
Corporate
Joint negotiation
Team centralization
Continuos improvement
1
2
3
1. Platforms operate separately but with
strict Corporate guidelines;
2. Centralization of Procurement
department: unification of regional talents
into one single team;
3. Commercial intelligence: relationship
with the industry, sales mix improvement,
scale in campaigns, standardization of
DC’s and Logistics.
Management Team
Training and Regional
Leardeships
Continuos improvement
1
2
3
Mapping
Plugging-in
Continuos improvement
1
2
3
1. Management Team to monitor the
Operations’ Team of each regional platform:
Culture dissemination and performance
monitoring;
2. Training and formation of Regional
leaderships;
3. Centralized operation’s management.
1. Requirements understanding, drawing
the scope and processes;
2. Plug-in platforms into the SSC.
3. Through quality tools, in the quest for
constant improvement in its processes
and productivity gains.
Commercial Department
Building Long-term Partnerships
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Commercial Director
Carlos Dutra
Procurement Manager
Renato Stefanoni
Logistic Manager
Jadir Tavares
Trade.Mkt Manager
Rovilson Apolinário
Estrutura
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Procurement:
Procurement
Centralize operations/negotiation for competitive gains
Acknowledgment as an unique and national Company
Strengthen relationship with suppliers
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Trade Marketing:
Rationalization and optimization of Brazil Pharma sales mix
Use of tools to optimize the stores area (profitability and sales)
Store layout adjustments providing a better consumption experience
Procurement
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Logistics:
Physical space in line with the Company’s vocation to growth
Operational excellence (storage, transportation, safety, productivity)
Standardization of the Distribution Centers’ operational process (systems, indicators, etc.)
Procurement
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Purchase / Trade
Corporate
Purchase
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Corporate
Sell In
Purchase / Corporate Trade
• Orders;
• Negotiation;
• Supllier service;
• Controls;
Corporate Purchase
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Trade
Corporate
Sell In
Sell Out Team / Execution
• Trade Marketing;
• Stores visitation;
• Generation of local demand;
• Campaings;
Prucurement and Local Trade Marketing
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Purchase / Trade
Corporate
Procurement structure
Purchase / Corporate Trade
• Orders;
• Negotiation;
• Supllier service;
• Controls;
Sell Out Team / Execution
• Trade Marketing;
• Stores visitation;
• Generation of local demand;
• Campaings;
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Corporate
Sell In
Sell Out
Sell Out
Sell Out
Sell Out
Procurement structure
Purchase / Corporate Trade
• Orders;
• Negotiation;
• Supllier service;
• Controls;
Sell Out Team / Execution
• Trade Marketing;
• Stores visitation;
• Generation of local demand;
• Campaings;
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Analysis:
Purchase: Commercial intelligence
Sales (Market growth vs. sales)
Stores profitability
Profitability per category, manufacturer, product (tax issue, revision of commercial conditions)
Optimized inventory (Distribution center & stores)
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May/12 Jun/12 Jul/12 Aug/12 Sep/12 Oct/12 Nov/12 Dec/12 Jan/13 Feb/13 Mar/13
Rosário
Sant’Ana
Mais Econômica
Big Ben
Guararapes
Improvement of Process and synergy gains
Improvement of systems and entries
Concluded Planned GoLive
Timetable: Procurement centralization
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Stores lay-out
Sales mix
Product categorization
Trade Marketing Constantly working on improving consumption experience...
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Non-renovated store
Trade Marketing Constantly working on improving consumption experience...
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Renovated store
Trade Marketing Constantly working on improving consumption experience...
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Trade Marketing Constantly working on improving consumption experience...
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Trade Marketing Constantly working on improving consumption experience...
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Trade Marketing Constantly working on improving consumption experience...
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Logistics ...Operational excellence supporting sales and growth
New DC – Distrito Federal Situated at Brasília Services Midwest region; Storage area: 5,000 m²; Ceiling: 8 mts; 3.6 thousand pallet position; Production capacity of 200,000 units/day; Storage capacity: up to 13,000 SKU; Operates with WMS system.
