3Q17 Earnings Release

Transcription

1 Earnings Release

2 Capital Allocation Strategy

3 2017 Profarma 2017 Focus in profitability 3 Capital Reallocation Better return Segments Company in Ramp up Ebitda Margin Evolution FOCUS: ROIC AND NET INCOME 2018 Pharma Market Increasing Inflation Decreasing Dilution of Operating Costs Sharp drop in Interest Rate

4 Verticalização Profarma Vantagens Histórico do Modelo Integrado Alocação de Capital 4 Lower Working Capital Supply Agility Relevance to Suppliers Optimized working capital and a cash cycle 30 days shorter than the average of other retail players. Integrated logistic structure enables a promptly accelerated inventory recovery in various regions. Combined purchsing power between retail and wholesale assures more competitive prices. Tax Optimization Drugstore Market G&A Sinergies More competitive prices when buying inside the state directly from the wholesale. Wholesalers with lower dependence on big chains and market share growth with higher rates. Shared Services Center: legal, fiscal, internal audit and human resources. Distribution center shared with wholesale clients 35 thousand clients supplied nationally.

5 POTENTIAL ROIC Profarma 2016 Profarma Capital Allocation Histórico Strategy for Alocação Best Return Segments de Capital 5 (R$ million) 10.8% 10.9% 10.9% Invested Capital Evolution Profarma Group 13.4% 14.0% 14.3% 12.2% 1,376 1,032 1, % 14.6% 1,475 1, Farma Especialidades Varejo ROIC Potencial Consolidado 3Q16 Pharma: 10.6% - last 5 years average. Specialties: 12.6% - last 5 years average for a adjusted EBITDA margin of 3.2%. Retail: 19.2% - top 3 players average. Consolidated: Weighted average potential ROIC, considering each division s potential ROIC. Invested Capital: Equity + Net Debt ROIC: NOPAT /Invested Capital

6 Marginal Profarma ROIC New Stores Histórico and Renovated Alocação Stores Rede Rosário de Capital 6 Marginal ROIC - New Stores Pharma Retail Base 100 R$ thousand Market Rede Rosário - Integrated Model Does not include Investment in D.C. Does not include Investing in D.C. Stock Ramp up Sales 12 m Gross Profit Gross Margin Operating Expenses - Store Contribution Margin - Store NOPAT Capex Working Capital Pre-Operational Expenses 2.4 Total Invested Marginal ROIC % (Standard Income Tax) 40.9% 88.8%

7 Consolidated Profarma Non Histórico Recurring Expenses Alocação vs Savings de Capital 7 Division Action/Iniciative Estimate Savings (annual, except PERT) Non Recurring Expenses Pharma Closing DC Ceará and Change of from Espírito Santo to Rio de Janeiro R$ 4.2MM R$ 1.5MM Operating productivity gains - Logistics/Commercial R$ 5.6 MM R$ 1.2MM Stores operating expenses reduction d1000 RJ R$ 9.1MM R$ 3.1MM Retail Corporate expenses reduction R$ 12.0MM R$ 2.1MM Closing 33 stores: Negative Contribution Margin R$ 6.5MM R$ 11.3MM Consolidated PRFM joined the new refinacing program for Federal taxes (PERT)*¹ R$ 32.6MM R$ 1.9MM Total 3 Years Savings R$ 144.8MM R$ 21.2MM

8 Rosário Performance 8 Financial Indicator Operating Indicator (18.9) (6.3) , (11.9) (0.6) Operating Expenses (R$ Million) Ebitda (R$ Million) Monthly average sale (R$ thousand) Service level (%) Clients served (# thousand) Average Ticket (R$) Dez/16 Monthly average sale - Rosário Sep/16 Sep/17 - Rosário Sep/17 d1000 varejo farma RJ

9 Consolidated Performance

10 Profarma Key Highlights Histórico Alocação de Capital 10 PROFARMA GROUP CONSOLIDATED PHARMA DISTRIBUTION Gross revenue rose by 4.5%. The consolidated cash cycle was shortened by 16.0 days to 35.2 days. The Retail Division accounted for about 55% of our consolidated gross profit, vs. 40% in 3Q16. The Independent customers segment grew by 8.6%. Sales of health & beauty products climbed by 44.6%. The cash cycle was shortened by 14.3 days to 32.4 days.

