Bradesco ceo conf brph_presentation (26 11 12)
Transcript of Bradesco ceo conf brph_presentation (26 11 12)
Brazil Pharma
Bradesco CEO Conference - New York
November 2012
The Opportunity
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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 Industry from 1996-2011 (R$ Billion)
Industry Performance A Growth and Accelerating History…
Source: IMS.
Drivers Micro Timing
Regional Brands Fragmented Formalization
Drivers Macro
Income Growth Population Aging Generics Drugs
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Brazil Pharma vs Competitors (2011)
Competitors Focus
Drugstores per region (2011)
More dense
Less dense
Market Growth - CAGR (2007-2011)
Geographic Concentration … still concentrated in the Southeast
There is low competition on the regions outside the Southeast.
Source: IMS.
The Company
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86
Brazil Pharma footprint and clusters
North 109
Northeast 244
Midwest 121
Southeast
South 207
REGIONS Owned stores
10
1
108 20
15
21
11
198
7
75
116
1
9
237 Owned stores
116 Owned stores
121 Owned stores
369 Franchises
207 Owned stores
05 Distribution centers
Footprint 1,050 Stores
89
Source: Brazil Pharma
National Footprint Largest drugstore chain outside the Southeast…
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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
Drugstore ranking per Region
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)
Strong Local Knowledge … With a leadership position in four out of five regions…
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Strong Organic Growth Capacity
Organic Growth (# owned stores)
Brazil Pharma Abrafarma
Branded Generics HPC
Profitable Sales Mix
(3Q12)
Geography: More Growth and Less Competition
(CAGR07’-11’)
Maturation of Owned Stores
(3Q12)
Brazil Pharma competitive advantages
Competitive Advantages … Taking benefits of this.
Source: Brazil Pharma and IMS.
333
90
95
109 54 681
2009 3Q12Openings 2011
Openings 9M12
Openings 2010
Openings 2009
14.2%
17.2%
13.7%
54.9%
Stores < 12 months
Stores > 12 < 24 months
Stores > 24 < 36 months
Stores > 36 months
64.9%28.5%
11.7%
37.1%
45.9%
17.0%
Performance
Since IPO
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Footprint at and 12 months later the IPO
663 Points of sale 302 Owned Stores
361 Franchises
Platform @ IPO Actual Platform
207 Owned stores
369 Franchises
237 Owned stores
121 Owned stores
116 Owned stores
1,050 Points of sale 681 Owned stores
369 Franchises
89 Owned stores
60 Owned stores
153 Owned stores
361 Franchises
(1) Sant’Ana’s Distribution Center caught fire on December 2011. A new distribution center was inaugurated on November, 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 9M12.
1
(1Q11) (3Q12)
Distribution Center
Owned stores
Franchises
Increasing Footprint Since IPO Strong delivery since the IPO…
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28.3 29.9 30.5 28.8 31.4 31.3
1Q11 2Q11 3Q11 1Q12 2Q12 3Q12
10.0%12.4%
8.6%
16.2%13.8% 15.1%
1Q11 2Q11 3Q11 1Q12 2Q12 3Q12
5.8%8.9%
6.1%
12.1%9.1% 7.8%
1Q11 2Q11 3Q11 1Q12 2Q12 3Q12
Strong historical sales growth and same-store sales (SSS)
Sales Profile
Sales Mix1
(% of Gross Revenues)
Average Ticket1
(R$)
(1) Proforma information, except when otherwise indicated.
Same-Store Sales1
(Total - %)
(Mature Stores - %)
31.6% 37.5% 36.5% 37.1%
47.5% 46.1% 46.4% 45.9%
21.0% 16.4% 17.1% 17.0%
2011 (Non-proforma)
1Q12 2Q12 3Q12
Non-Medicine Branded Generics
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Financial Highlights
Gross Profit and Gross Margin1
(R$ Million | % of Gross Revenues)
Adjusted Net Profit and Adjusted Net Margin1,3
(R$ Million | % of Gross Revenues)
Adjusted EBITDA and EBITDA Margin1,2
(R$ Million | % of Gross Revenues)
Gross Revenues¹
(R$ Million)
(1) As of September 30th, 2012, on a proforma basis; (2) Adjusted Ebitda - excludes non-recurring expenses ; (3) Adjusted Net Profit - excludes non-recurring expenses, brand and intangible
assets amortization and non-recurring IR & Social Contribution effect.