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Logistics ...Operational excellence supporting sales and growth
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Logistics ...Operational excellence supporting sales and growth
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Logistics ...Operational excellence supporting sales and growth
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Logistics ...Operational excellence supporting sales and growth
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New DC – Bahia Situated in Camaçari
Logistics ...Operational excellence supporting sales and growth
Services Bahia state, may also service Sergipe state Storage area: 9,000 m²; Ceiling:12 mts; 6,000 pallet positions (reaching up to 8.6 thousand); Production capacity of 400,000 units/day; Storage capacity: up to 15,000 SKU; Operates with WMS system.
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Logistics ...Operational excellence supporting sales and growth
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Logistics ...Operational excellence supporting sales and growth
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Logistics ...Operational excellence supporting sales and growth
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Logistics ...Operational excellence supporting sales and growth
Shared Service Center
- SSC Integrating talents and services, sharing excellence
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Preparation
Understanding the “as is”
Drawing the “to be”
Brazil Pharma’s Process Kit
Physical space
Dimensioning
SSC’s Modus Operandi
Productivity
Ensure scalability of SSC
Transactions Accounts payable per HC (daily)
Start Momentum 2
“Plug in”
Plug more operations into the SSC
Through productivity efforts, we are able to plug-in
the platforms operations with gains of scale in HC
Continuous improvement
(ESTABILIZATION)
Using quality tools we’ve created groups responsible for
process improvement s
E
X
A
M
P
L
E
Project Phases
Brazil
Pharma
Company
X
100 200
Brazil
Pharma
Company
X
150 200
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SIPOC
Cadastro de pessoas físicas
Suppliers Inputs Process Output Customers
1
2
3
4
O
Início Fim
Receber solicitação de cadastro
1)Cliente
2)Lojas
Loja
Arquivar fichas
CS I P
Cliente Ficha Prencher ficha CMV Ficha preenchida
Cliente Solicitação de cadastroReceber solicitação de
cadastro
1) Aceita cartão mais vantagens
(CMV)
2)Não aceita cartão mais
vantagens (CMV)
Fichas recebidas
Cliente
Lojas
Ficha preenchida
com todos os dados -
verificação do gerente
Conferir e protocolar fichaFicha CMV preenchida e
protocolada Call center
Call centerLojas
Call centerFichas
Receber fichas de
solicitação de cadastro
S I P O C MATRIX
FLOW DIAGRAM
CATALOGUE OF SERVICES
MATRIX OF OPERATIONAL RISKS
ANS VS Ano
SSC CONTRACT
Brazil Pharma’s Processes Kit
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Admission / Dismissal
Operational Groups
Op
eration
al grou
ps
Customers
Administrative Areas
Stores/DC/Call Center
Employees
Operational Level Agreement
Service Level Agreement
Regulators
Verification and Gathering
Profit Analysis
HUMAN RESOURCES AND GENERAL SERVICES
Finance (Administrative)
Administrative Support
IT Support
Ad
van
ced
Ser
vice
St
atio
ns
Cal
l Ce
nte
r
Co
nti
nu
ou
s im
pro
vem
en
t
Projects Performance
Suppliers
2
1
4
5
3
Service model of the SSC
The SSC will be as a new department responsible for providing adminstrative services to Brazil Pharma
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Typical Structure Process-Oriented Structure
• The Processes “cross over” the departments
• Organizational structure is based on departments
• Management measurements are department-based
• Fragmentation of processes, which have several
owners
• Difficulty in product management
• Departments lose their existence purpose.
• Organizational structure is a consequence of the processes.
• Management measurements are process-based
• One single owner for each macroprocess
• End-to-end integrated measurement in product
generation
Ch
arac
teri
stic
s Im
pac
ts
2. From Request to Payment
4. From Closing to Reporting
3. From Admission to Dismissal
1. From Order to Supply
In SSC, by plugging-in the platforms activities, we get an integrated view of processes, as we put together under a
single management activities that were sequential and correlated, but previously held separated, increasing the
control over overall quality.
