Profarma - 3Q16 earnings release

NOVEMBER 9, 2016

2

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

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

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

pharmaceutical specialties, resulting in the creation of the company Profarma

Specialty since 2014;

• The Company carried out five acquisitions between 2012-2016, including its

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

position as 6th largest player within this segment in the country;

• Proven capacity to integrate acquisitions, combining all group companies in the

SAP plataform, BI Cognos and Hyperion.

3

Specialties(*)

3Q15 3Q16

Retail(**)

3Q15 3Q16

Consolidated (*)(**)

3Q15 3Q16

Pharmaceutical

Distribution

3Q15 3Q16

4

Gross Revenues

Gross Profit

SGA

Ebitda

(**) pro forma figures: 100% of revenues from Tamoio in 3Q15.

(*) pro forma figures: 100% of revenues from Specialties (3Q15 and 3Q16).

201.4

22.3

16.4

5.6

241.5

23.5

20.0

1.9

191.0

55.8

51.5

2.5

198.1

60.0

51.2

7.1

1,311.2

162.0

132.4

29.1

1,367.3

177.7

140.0

38.9

1,010.4

83.9

64.5

21.2

1,040.6

94.2

68.7

30.0

Specialties

6

Gross Revenues Evolution(R$ million)

Pharmaceutical Distribution

Sales increased by 3.0% year-over-

year

Sales increased by 19.9% in

comparison with 3Q15

Sales increased by 3.7% year-over-

year

Accounting Consolidated Gross Revenues

pro forma Consolidated Gross Revenues: 3Q15 – 100% of Tamoio

and Specialties / 2Q16 and 3Q16 – 100% of Specialties

Retail

3Q15 2Q16 3Q16

1,072.2

238.9

1,311.2

1,149.6

207.6

1,357.3

1,162.8

204,5

1,367.3

0.7%

4.3%

Pharmaceutical Distribution Specialties(**) Retail

7

Gross Revenues Evolution(R$ million)

Accounting Gross Revenues

pro forma additional Gross

Revenues

(*) pro forma figures: 100% of Tamoio and Drogasmil / Farmalife

(**) pro forma figures: 100% of Specialties

3Q15 2Q16 3Q16 3Q15 2Q16 3Q16 3Q15(*) 2Q16 3Q16

1,010.4 1,003.2

3.7%

3.0%

201.4

246.5 241.5

-2.0%

19.9%

78.6

3.7%

112.4

191.0

198.1

-3.2%

1,040.6 204.8

8

Gross Profit(R$ million and % Net Revenues)

3Q163Q15 2Q16 3Q163Q15 2Q16

(*) pro forma data: 3Q15 – 100% of Tamoio and Specialties / 2Q16 and 3Q16 – 100% of Specialties

pro forma(*)

11.6%

108.2

17.8%

177.6

15.2%

154.1

17.6%14.0%

162.0

208.4

14.9%

177.7

9

Operating Expenses – SGA(R$ $ million and % Net Revenues)

3Q163Q15 2Q16 3Q163Q15 2Q16


11.5%

132.4

11.8%

139.9

11.7%

140.0

9.6%

12.0% 11.8%

90.2119.6 120.0

pro forma(*)

10

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

3Q163Q15 2Q16 3Q163Q15 2Q16


2.2%

21.0

5.4%

54.1

3.5%

35.4

2.5%

29.1

5.1%

60.2

3.3%

38.9

pro forma(*)

-34.7%

68.6%

-35.3%

33.8%

11

Net Profit(R$ million and % Net Revenues)

Net Profit

Adjusted Net Profit

pro forma Net Profit

pro forma Adjusted Net Profit


8.5

3Q15

(4.4)

-0.4% 0.6%-1.0%

2Q16

7.5

(12.2)(6.4)

3Q16

-0.7%0.8%

-0.9%

(9.5)

2Q16

(4.9)

1.0

16.0

-0.5%1.6%

0.1%

(2.9)

15.0

(0.1)

-0.3%1.3%

0.0%

3Q15 3Q16

pro forma(*)

