4 q12 results presentation
TRANSCRIPT
FY2012 / 4Q12
March 28, 2013
Earnings Release
2012 HIGHLIGHTS
2
Gross revenues of R$3,094.3 million, an increase of 20.9% over 2011.
Gross margin of 30.6% in line with our expectations
Adjusted net income of R$70.1 million
Adjusted EBITDA margin of 6.2%, against 6.1% in 2011
Opening of 96 new owned stores in 2012
Adjusted EBITDA of R$191.0 million, an increase of 23.0% over 2011
Total SSS (same-store sales) in the year of 14.1%, with 8.2% for mature stores
RESULTS
TIMELINE
Acquisitions: Big Ben and Sant’ana
Debentures Issuance
Inauguration of the SSC
Beauty’in acquisition
1,000 stores milestone
Follow-on
Big Ben & Guararapes Integration
Inauguration of 2 Distribution Centers
Sant’ana’s corporate restructuring
2012 Integration Schedule completed
3
North 117
Northeast 251
Midwest 130
Southeast
South 210
REGIONS
Owned Stores
12
1
114 20
15
25
13
201
7
78
118
1
9
248 Owned stores¹
118 lOwned stores
132 Owned stores
388 Franchises
210 Owned stores
05 Distribution Center
Footprint
708 Owned stores
388 Franchises
92
1- Includes 38 stores of the Guararapes platform.
2
1,096 stores
OUR OWNED STORE PLATFORMS AND
FRANCHISES
13.6%
17.2%
12.3%56.9%
Stores with less than 12 months
Stores with 12 to 24 months
Stores with 24 to 36 months
Stores with more than 36 months
Owned stores base evolution
Owned Stores by Maturation Stage
4
29 openings in 4Q12
96 openings in 2012
43.1% of our store-count not yet at a mature stage
1- Includes 38 stores of the Guararapes platform.
STORE OPENING AND MATURATION PROFILE
132
210
118
248
249
96 29
15 2
2011 Aquisição Cresc. orgânico Fechamento Cresc. orgânico Fechamento 2012
132
210
118
248
249
96 29
15 2
2011 Aquisição Cresc. orgânico Fechamento Cresc. orgânico Fechamento 2012
1
132
210
118
248
249
67 29
132
2011 Acquisition Organic growth Closing 9M12 Organic growth Closing 2012
378
681708
132
210
118
248
249
67 29
132
2011 Acquisition Organic growth Closing 9M12 Organic growth Closing 2012
378
681708
132
210
118
248
249
67 29
132
2011 Acquisition Organic growth Closing 9M12 Organic growth Closing 2012
378
681708
132
210
118
248
249
67 29
132
2011 Acquisition Organic growth Closing 9M12 Organic growth Closing 2012
378
681708
132
210
118
248
249
67 29
132
2011 Acquisition Organic growth Closing 9M12 Organic growth Closing 2012
378
681708
378
708
719.0 843.7
2,558.4
3,094.3
4Q11 4Q12 2011 2012
719.0 843.7
2,558.4
3,094.3
4Q11 4Q12 2011 2012
719.0 843.7
2,558.4
3,094.3
4Q11 4Q12 2011 2012
719.0 843.7
2,558.4
3,094.3
4Q11 4Q12 2011 2012
ANALYSIS OF RESULTS Gross Revenues
(R$ Million)
Same Store Sales (SSS) - Total and Mature Stores
(%)
5
+17.3%
+20.9%
8.6%
12.0%
9.8%
14.1%
5.7% 5.2%6.6%
8.2%
4Q11 4Q12 2011 2012
10.0%
12.4%
8.6% 8.6%
16.2%
13.8%15.1%
12.0%
5.8%
8.9%
6.1% 5.7%
12.1%
9.1%7.8%
5.2%
1Q11 2Q11 3Q11 4Q11 1Q12 2Q12 3Q12 4Q12
SSS Total SSS mature stores (36 months or above)
8.6%
12.0%
9.8%
14.1%
5.7% 5.2%6.6%
8.2%
4Q11 4Q12 2011 2012
10.0%
12.4%
8.6% 8.6%
16.2%
13.8%15.1%
12.0%
5.8%
8.9%
6.1% 5.7%
