Profarma 2Q12

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Profarma Overview

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Profarma makes herein statements about future events that are subject to risks and uncertainties. Such statements are based on the beliefs and estimations of the

Company’s Management and information to which it currently has access. Statements about future events include information regarding our present intentions,

beliefs or expectations, as well as those of the members of the Company’s Board of Directors and Executive Officers’ Committee. The qualifications in relation to

statements and forward-looking information also include information regarding potential or presumed operating results, as well as statements that are preceded or

followed by or include the words "believe", "may", "will", "continue", "expect", "forecast", "intend", "plan", "estimate" or similar expressions. The forward-looking

statements and information are not guarantees of performance. They are subject to risks, uncertainties and beliefs because they refer to future events, thus

depending on circumstances that may or may not materialize. Future results and creation of value for shareholders may differ to a material degree from those

expressed or suggested by statements in relation to the future. Many of the factors that determine such results and amounts are beyond Profarma’s ability to control

or predict matters.

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Period Highlights

Gross Revenues Increase

Ebitda Increase

Arpmed Acquisition

Prodiet Revenues and Ebitda

Margin Increase

Positive Cash

Generation

Growth of Generic

Sales

Net Profit Increase

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ArpMed Acquisition

2Q12 Results

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ArpMed Acquisition

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Established in 1998, ArpMed focuses on special, higher value-added pharmaceuticals by means of two

complementary business units that provide services for industries dealing with specialties.

Business Units:

Distinct Features:

• It is possible to reduce the number of steps in the distribution process (Manufacturer–Points of Sale–Client), thus speeding

it up, reducing costs and increasing margins;

• Supply can be optimized through an automatic replenishment policy;

• Delivery at home or doctors’ offices provides comfort and convenience for clients;

• All the steps in the logistics process comply with the regulations of ANVISA [Brazilian National Health Surveillance Agency

• Each unit sold is tracked;

• The Company’s relationship with laboratories and nutrition industry companies provides a solid basis to increase volumes

and launch new high value-added products.

Management, logistics, sale and marketing solutions for special, niche high-cost cold-chain products or Rx

products that need to be repositioned or require market information

Sales

Services and Consulting

Synergy

ArpMed | Company Overview

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The Company:

• ArpMed already serves several Brazilian and international laboratories.

• It focuses on the segment of high-priced prescription medication (average ticket upwards of R$600.00).

• It specializes in products that require specific procedures, and follow-up and support services.

• It has a sound product portfolio, comprising fertility, ophthalmology and oncology products; breast implants; hearing aids

and diabetes medicines among others.

• It has a tradition in providing ancillary services for the industry and is, therefore, a solution to manage the channel as a

whole and serves as a reference for laboratories.

• 53% of its gross revenues come from sales with ancillary services.

• New contracts are being negotiated.

Suppliers:

• Laboratories need a logistics partner able to offer a different system from that used for conventional products.

• Even though profitable, the distribution of these products is a complex process due to the volume (low amounts: 2,000-

5,000 products for the whole country), the careful handling required by the product, the dispersal of users, and the follow-up

and tracking processes involved.

ArpMed | Company Overview

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Laboratories Patients

Doctors and

Clinics

Structure

- Cold Chain

- Experienced Pharmaceutical Team

- Approved packaging process

- Process complying with the standards in effect

- Regular internal and independent audit

Distribution Storage Receipt

ArpMed | Flow of Operations

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ArpMed | Specialties and Operational highlights

Specialties

• 121,000 orders in 2011

• Average ticket upwards of R$600.00

• 260 sold items

• About 170 employees

Operational Highlights Geographical Coverage

Sales through Own Call Center - % Sales with Ancillary Services - %

54%

Through

Call Center

46%

Others 53%

W/

Service

47%

W/o

Service

Sales

• Plastic Surgery (breast implants)

• Dermatology

• Endocrinology (hormones and insuline)

• Gynecology

• Ophthalmology

• Orthopedics

• Rheumatology

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Leadership

Growth

Potential

Synergy

Experience

• One of the leading companies in direct sale of specialty and high-cost medications

• Strong presence in the Southeast Region, and competing for leadership in São Paulo and Rio de

Janeiro and

• Present in several states through a network of partner companies

• A 24% year-over-year increase in 2011

• Planned growth in existing markets

• New markets

• Increased amount of purchases, which allows improving the relationship with manufacturers

• Synergies in the administrative and operational areas

• Mr. Guilherme Porto and Mr. Guilherme Rocha have each over 10 years’ experience in the

industry and

• Both executive management and the consolidated management structure will be strengthened.

ArpMed | Drives for the Transaction

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Primary Offer:

• 40% paid on Execution Date

• 30% paid one year after the Execution Date

• 30% paid two years after the Execution Date

Secondary Offer:

• 50% paid on Execution Date

• 50% paid 12 monthly installments from the Execution Date.

Earn-out:

• Payment of an additional secondary offer in the first three years, based on EBITDA and the Cash Cycle.