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) The account was based on the average gross sale and CGS, excluding Specialties

division and Tamio’s chain

(5) The account was based on the average gross sale and CGS, excluding Specialties

division

Cash Cycle(Days)

Cash Flow Generated /

Used) in Operating Activities

Internal Cash Generation

Operating Assets Variation

Cash Flow (Used)

in Investing Activities

Cash Flow Generated /

(Used) by Financing Activities

Net Increase /

(Decrease) in Cash

12

Consolidated

Pro forma

Cash Cycle *

Accounts Receivable¹

Inventories²

Accounts Payable³

Consolidated Pharma PFS. Retail

3Q16 3Q15 3Q1652Q1653Q154 3Q163Q163Q16

69.6

19.8

49.8

(10.2)

(30.9)

28.4

58.2

18.5

39.7

(5.8)

(45.0)

7.4

40.2

63.1

52.1

51.235.4

44.5

54.1

63.2

44.3

71.2

60.5

55.2

15.3

63.8

39.4

39.746.3

56.7

42.3

52.7

46.7

46.3

56.4

55.9

13

Capex(R$ million)

Indebtedness: Net Debt and Net Debt /

EBITDA (R$ million)

Capex

3Q16OtherIT

Machinery and

Equipment3Q15 2Q16 3Q16

10.92.0

1.4

7.4

301.1

428.4

397.8

4.0x 3.8x

3.1x

Financial Data(R$ million and % Net Revenues)

3Q15 3Q163Q15 3Q163Q15 3Q163Q15 3Q16

15

EBITDA Margin

(%)

Op. Exp. SG&A

(%)

Gross Margin

(%)

Gross Revenues

(R$ million)

3.3

2.4

7.77.4

10.5

9.6

1,040.6

1,010.4

17

Financial Data (*)

(R$ million and % Net Revenues)

3Q15 3Q163Q15 3Q163Q15 3Q163Q15 3Q16

EBITDA Margin

(%)

Op. Exp. SG&A

(%)

Gross Margin

(%)

Gross Revenues

(R$ million)

(*) Basis 100%

0.9

3.0

9.08.9

10.6

12.0

241.5

201.4

19(*) 3Q15 pro forma figures: 100% of Tamoio

Financial Data(R$ million and % Net Revenues)

3Q15* 3Q163Q15* 3Q163Q15* 3Q163Q15* 3Q16

EBITDA Margin

(%)

Op. Exp. SG&A

(%)

Gross Margin

(%)

Gross Revenues

(R$ million)

3.6

1.3

25.8

26.9

30.3

29.2

198.1

191.0

20

Total Sales Growth(%)

SSS Mature Stores(%)

Same Store Sales(%)

Monthly Average

Store's Sales (mature)(R$ thousand)

(*) 3Q15 pro forma figures: 100% of Tamoio

3Q15 3Q162Q16 3Q15 3Q162Q163Q15 3Q162Q16 3Q15 3Q162Q16

3.7%

10.5% 10.8 %

-6.8 p.p.

-7.0 p.p.

5.3%

2.5%

8.5%

-2.8 p.p.

-6.0 p.p.

6.0%

3.9%

11.1%

-2.1 p.p.

-7.2 p.p.

564.0589.7

550.2

2.5%

-4.4%

21

2 Opening

1 Close-downs

2 Reformulated

103 Mature

Average Ticket(R$)

# of Stores(units)

(*) 3Q15 pro forma figures: 100% of Tamoio

3Q15 3Q162Q163Q15 2Q16 3Q16

34,07

35,8335,82

5.2%

0.0%

128129

130

1.6%

0.8%

23

Company Analyst Telephone E-mail

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

BTG Pactual Rodrigo Gastim +55 (11) 3383-2468 [email protected]

BofA Merrill Lynch Roberto Otero +55 (11) 2188-4119 [email protected]

Eleven Financial Raul Grego Lemos +55 (11) 4302-3340 [email protected]

J.P. Morgan Joseph Giordano +55 (11) 4950-3020 [email protected]

Votorantim Paulo Prado +55 (11) 5171 5625 [email protected]

Max Fischer - CFO e IRO & Beatriz Diez - IRM

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

Investor Relations

Profarma - 3Q16 earnings release