Exa
mp
les
Direct an
d in
direct T
axes
Acco
un
ts Payab
le
Acco
un
ts Receivab
le
Treasu
ry Back-o
ffice
Payro
ll
Acco
un
ting
Pu
rchase o
f Ind
irect Items
Eq
uip
men
ts and
Help
desk
Macroprocessing SSC: plugging-in for Excellence in Services
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Admission to Dismissal
SSC
Op
erat
ion
al G
rou
ps
Verify and collect
Profit Analysis
HUMAN RESOURCES AND GENERAL SERVICES
Financial Administrative
Adminstrative support
IT Support
Co
nti
nu
ou
s im
pro
vem
en
t
Ad
van
ced
Se
rvic
e S
tati
on
Cal
l Ce
nte
r
1
URA
Satisfaction survey
2
3
4
• Very satisfied
• Satisfied
• Indifferent
• Unsatisfied
• Very unsatisfied
Calls from SSC manager in order to improve attendance
IT
Human Resources
Returned checks
Financial and Administrative Services
Management and Level 1 Problem Solving
Objective: Channel for doubts and information supply in
order to give an immediate response to the user
Finalized calls:
100% surveyed by phone calls
SSC Operation
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• Lower operating cost
• Longer implementation
• Higher investiment
• Higher operating cost
• Shorter implementation
• Lower investiment
SSC Customer service
HIGH TECNOLOGY RESOURCE
CENTRAL SERVICE
Special Cases
Resolution
Decision- Making
Self Service Especialized Attendance
OPERATIONAL GROUPS
COORDINATOR EXECUTIVE
Exception cases
e.g: Online Payment
Status
e.g: Payment
Questions
e.g: Invoice not
found e.g: Payment not in
compliance w. rules
Attendance Level Central service
The volume of problems solved in each level influences quality and costs of the service provided.
Central
Attendance
Scope
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PHONE
WEBPAGE
Collaborator contacts Brazil Pharma for
registration of Income Tax for its new
dependent, health plan and odontologicall
plan for the child
Child birth !!
Opening Call
Advanced Service Station
Collaborator delivers the child birth
certificate
Update of benefits and database from the
collaborator
Share Service Center
Central Service
Requirements via Central Service Real instance
1 2
3 4
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Indicator (“ANS”) Goal Jun/12 Jul/12 Aug/12
Call index - # of calls answered in 1º Level 40% 40.4% 47.2% 43.1%
Calls solved within timeframe index 90% 89.9% 94.3% 93.7%
Dropped call index 8% 5.1% 3.8% 2.5%
Average time on waiting (ATW) 15 sec. 15 seg. 11 seg. 07 seg.
Average time of attendance (ATA) 5min 4:19 min 4:23 min 04:06 min
Satisfaction attendance index 85% 77.4% 77.7% 85.3%
Volumetry Jun/12 Jul/12 Aug/12
# Received calls 8,030 9,856 10,055
# Dropped calls 408 371 255
# Total of opened calls 14,336 18,877 18,413
• Increase in HC for e-mail service
• Training of new attendants
• Open-line for problem solving
• Dedicated inbox for certain subjects
In time Delayed Concluded
Act Period
Revision of scripts together with N2 Sept/2012
Revision of process together with N2 Sept/2012
Training for satisfaction survey Sept/2012
Improvements in the satisfaction survey Sept/2012
Modification of TV screen’s Lay-out Sept/2012
Central Service
Indicators
Volumetry
Main developments
Prior Projects/Acts Status
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Po
sto
s A
van
çad
os
de
Ser
viço
s
Stock exchange of Excellence: Quotation of operational areas rely on
“ANS”/”ANO” attendance
The better operational performance in the year receives a recognition prize
Incentives a “healthy competition” among the operational groups
Objective: Support on improvement and optimization of
the process in order to perpetuate operational excellence
SSC Operations
Admission to Dismissal
Op
erat
ion
al g
rou
ps
Verify and collect
Verification of results
HUMAN RESOURCE AND GENERAL SERVICES
Financial Administrative
Adminstrative support
IT Support
Co
nti
nu
os
imp
rove
me
nt
Ad
van
ced
se
rvic
e s
tati
on
Ce
ntr
al s
erv
ice
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Stock Exchange of Excellence
1º R$ 149.9
2º R$ 148.9
3º R$ 147.43
4º R$ 147.43
5º R$ 146.07
6º R$ 140.19
7º R$ 140.08
8º R$ 126.08
IT Support
Verification and Gathering
Accounting close process
Stock Exchange of Excellence - June/12
Managerial information
Central service
Financial Administrative
Administrative support
Admission to Dismissal
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incorporate (plug-in) more activities into SSC
by increasing productivity
Increase of efficient headcount, adding value
to new demands of the SSC
SSC Adding Value ...more with less
More with less
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Employee BI (overall
headcount mapping)
EBITDA per store
Sales diary
Expenses
Purchase price (COGS)
Leasing contracts
control
Payments follow-up
Leasing expenses
control
Purchase centralization
of non-tradable items
(e.g.: travel, telephony,
etc..)