12.1%
9.1%7.8%
5.2%
1Q11 2Q11 3Q11 4Q11 1Q12 2Q12 3Q12 4Q12
SSS Total SSS mature stores (36 months or above)
29.4
30.7
29.5
30.5
4Q11 4Q12 2011 2012
Generic penetration in medicine sales
36.7% 37.4%
16.7% 16.7%
46.6% 45.9%
2011 2012
Non-medicines
Generic Medicine
Branded medicine
SALES MIX AND AVERAGE TICKET Average Ticket
(R$)
Sales Mix
(%)
6
Generic penetration in medicine sales
+4.4% +3.4%
29.4
30.7
29.5
30.5
4Q11 4Q12 2011 2012
Generic penetration in medicine sales
36.7% 37.4%
16.7% 16.7%
46.6% 45.9%
2011 2012
Non-medicines
Generic Medicine
Branded medicine
29.4
30.7
29.5
30.5
4Q11 4Q12 2011 2012
Generic penetration in medicine sales
36.7% 37.4%
16.7% 16.7%
46.6% 45.9%
2011 2012
Non-medicines
Generic Medicine
Branded medicine
29.4
30.7
29.5
30.5
4Q11 4Q12 2011 2012
Generic penetration in medicine sales
36.7% 37.4%
16.7% 16.7%
46.6% 45.9%
2011 2012
Non-medicines
Generic Medicine
Branded medicine
29.4
30.7
29.5
30.5
4Q11 4Q12 2011 2012
Generic penetration in medicine sales
36.7% 37.4%
16.7% 16.7%
46.6% 45.9%
2011 2012
Non-medicines
Generic Medicine
Branded medicine
GROSS PROFIT Gross Profit and Gross Margin (% of Gross Revenues)
(R$ Million)
7
Procurement Department Integration
Inauguration of the new distribution center in Camaçari, state of Bahia
Drivers
226.8 211.0 224.5 247.1 265.3
31.5% 30.2% 30.1% 30.7% 31.5%
4T11 1T12 2T12 3T12 4T12
801.5
948.0
31.3% 30.6%
2011 2012
Sales Mix
7
Trade Marketing
SG&A EXPENSES
8
Selling, General and Administrative Expenses (SG&A)
(R$ Million)
G&A Dilution
4Q11 1Q12 2Q12 3Q12 4Q12 2011 2012
Proforma Proforma Proforma Proforma
Gross Revenues 719,032 699,349 746,855 804,393 843,697 2,558,435 3,094,293
General and administrative expenses (48,731) (51,464) (51,889) (50,123) (53,065) (188,432) (206,540)
% Gross Revenues 6.8% 7.4% 6.9% 6.2% 6.3% 7.4% 6.7%
G&A Dilution (R$'000)
48.7 53.1
188.4 206.5134.5 156.8
457.8550.4
183.2 209.8
646.2
756.9
4Q11 4Q12 2011 2012
General & Administrative Sales expenses
6.8% 6.3% 7.4% 6.7%
18.7% 18.6% 17.9% 17.8%
25.5% 24.9% 25.3% 24.5%
4Q11 4Q12 2011 2012
G&A % Sales expenses % SG&A total %
48.7 53.1
188.4 206.5134.5 156.8
457.8550.4
183.2 209.8
646.2
756.9
4Q11 4Q12 2011 2012
General & Administrative Sales expenses
6.8% 6.3% 7.4% 6.7%
18.7% 18.6% 17.9% 17.8%
25.5% 24.9% 25.3% 24.5%
4Q11 4Q12 2011 2012
G&A % Sales expenses % SG&A total %
Adjusted EBITDA and Adjusted EBITDA Margin (% of Gross Revenues)
(R$ Million)
ADJUSTED EBITDA AND ADJUSTED NET
PROFIT
Adjusted Net Profit (R$) and Adjusted Net Margin (% of Gross Revenues)
(R$ Million)
9
43.655.5
155.4
191.0
6.1%
6.6%
6.1% 6.2%
03%
04%
04%
05%
05%
06%
06%
07%
07%
4Q11 4Q12 2011 2012
28.8
8.8
92.2
70.1
4,0%
1,0%
3,6% 2,3%
-8,9%
-6,9%
-4,9%
-2,9%
-0,9%
1,1%
3,1%
4Q11 4Q12 2011 2012
DEBT & CASH CYCLE Debt (R$ Thousand)
Cash Cycle
(Days)
10
Working capial 4Q11 3Q12 4Q12
Accounts receivable 21 24 23
Inventories 114 95 95
Suppliers 62 49 58
Working capital in days 72 70 60
Cash position and indebtedness (R$'000) 3Q11 4Q11 3Q12 4Q12