Payment Schedule

Contingency Coverand

• ArpMed’s current shareholders will be liable for all contingencies arising from taxable events prior to the Execution Date.

Description of Guarantees:

• Capital Stock Adjustment via Subscription Bonus, Escrow Account and Retained Payments.

Contingency Cover and Description of Guarantees

ArpMed | Acquisition Model

Acquisition of an 80% stake in Arpmed’s total capital stock.

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Operational Efficiency Relationship with

Manufacturers

New Segments New Business

Opportunities

ArpMed | Sinergy Gains

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2Q12 Results

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2Q11 1Q12

954.5

779.4

2Q12

919.5

Financial Numbers | 2Q12 Results

Branded

Generic

OTC

Health and Beauty Products

Hospitals and Vaccines

Total

2Q12

517.2

66.3

132.5

67.9

135.6

919.5

2Q11

512.2

45.7

141.3

53.9

26.3

779.4

Chg. %

1.0%

45.0%

-6.3%

26.1%

416.7%

18.0%

1Q12

552.7

93.7

126.3

69.1

112.7

954.5

Chg. %

-6.4%

-29.3%

4.9%

-1.8%

20.4%

-3.7%

(R$ million)

Gross Revenues Evolution Gross Revenues Breakdown

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Gross Profit

Revenues from Services to Suppliers

Gross Profit Margin(%)

2Q11

27.4

42.9

10.7% 12.4% 10.2%

1Q12

37,8

45.0

2Q12

42.0

52.8

2Q11 2Q12

64.5

8.4% 7.5%

49.5

1Q12

61.1

7.5%

(R$ million and % Net Revenues)

Gross Profit and Revenues from Services

to Suppliers

Operating Expenses - SGA

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Ebitda and Ebitda Margin

2Q11 2Q12

31.2

2.5%

4.1%

20.7

1Q12

20.2

3.2%

2Q12

10.5

2Q11

8.8

1Q12

7.2

Net Financial Expenses

1.3% 1.4%

0.9%


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Net Profit

2Q12

12.4

2Q11

9.5

1Q12

9.5

1.6% 1.4% 1.2%


* Average

(1) Average of Gross Revenues in the Quarter

(2) Average of COGS in the Quarter

(3) Average of COGS in the Quarter

Cash Cycle - Days *

Accounts Receivable (1)

Inventories (2)

Accounts Payable (3)

2Q12

59.1

47.4

48.9

37.1

1Q12

54.6

50.7

49.7

45.8

2Q11

60.4

39.4

53.1

32.0

Cash Cycle


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2Q12

18.2

30.5

(12.3)

52.7

34.2

(93.5)

(5.7)

(2.7)

(4.2)

11.3

2Q11

50.0

19.8

30.2

37.3

46.3

(48.7)

(4.6)

(1.8)

(51.0)

(2.8)

Chg. %

-63.6%

53.7%

-

41.3%

-26.0%

-91.9%

-23.2%

-51.1%

91.8%

-

1Q12

(72.2)

20.0

(92.3)

(64.5)

(13.0)

(11.1)

(3.7)

(1.7)

61.6

(12.3)

Chg. %

-

52.0%

86.7%

-

-

-741.3%

-53.7%

-63.4%

-

-

Summary of Cash Flow


(R$ Million)

Cash Flow Generated / (Used) in Operating Activities

Internal Cash Generation

Operating Assets Variation

Trade Accounts Receivable

Inventories

Suppliers

Other Items

Cash Flow (Used) in Investing Activities

Cash Flow Generated / (Used) by Financing Activities

Net Increase / (Decrease) in Cash

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Indebtedness: Net Debt and Net Debt / Ebitda

2Q12

202.0

2.2x 2.3x

2Q11

157.1

1Q12

197.2

2.1x

Capex

2Q12

2.9

0.2% 0.3%

2Q11

1.9

1Q12

1.7

0.4%



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Stock Performance

Ibovespa (1)

IGC (1)

Share Price

03/30/12

Preço da Ação

06/29/12

Note (1): Comparative evolution in Index base points

R$ 10.10 54,355 6,992

Chg. (%) 4.0% -15.7% -8.2%

Shares - Comparative Performance

R$ 9.71 64,511 7,613


104

84

100

92

Turnover (R$) PFRM 3 PFRM3 IBOV IGCX

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Company Analyst Telephone E-mail

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

Banco Fator Iago Whately (55 11) 3049-9480 [email protected]

Raymond James Guilherme Assis (55 11) 3513-8706 [email protected]

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

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

Javier Martinez Cerdan (1 212) 761-4542 [email protected] Morgan Stanley

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

Marco Richieri (55 11) 5171-5873 [email protected] Votorantim

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

2Q12 Results | Analyst Coverage

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Max Fischer | CFO and IRO

Beatriz Diez | IR Manager

www.profarma.com.br/ir

Telephone.: 55 (21) 4009-0276

E-mail: [email protected]

Market

Maker:

Ticker

BM&FBOVESPA:

independent

Auditors:

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IR Contacts

Max Fischer | CFO and IRO

Beatriz Diez | IR Manager

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