Work group dedicated
to looking for economic
opportunities through
improvement of process
and (or) controls
NEW CORPORATE DEMANDS
SSC BRPH
Quick Wins SG&A
Rental Management
Purchase of indirect
materials (synergies)
Managerial Information
Area
SSC Adding Value
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Transportation voucher
Average for vacations
Elimination of duplicated
vacation benefits
Food/Meal voucher
Saving
(R$/month) Description
Saving
(12 months – R$)
Deduction in transportation voucher benefits related to non
justified work absences
Payment adjustments
Vacation scheduling
Deduction in meal voucher benefits related to non justified work
absences
R$ 7,200
R$ 10,000
R$ 9,600
R$ 86,400.00
R$ 120,000.00
R$ 11,000.00
R$ 115,200.00
R$ 132,000.00
R$ 42,800 R$513,600 Total
Triennium &
Quinquennial
Configuration of the system to correct undue payments
R$ 5,000 R$ 60,000.00
After bringing the activities into the SSC, the continuous process improvement of has already provided savings...
SSC Adding Value Quick Wins SG&A...
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Working day
Assiduity award
Cash flow shortage
Saving
(R$/month) Description
Elimination of undue working day payment 220h to 110h.
Parameterization of the award payment
Intelligence on payments schedule
R$ 2,200
R$ 10,000
R$ 3,000
R$ 26,400.00
R$ 120,000.00
R$ 36,000.00
R$ 15,900 R$ 190,800 Total
Consigned Conciliation of consigned loans R$ 700.00 R$ 8,400.00
Saving
(12 month – R$)
R$ 58,700 R$ 704,400 Total profit recorded
CSC Agregando Valor Quick Wins SG&A...
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Central of Indirect items Purchase Focus on implementation
Identify existing policies and
revise when needed;
Define policy of use and
consumption for all working
fronts;
Measure gains from new
policies application.
Policy
Define control process;
Define mechanism to capture
gains ;
Define mechanism for
monitoring and reporting of
realized gains.
Control
Validate baselines already
proposed by consultancy
companies;
Accelerate the activities
already negotiated by the
consultancies companies
(realize gains ASAP);
Initial focus: travel,
connectivity (Mobile and fixed
telephony, data...);
Prioritize negotiation of the
most profitable fronts;
Seek baselines for new
fronts of negociation.
Price
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Negotiation only Policy + Process +Negotiation
Prior cost
After negotiation cost
Absorbed saving
used in others
operations
Policy
application
Process
controls
Negotiation Saving return to the
Company’s cash flow
Importance of policy and process definition Gains..
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Travelling request
Verification of plane ticket
request x Area budget
Yes
No
Price quotation
Travel policy
- Request in 5 days prior
- Cheaper price for the hour
- Duble room accomodation(whenever
possible)
- Reimbursement of R$ 35.00/day
Authorization
request - Manager approval/Area Director
Ticket issuance
Send ticket to
petitioner
In accordance to
rules?
Travel justification
Director approval
request
- Policy
Real x Budget
(Managerial info.)
Send status to
Board of directors
(Managerial info.)