(+) Loans and financing 70,788 64,374 149,124 177,049
Short term 22,968 22,367 43,953 83,229
Long term 47,820 42,007 105,171 93,820
(+) Debentures 260,759 253,642
Short term 12,461 5,237
Long term 248,298 248,405
(+) Accounts payable for investment acquisition 70,387 54,380 333,591 345,333
Short term 17,701 17,692 97,971 99,711
Long term 52,686 36,688 235,620 245,622
(=) Total Indebtedness 141,175 118,754 743,474 776,024
Short term (%) 28.8% 33.7% 20.8% 24.2%
Long term (%) 71.2% 66.3% 79.2% 75.8%
(-) Cash and cash equivalents (324,001) (263,555) (404,783) (368,751)
(=) Net Debt (182,826) (144,801) 338,691 407,273
Net debt/Adjusted EBITDA (LTM) n/a n/a 1.9 X 2.1 X
7001208
356
135
Others Working Capital Acquisition Capex Total
135822
1028
67
Others DC/Logistics SAP Reform Organic growth Capex
CAPEX (R$ Million)
11
CAPITAL ALLOCATION (R$ MILLION)
CAPEX & CAPITAL ALLOCATION
CASH FLOW
(R$ Thousand)
12
Cash flow Statement (R$'000) 4Q11 4Q12 2011 2012
EBT 686 (13,330) 19,035 13,359
(+) Depreciation and amortization 9,297 20,815 25,494 62,542
(+) Others 1,866 (22,017) 8,988 32,267 - - Operating cash generation 11,849 (14,532) 53,517 108,168
(+) Change in working capital (11,739) 5,770 (117,331) (208,285)
(+) Change in other non current assets and liabilities (18,082) (22,560) (39,295) (64,545) - #REF!
Cash consumption (29,821) (16,791) (156,626) (272,830) -
Net cash generated by operating activities (17,972) (31,322) (103,109) (164,662)
(-) Capex from operations (18,146) (38,849) (77,618) (135,224)
(-) Acquisitions (16,884) (7,693) (230,289) (356,051)
Net Cash from investing activities (35,030) (46,542) (307,907) (491,275)
(+/-) Loans and financing (6,926) 41,344 (73,863) 279,957
(+) Equity funding (518) 487 729,674 481,176
Net Cash from financing activities (7,444) 41,831 655,811 761,133
Change in cash and cash equivalents (60,446) (36,033) 244,795 105,196
Cash and cash equivalents - opening balance 324,001 404,783 18,760 263,555
Cash and cash equivalents - closing balance 263,555 368,751 263,555 368,751
13
September 2012
March 2012
2012 Schedule 100% completed
December 2012
ADMINISTRATIVE INTEGRATION: SSC
2014
COMMERCIAL INTEGRATION: PROCUREMENT
14
August 2012 November 2012 December 2012 2014
2012 Schedule 100% completed
COMMERCIAL INTEGRATION: LOGISTICS
15
• Jaboatão dos Guararapes, PE • 13,000 Sku’s • Storage area of 3,240 m²
• Belém, PA • 50,000 Sku’s • Storage area of 10,800 m²
• Brasília, DF • 13,000 Sku’s • Storage area of 4,800 m²
• Camaçari, BA • 15,000 Sku’s • Storage area of 9,000m² • Canoas, RS
• 12,000 Sku’s • Storage area of 5,600 m²
Distribution center inaugurated in 2012
COMMERCIAL INTEGRATION: TRADE
MARKETING
Gondola point: clusterizing stores by
customer profile to maximize potential of
product exposure
Dermocosmetics space to display
Premium products
Check-out display: high turnover products
to encourage impulse purchases
Category management : intelligence
organization depending on consumption drive
16
17
New employee Integration Program
Etics code
