Divulgação de resultados 2Q14

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


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)


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%



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 (*)



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 (*)



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 (*)



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


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


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


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


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%


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 [email protected]

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

BTG Pactual João Carlos dos Santos +55 (11) 3383-2384 [email protected]

Credit Suisse Marcel Moraes +55 (11) 3841 6302 [email protected]

HSBC Luciano Campos +55 (11) 3371 8194 [email protected]

Itaú BBA Juliana Rozenbaum +55 (11) 3073 3040 [email protected]

Merrill Lynch Mauricio Fernandes +55 (11) 2188 4236 [email protected]

Morgan Stanley Javier Martinez de Olcoz +55 (11) 3048 6088 [email protected]

Votarantim Andre Parize +55 (11) 5171 5870 [email protected]

Max Fischer | CFO and IRO & Beatriz Diez | IR Manager

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

Business

Divulgação de resultados 2Q14