Justification/ Action
plan
(Board of directors)
Control
Travel Control - Example
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Relógio de Ponto
Seguros
Segurança
IT material
Office material
Cleaning material
Fixed Telephony
Mobile Telephony
Travel
Fleet
Coils
Bags
Staff clock
Insurance
Fuel
Uniforms
Work fronts led by internal team +
consultancy;
Potential gains analysis for
prioritization of the fronts to be
implemented;
Definition of control policy and
process;
Synergy opportunities analysis.
Synergies – Negotiation front
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2011 2012 2013
Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec Jan Feb Mar Apr May Jun Jul Aug Sep
Preparation / implementation
GO
LIVE
Continuos improvement
In time Delayed Concluded Not initiated
Estabilization
Mais Econômica
(DP)
Corporate Closing
SAP Back Office
Quick Wins Big Bem
(PD)
Farmais, Corporate
and Mid-east
Plug-in “as is” Project “SSC Adding Value”
All operation plugged
into SSC
GO
LIVE
GO
LIVE
GO
LIVE
GO
LIVE
GO
LIVE
Bahia
(PD & Financial)
Rental
(Santana)
Rental (Mais
Econômica)
Rental (Big
Ben) Rental
(Rosário) Rental
Diagnosys
Central of indirect items purchase (Synergies)
South
(all areas) GO
LIVE
Kick off em
09/24
SSC Roadmap and Projects
People &
Management
Culture & Integration
Our people
Management
Culture & Integration Proud to be part of Brazil Pharma
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Culture
Dream
Mission
People
• To be the best Drug Store Chain of the country helping create a healthier world
• Provide health and well-being for our suppliers
• Create Long-term partnerships with our suppliers
• To be the best working climate to develop our talents
• To be profitable to our Shareholders
• Attitude to go beyond
• Etics in all we do
• Proud to belong
• Focus on results
• Meritocracy to recognize our talents
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Visual Identity
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Culture Roadshow Disseminating our values all over Brazil
• Store visits with André Sá and Gabriel Guioto.
• Dimension of Brazil Pharma structure, proud to be part of the group.
• Delivery of the Culture plaque: symbol of Brazil Pharma presence in each store and guideline for
employees conduct.
• Promote high management – employee proximity: every employee can reach the Company’s top
leadership.
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Annual Integration Event
• Strategic Planning 2013 – 2015
• Integration activity – creation of a Samba
association, reinforcing the pride to be part and
the feeling of group unit
• Activity to launch the Company’s standardization
process - Integrated Management System
• Main Lecture: Bernardinho – Volleyball coach.
“Transforming Sweat into Gold”.
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Integration
• Monthly workshops with Platforms, transforming regional into national practices.
Best Practices
• Training and Professional Development Process in Brazil Pharma, providing all employees the opportunity to increase knowledge and individual and collective productivity with several training programs.
“Vendo Mais” Program
• Creation of an interactive environment with the area documents, corporate information, space for communication and training material. National reach and real-time opportunity of integration between areas and regional units. Planned for 2013.
Intranet
Our People The look of Brazil Pharma
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Management Team
PEOPLE DIRECTOR
GABRIEL GUIOTO
PEOPLE
RAFAELLA ANDRADE
TRAINING
BERENICE PUCCI
Goals of the People Team
Disseminate Brazil Pharma culture for all platforms and provide proper training in order
to be the best and larger Drug Store Chain in the country.
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People BI Brazil Pharma family...
• 16,332 collaborators
• 13,549 collaborators allocated in stores
• 60% works longer than 1 year with us
• 66% are women
• 27% aged between 21 and 25 years
• 42% are store assistants /cashier operators
• Acknowledgment of our people
• Team-development
• Efficiency increase in our operations
• Providing better opportunities to our people
• Reduced turnover costs
• Reduced operational costs
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Carrer and Salary Plan
• Finished
ᅳ Job description
ᅳ Competency Map
• On going
ᅳ Job description validation at the Regional
Platforms
ᅳ Salary validation of each Regional Platforms
ᅳ Salary Adjustment
• Benefits
ᅳ Same remuneration methodology for all
platforms
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Training program
• Pharmaceutical trainer
• Supervisor trainer
• Multiplier
• Sales method
• Pharmaceutical trainer
• Supervisor trainer
• Multiplier
• Sales method
• Supervisor trainer
• Multiplier
• Sales method
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Performance Evaluation
Operation (all platforms)
• Evaluate leadership skills at supervisor level
Operation/ Sales
• Sales performance evaluation
Evaluate collaborator skills (know-how, abilities and behavior), according to area and
scope of activity.