11 Profarma Key Highlights Histórico Alocação de Capital 11 SPECIALTIES Total sales rose by 1.3% year-over-year in 9M17. Operating expenses slid by 0.8 p.p., from 9.0% to 8.2%. Vaccine sales shot up by 25.7%. d1000 VAREJO FARMA RJ Monthly sales per store came to R$579.0 thousand, 6.2% higher than ABRAFARMA s (Brazilian Association of Pharmacy and Drugstore Chains) average. Store expenses fell from 21.5% to 19.6%. The contribution margin of stores stood at 9.0%. REDE ROSÁRIO Average monthly sales per store increased by 112.9% to R$353.4 thousand between and September Store expenses reduction from 30.0% to 26.7%, quarter-over-quarter. Average EBITDA per month shot up by 91.1% from December 2016.

12 Consolidado Receita Bruta Consolidated Gross Revenues 12 Consolidated IFRS (R$ million) 6.4% 4.5% 3,439 3,659 1,163 1,263 1,217 1,226 1,216 Distribuição Farma Sales decreased by 6.6% year-over-year. Varejo 2,840 2, , Sales increased by 58,7% year-over-year 9M16 9M17 3Q16 4Q16 1Q17 2Q17 Pharma Distribution Retail

13 Consolidated Consolidado Ebitda and Adjusted Ebitda Margine Ebitda Margem (Ex-Rosário) Ebitda Ajustada 13 Consolidated IFRS (R$ million and % Net Income) 3.7% 1.9% 1.6% 3.5% 1.8% 1.9% 2.2% 1.7% 1.3% 1.5% 1.9% 1.5% M16 9M17 3Q16 4Q16 1Q17 2Q17 Consolidated Ex-Rosário Pharma Distribution Retail Equity Income -Specialties

14 Consolidated Consolidado Ebitda Bridge per Ebitda Division e Margem vs 3Q16 (w/o Ebitda Rosário) Ajustada 14 Consolidated IFRS (R$ million and % Net Income) Q16 Pharma Distribution d1000 RJ Rosário Equity Income Specialties

15 Consolidated Capex and Indebtness 15 Capex (R$ million) Net Debt and Net Debt / EBITDA (R$ million) x x x x x x Machinery and Equipment IT Others Capex 2Q16 Ex-Rosário. 3Q16 4Q16 1Q17 2Q17

16 Consolidated Consolidado Adjusted Net Income Lucro (w/o Líquido Rosário) 16 Consolidated IFRS (R$ million and % Net Income) 0.1% -0.4% -0.1% 0.1% 0.2% -0.9% -3.5% -2.6% -2.4% -3.4% 3Q Q16 1Q17 2Q (9.5) (3.9) (1.4) (38.6) Net Income (27.1) (24.8) Adjusted Net Income (35.3)

17 Consolidated Consolidado Adjusted Net loss Ebitda Bridge e Margem vs 3Q16* Ebitda Ajustada 17 Consolidated IFRS (R$ million and % Net loss) 3Q16 Ebitda Pharma Distribution Ebitda d1000 RJ Ebitda Rosário Equity Income Specialties Non Recurring Expenses Financial Expenses Retail Invest. Operating Financial Expenses Income Tax / Holdings / Depreciation Why? Mainly due to the highest price increase last 10 years in 2016 Best Rosário Ebitda since acquisition Almost flat Mainly due to Retail reestructuri ng, Including 34 stores closed Financial expenses due to Rosário acquisition Lower interest rates Higher operating loss before taxes

18 Attachments

19 Consolidated Consolidado Gross Revenues Receita Bruta 19 Consolidated IFRS (R$ million) 6.4% 4.5% 3,439 3,659 1,163 1,263 1,217 1,226 1, ,840 2, , M16 9M17 3Q16 4Q16 1Q17 2Q17 Pharma Distribution Retail

20 Consolidated Consolidado Gross Profit Lucro Bruto 20 Consolidated IFRS (R$ million and % Net Income) 15.6% 17.2% 15.2% 14.6% 17.1% 17.8% 16.6% M16 9M17 3Q16 4Q16 1Q17 2Q17 Pharma Distribution Retail

21 Consolidated Consolidado Operating Expenses Despesas - SGA Operacionais SGA 21 Consolidated IFRS (R$ million and % Net income) 15,8% 14,0% 16,1% 16,2% 15,0% 11,8% 11,8% M16 9M17 3Q16 4Q16 1Q17 2Q17 Pharma Distribution Retail