Integration event
Climate working place survey
Culture Brazil Pharma Roadshow
Store visit with the Company Leaders
Team development
Culture
OPERATIONAL INTEGRATION: TRAINING
Over 58,000 employees trained in 2012
Over 412,000 hours of training in 2012 ( an average of
26 hours of training per employee in 2012)
Over 615,000 hours of training expected in 2013
(+50% vs 2012)
2012
52 new franchises
42 new franchisees
Presence in more than 150 cities
Organic expansion towards Northeast region
FARMAIS
358 359
388
2010 2011 2012
EVOLUTION OF FARMAIS STORE BASE
FARMAIS EXPANSION
18
6.2 8.9 7.8
10.4 10.3 9.2 7.9 9.2 10.8
15.1 18.5 18.9
22.8 21.3
18.1
14.6 14.0 15.6 14.8
11.8 8.8 7.5
21
11.4
16.2 14.2
19.2 18.9 16.6
14.1 16.2
18.6
24.6
30.4 29.8
37.5 34.8
29.9
24 22.9
26.3 23.8
21.1 18.8
0
10000
20000
30000
40000
50000
19
87
19
88
19
89
19
90
19
91
19
92
19
93
19
94
19
95
19
96
19
97
19
98
19
99
20
00
20
01
20
02
20
03
20
04
20
05
20
06
20
07 0
500
1000
1500
2000
2500
3000
3500
4000
4500
5.8 6.2 6.0 6.3 6.5 5.8 5.8 8.5 9.3
13.9 19.2
11.8 15.2
11.8 6.7 8.3
10.6 9.0 9.5 11.4 7.1 7.0
9.9 11.0 10.4 12.0
34.0
11.7 12.4 12.3
26.7 30.7
45.6
25.7
33.3
19.0 14.3
17.5 21.9
19.1 18.0 19.2
11.8 12.3
0
10000
20000
30000
40000
50000
60000
0
1000
2000
3000
4000
5000
6000
7000
EBITDA
(U$'000)
Fonte: IMS Health; CVS research estimates.
BRAZIL: USA 15 YEARS AGO...
MKT CAP
(U$'000)
Drivers
SSS double digits
Acquisitions
Organic growth
National Footprint
Generics WAG
CVS
PBM
5,8 6,2 6,0 6,3 6,5 5,8 5,88,5 9,3
13,9
19,2
11,8
15,2
11,8
6,78,3
10,69,0 9,5
11,4
7,1
7,0
9,9 11,0 10,412,0
34,0
11,7 12,4 12,3
26,7
30,7
45,6
25,7
33,3
19,0
14,3
17,5
21,919,1
18,019,2
11,8 12,3
0,0
10000,0
20000,0
30000,0
40000,0
50000,0
60000,0
198
7
198
8
198
9
199
0
199
1
199
2
199
3
199
4
199
5
199
6
199
7
199
8
199
9
200
0
200
1
200
2
200
3
200
4
200
5
200
6
200
7
market cap EV/EBITDA P/E
0,0
1000,0
2000,0
3000,0
4000,0
5000,0
6000,0
7000,0
CVS CAREMARK
EBITDA
19
BRPH & SECTOR MOMENTUM
20
Gains of scale and eficiency
Regulation in favour of formal players
Greater population insertion in our regions
Market Growth
Higher competition
Cost pressures
STRATEGIC PILLARS
Operational
Efficiency
Market
Consolidation
Organic Growth
Differentiation
60
80
100
120
140
160
180Ja
n-1
2
Feb
-12
Mar
-12
Ap
r-1
2
May
-12
Jun
-12
Jul-
12
Au
g-1
2
Sep
-12
Oct
-12
No
v-1
2
Dec
-12
Brazil Pharma
IBOV
CAPITAL MARKETS BPHA3
170
107
21
Source: Bloomberg, December 31, 2012
Shares outstanding
Price (R$/share) 2012 Perfomance
Ibovespa Index
Performance since IPO Ibovespa Index
Market Cap
Average Daily Volume (R$ Million)
254,649,970
R$14.40
69.5%
7.4%
67.1%
-0.1%
3.7 Billion 5.4 Million
BPHA3 12.31.12 Market closure
22
IMPORTANT NOTE
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.
Renato Lobo
Investor Relations Director
Otavio Lyra
Investor Relations Manager
Marina Sousa
Investor Relations Coordinator
Daniel Alves
Investor Relations Analyst
Phone: +55 (11) 2117- 5299
E-mail: [email protected]
Website de RI: www.brph.com.br
23
IR CONTACT