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Executive Development Program
• Definition of the Talents Profiles based on our culture
• HR Follow-Up and Performance Evaluation as main tools Identification of the Company’s
Talents
• First Class: 06/24 to 07/01, and 11/08 to 11/10
• Second Class: 2013 Executive Training
• Directed Development Program
• Compensations and Benefits to Retain Talents (RETAIL: Intelligence, Leadership and Talent Retention)
Talent Development and Retention
Management Strategic support for each Regional Platform
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Management Team
DIRECTOR
PERFORMANCE MANAGEMENT
GABRIEL GUIOTO
SOUTH PLATFORM
FABIO COSTA
MID-EAST PLATFORM
GUILHERME FIORENZANO
BAHIA PLATFORM
MAURÍCIO TISO
NORTH/NORTEAST PLATFORM
FABIO EIRADO
RECIFE OPERATION
NATHÁLIA RODRIGUES
Goals of the Management Team:
Monitoring and controlling the pharma retail operations from Brazil Pharma group in
order to put in practice the goal of being the best and larger Drug Store Chain in the
country
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Improvement and Projects
Reduction of the store HC, decreasing the HC/store average from 22.6/store in 1Q11 to
20.4/store in 2Q12
Renegotiation of existing agreements and termination of older agreements
Corporate card cancellation
Reduction of expenses with transportation of employees to stores working after 10 p.m.;
Implementation of the VoIP system in all company’s land lines and review of the mobile
phone users;
Store Expenses Control (meals, phone, etc.)
Cost reductions already implemented
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Weekly meetings with Regional Managers and Supervisors
Implementation of budget monitoring
Control focused on variable expenses such as Telephone Lines, Travels and Fuel
Implementation of a payment control and approval by competent areas
Implementation of a reimbursement policy for employee expenses
Control and approval of positions, transferences and raises
Implemented management improvements
Improvement and Projects
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Profit sharing for store Managers/Supervisor (implement monitoring of expenses under the
store control)
Help in the efficacy analysis of CD
Request a review of the chain power installations to reduce costs
Project to reduce water use in the chain
Conduction of a study to reduce delivery costs
Help to migrate from BackOffice to SSC
Challenges and ongoing projects
Improvement and Projects
Operations Focus on sales and leadership development
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Initiated his professional experience in
Drogaria Rosário at the age of 15 as a
Underage Trainee. He worked in every
position in the store – from salesman to
store supervisor.
He was Director of Operations & Sales in
GRD and currently works as Director of
Operations of GRD.
RODRIGO SILVEIRA
Professional Training and Development Training and Partner Succession...
In charge of training and transition process of
incorporators
1.Identify, evaluate and promote training for the platform
professionals, developing the vision of “business owners”;
2.Monitor main indexes and promote actions that ensure that
goals related to these indexes are reached;
3.Perform regular maintenance, as required.
Status:
South and North: first step ongoing
Bahia and Mid-Western: in phase of maintenance
Strategic Goal
PROFESSIONAL EXPERIENCE
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Professional Training and Development ...Training future leaders
New identity of the “Training and
Professional Development Process in
Brazil Pharma”, providing all
employees the opportunity to
increase knowledge and individual
and collective productivity with
several training programs.
We also highlight the launch of the
BRPH Sales and Consumer Service
Method, with tips and techniques to
standardize the consumer service and
maximize results.