673.6 719.0 699.3 746.8 804.4
3Q11 4Q11 1Q12 2Q12 3Q12
211.3 226.8 211.0 224.5 247.1
31.4% 31.5% 30.2% 30.1% 30.7%
3Q11 4Q11 1Q12 2Q12 3Q12
44.0 43.6 36.9 46.3 52.3
6.5% 6.1%5.3%
6.2% 6.5%
3Q11 4Q11 1Q12 2Q12 3Q12
23.9 32.010.1
24.3 26.9
3.6% 4.4%
1.4%3.3% 3.3%
3Q11 4Q11 1Q12 2Q12 3Q12
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Incresing operational efficiency and stores productivity
Source : Brazil Pharma ; Notes: (1) Considers total stores and distribution centers employees ; (2) Considers total employees (store, distribution centers and administrative).
3.7 7.4
22.6 19.7
BRPH @ IPO (1Q11)
34,4 51.3
BRPH 3Q12
1.5 3.8
-13%
+100%
+153%
+49%
Store EBITDA / employee1
(R$ thousand)
# of store employees
per store
Sales per store / employee
(R$ thousand)
EBITDA / employee2
(R$ thousand)
Operational Performance Since IPO … not only in growth, but also on the performance
3.8 3.6 -5% # of administrative + distribution
center employees per store
Stores Performance
Administrative Performance
Focus on Integration
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Great regional companies into a Excellent National Company
2012 2013E 2014E 2016E2015E1945 1965 1975 1994
IPO
1994 2009 20111995
186 years of
History
Brazil Pharma History 186 accumulated years of experience…
Source: Brazil Pharma
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Dream
Mission
People
• To be the best Drug Store Chain in the country helping create a healthier world
• Provide health and well-being for our customers
• Create Long-term partnerships with our suppliers
• To have 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
Source: Brazil Pharma
One Company, One Culture … becoming just one Company…
Our dream is what moves our People
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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
Corporate Structure … With a simple and aligned structure …
Source: Brazil Pharma
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Operationally Integrated … becoming 100% integrated
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.
Source: Brazil Pharma
Peers
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179.1
318.9
6.0%5.9%
BRPH RD
730.3
1,113.524.6%
20.6%
BRPH RD
909.4
1,432.430.6%
26.5%
BRPH RD
681
828
1 2
Brazil Pharma: Comparing With Peers¹ Solid track record, with improvements to come on maturation and integration
LTM 3Q12 EBITDA¹ and EBITDA Margin
(R$ Million, % of Gross Revenues
LTM 3Q12 Selling, General, Administrative and
Other Expenses¹ and % of Gross Revenue
(R$ Million | % of Gross Revenues)
LTM 3Q12 Gross Profit and Gross Margin
(R$ Million | % of Gross Revenues)
Stores (as of September 30th, 2012)
1- Adjusted figures according to each company’s criteria.
Farmais
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Why to expand the footprint?
# Stores by Sales
category
Average sales of
each store
R$
thousand/month
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
Market size
64,281
Stores
Market size
R$ 37,437
million
Appendix Company’s Structure
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Shareholder’s Structure
BTG Pactual + FIPs Managers Operating Partners Free Float
35.7% 38.7% 19.6% 0.4%
100% 100% 100% 100% 100% 100%
Note: As of November, 2012
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Remaining Lock-up Period
Note : Rosario’ s familly does not have lock-up (1) After the 3 years lock-up shareholders have the right to sell all stake (2) Shareholder have the right to sell up to 1/3 of the shares every
year after the first anniversary (June, 2011).
2011 2012 2013 2014 2015 2016
Feb/2012 Feb/2015
Mar/2012 May/2015
Jun/2011 Jun/2014
Jun/2011 Jun/2014
1
2
1
1
Oct/2012
Shares: 2,250,974
% Shares: 0.9
Shares: 7,864,262
% Shares: 3.1
Shares: 15,000,000
% Shares: 5.9
Shares: 23,840,957
% Shares: 9.4
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Experienced Management
Logistic
Jadir Tavares
Procurement
Renato Stefanoni
Trade Marketing
Rovilson
Apolinário
Operations – N/NE
Ricardo
Kitamura
Operations – NE
(Bahia)
Wesley Barbosa
Operations - MW
Emílio Azevedo
Operations - S
Delmar
Raguzzoni
IT
Rogério Segala
SSC
Juliana Amaral
Commercial Integration
Carlos Dutra
Operations Integration
Rodrigo Silveira
Management – SSC Integration
Flávio Sanchez
Fronts of Integration
Experienced Management
Experience in retail / pharmaceutical industry
33 years 20 years 7 years
20 years
18 years 12 years 12 years 10 years 20 years 20 years
16 years 19 years
Appendix
Operations
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Trade Marketing Constantly working on improving consumption experience...
Non-renovated store
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Renovated store
Trade Marketing Constantly working on improving consumption experience...
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Logistics ...Operational excellence supporting sales and growth
New DC – Distrito Federal Situated in 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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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.