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MUBARACK - SIG/PDCA, INDG – GMR/GMD, LT/A PONTE e SETA –
SIX SIGMA
Looking for continuos
Improvement
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• Store Official Visit by the Coach Lead. Tool developed in the Mid-Western based on the use of Consulting techniques: MUBARACK- SIG/PDCA, INDG – GMR/GMD, LT/A PONTE and SETA – SIX SIGMA.
VOLLTA Spreadsheet:
• Formalize and control visits of each Supervisor to the store. Identify productivity, technical, operational or professional attitude deviations or issues.
Purpose:
“A monthly Action Plan is prepared in order to revert results for each clerk with a negative deviation in the Mid-Western.”
Operations & Sales - GRD
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Operation Team
EMILIO JOSE DE AZEVEDO
WESLEY BARBOSA RICARDO KITAMURA FABIO COSTA
Our Operation Regional Managers:
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20 years working in the area
Initiated his professional experience in
1992 as cashier, Salesman, manager,
pharmacist, supervisor and regional
manager. Currently Manager of
Operations in Mid-Western for Brazil
Pharma.
Background: Drogaria Santa Mônica
and Drogaria Rosário (Brazil Pharma).
EMÍLIO JOSÉ DE AZEVEDO
PROFESSIONAL EXPERIENCE
Mid-Western Platform
Strengths
Training and Professional Development Process
completely implemented
Marathon – largest sales campaign in the
pharmaceutical retail
Average Ticket
Leadership in the Mid-Western market
Strong growth in the States of GO and MT
Top of Mind for 2 consecutive years.
Points to be developed
Head Count by store
Launch of the new CD
Reduction of the discount
Platform Shot
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2 years working in the area
Experience as analyst, Coordinator and
Manager of planning, controllership, budget
and management areas
Background: Brazil Pharma, Mais
Econômica, Itaú, Credicard and PDG
FÁBIO COSTA
PROFESSIONAL EXPERIENCE
Strengths
Over 1 million of generic drugs/month
Capillarity in the countryside
204 stores, 80 cities, 2 States
Reference in the work with C and D classes
Points to be developed
Head Count by store
Mix adjustment
Logistics
Expansion of Covenants
Improve performance in A and B publics
Implementation of the Training and Professional
Development Process: Multiplying agents, Supervisors and
Regional Managers
Platform South
Platform Shot
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12 years working in the area
Experience in administrative and financial
routines, foreign trade, costs, planning, sales and
general direction.
Background: several areas, such as agriculture,
metallurgy, communication, food, cosmetics and
pharma retail in positions of office boy, supervisor,
manager and director.
RICARDO KITAMURA
Strengths
Absolute leader in the North region and largest player.
In the city of Belém, Leader for over 15 years, with
average preference of 70% of the population.
Work in the States of PA, MA, PI, PE, PB, CE and AP.
Points to be developed
Focus in the countryside growth;
Expansion of the dermo-cosmetics sales and Big
Serviços;
Integration of Guararapes Store.
Platform North/Northeast
PROFESSIONAL EXPERIENCE
Platform Shot
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12 years working in the area
Experience in Administrative and financial
routines, Sales, Trade Marketing and Category
Management
Background: AMBEV, Niasi and Colgate Palmolive
in positions of salesman, supervisor, manager and
director.
WESLEY DE PADUA BARBOSA
Strengths
70% of market share in the city of Salvador
Average public of 2 M individuals/month in 114
stores
15 years as top of mind in Salvador
Developing average ticket
Points to be developed
Team training
Store layout
New CD Implementation of the Training and Professional
Development Process: Multiplying agents, Managers,
Supervisors and Regional Managers
PROFESSIONAL EXPERIENCE
Platform Northeast - Bahia
Platform Shot
Farmais
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Why to expand the footprint?
# Stores by
Sales
category
Average sales
of each store
R$
thousand/mon
th
Total sales of
each category
R$ MM/year
Categories in which Own
BPRPH Platforms act
Potential categories for
FARMAIS
Addressable market
•10,062 stores
• Average turn-over ~R$
140 thousand/month
• Total turn-over ~R$ 1,4
Bi / month ~R$ 16,8 Bi
/ year
11.172 41.052
Source: IMS internal bases, by distribution study. Data related to medications
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Farmais Context
Number progression of active stores from Farmais Chain
Main leverages for Farmais Turn Around
Expansion
Management
Brand Equity
• Creation of a team focused in the expansion with a goal based on results
• Flexibility of fees and conditions for new stores
• Farmais benefits individually calculated in order to encourage conversion
• Unified management system - transparency regarding all the store numbers
• Creation of a trade area and solid training of the field consultants
• Synergy with the know-how obtained in own platforms
• Ana Hickmann as advertising girl and improved marketing strategy
• Convention of franchise holders with motivational lecture and recognition of the best
franchise holders
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Farmais Representativeness in BRPH
• FARMAIS Representativeness in the number of BRPH stores
• Turn-Over Mix – “Daily Sale” criterion
• Farmais represents approx.
34% of the total number of
BRPH stores.
• In the current scenario,
Farmais will represent 37% up
to 2014.
• In case of expansion to
alternative areas, the
representativeness would
increase to 42%
• Farmais represents approx.
18% of sales, same % that it
tends to reach in 2014 in the
current scenario.
• In case of expansion to
alternative areas, the
representativeness would
increase to 21%
368 444 532 602
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Macro benefits to become Farmais
Independent Farmais
Commercial
conditions
Management
Marketing
Regulatory /
legal
• Purchases made by one drugstore or a small
group of drugstores, obtaining smaller margins
• Product financial fees are within the market
standard
• Purchases with negotiated conditions for over a
thousand stores – Larger margin
• Product financial fees are much more appealing
• Absence of a team professional supervision
focused in the store and in trade techniques to
leverage the turn-over
• Team expert in store management with trade
know-how to increase the store turn-over and
brand visibility
• Inventory management and optimization of a
regionalized mix
• Regular training for store teams
• Local marketing with low efficacy and no large
scale media power
• Amateur material with high costs and low
appealing
• Ana Hickmann as advertising girl in
• Seasonal campaigns with drawing of cars,
motorcycles, tablets etc
• Mass Media in the largest communication
companies in Brazil
• Tabloids with price intelligence according to the
working region
• Reduced or no support of specialized
professionals in regulatory and legal issues
• Technical team that facilitates and reduces
the costs of all regulatory processes, in addition
to alert on all possible renewals
• Support in decisions in order to avoid potential
legal and accounting issues
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The new look of Farmais Creating Brand value
ANA HICKMANN
The new integrant of Farmais
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Brazil Pharma Day
Thank you for you presence
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Nota Importante
This document may contain forward-looking statements in relation to the Company and its subsidiaries which reflect the current outlook
and/or expectations of the Company and its management for its performance and its business and in relation to future events. These
forward-looking statements are subject to risk and uncertainty in respect of factors which cannot be controlled or precisely estimated by
the Company, such as market conditions, competitive environment, currency fluctuations and changes in the inflation rate, alterations in
regulatory and governmental bodies and other factors affecting the Company's operations. As a result, the Company's future results may
show material differences from these projections.
The reader is warned not to take any investment decision exclusively on the basis of these forward-looking statements. The forward-
looking statements do not represent and should not be interpreted as a guarantee of future performance. The Company does not
undertake to publish any revision of these forward-looking statements, or to update them in the face of events or circumstances which
may arise after the date of this document.
This document contains operational information and other proforma management information which is internal to the Company and not
derived directly from the financial statements. This information has not been specially reviewed by the Company’s independent auditors
and may involve assumptions and estimates adopted by the management. This information should not be considered as sufficient in
isolation for any investment decision and should be read in conjunction with the Company’s financial information that has been subject to
limited review or audit and which is filed with the Securities Commission (CVM).
No responsibility will be accepted by the Company and its subsidiaries, or by their board members, officers, agents, employees, advisers
or representatives, for any loss or prejudice arising from the use of the information presented or contained in this document, or for any
damage resulting, corresponding or specific thereto. Data included in this document was obtained by means of internal research, market
surveys, information in the public domain and business publications; the Company has not confirmed the reliability of this data with the
respective sources.