22 Consolidated Consolidado Adjusted EBITDA Ebitda and EBITDA e Margin Margem (w/o Rosário) Ebitda Ajustada 22 Consolidated IFRS (R$ million e % Net income) 3.7% 1.9% 1.6% 3.5% 1.8% 1.9% 2.2% 1.7% 1.3% 1.5% 1.9% 1.5% M16 9M17-2 3Q Q16 1Q17 2Q17-1 Consolidated Ex-Rosário Pharma Distribution Retail Equity Income Specialties

23 Consolidated Consolidado Net Income (w/o Lucro Rosário) Líquido 23 Consolidated IFRS (R$ million and % Net Income) 0.5% -0.4% -0.1% 0.1% 0.2% -0.9% -3.5% -2.6% -2.4% -3.4% 3Q Q16 1Q17 2Q (3.9) (1.4) (9.5) (24.8) (38.6) (27.1) (35.3) Net lncome Adjusted Net Income

24 Consolidated Capex and Indebteness 24 Net Debt and Capex (R$ million) Net Debt / Ebitda (R$ milion) x 3.1x 4.0x 4.9x x 2.5x Machinery and Equipment IT Others Capex 2Q16 Ex-Rosário. 3Q16 4Q16 1Q17 2Q17

25 Pharma Distribution Financial Performance 25 Financial Data (R$ million and % Net Income) 1,136 1,056 1,041 1,042 1, Increase of 8.6% in the segment of independent customers; Evolution of 44.6% in the category of personal hygiene & cosmetics; Reduction of 14.3 days of the cash cycle, which reached 32.4 days. 3Q16 4Q16 1Q17 2Q17 3Q16 4Q16 1Q17 2Q17 3Q16 4Q16 1Q17 2Q17 3Q16 4Q16 1Q17 2Q17 Gross Revenues (R$ million) Gross Margin (%) Op. Exp. SG&A (%) EBITDA Margin (%)

26 Specialties Especialidades Financial Performance 26 Financial Data (R$ million and % Net Income) Total sale in 9M17 increased 1,3% when compared to the same period of the previus year; Operating Expenses Reduction by 0.8 p.p., from 9,0% to 8,2%; Increase of 25.7% in sales of the vaccine category. Crescimento de 6,3% nas vendas da categoria de genéricos. 3T16 4T16 1T17 2T17 3T17 3T16 4T16 1T17 2T17 3T17 3T16 4T16 1T17 2T17 3T17 3T16 4T16 1T17 2T17 3T17 Gross Revenues (R$ million) Gross Margin (%) Op. Exp. SG&A (%) EBITDA Margin (%)

27 d1000 varejo farma RJ Varejo Financial Performance (w/o Rosário) 27 Financial Data (R$ million and % Net Income) d1000 varejo farma RJ Monthly sales per store came R$ 569,8 Thousand, 8.5% higher than ABRAFARMA s average; Store expenses fell from 21.8% to 20,9%; 1.0 Contribution Margin reached 9.0%. 0.3 Rosário Same-Store Sales increased by 3% against 2T17 and average store/month sales 106.1% in the comparison of Sep/2017 versus Sep/16, reaching R$ Thousand; Reduction in store expenses, from 21.5% to 19.6%; 3Q16 4Q16 1Q17 2Q17 3Q16 4Q16 1Q17 2Q17 3Q16 4Q16 1Q17 2Q17 3Q16 4Q16 1TQ7 2Q17 Gross Revenues (R$ million) Gross Margin (%) Op. Exp. SG&A (%) EBITDA Margin (%) Evolution of 91.1% in the average Ebitda/month compared to the result of Dec/16;

28 d1000 varejo farma RJ Operating Performance (w/o Rosário) 28 Total Sales Increased (%) Same Store Sales (%) SSS Mature Stores (%) 3.7% 2.2% -2.2 p.p. 0.8% 1.5% 3.9% 1.4% -0.1 p.p. 1.4% 3.8% 2.5% 0.0% -0.3 p.p. 0.9% 2.2% -2.3% -1.8% -3.0% 3Q16 4Q16 1Q17 2Q17 3Q16 4Q16 1Q17 2Q17 3Q16 4Q16 1Q17 2Q16

29 d1000 varejo farma RJ Operating Performance (w/o Rosário) 29 Monthly Average Store s Sales (mature) (R$ thousands) # of Stores (units) Average Ticket (R$) % -6.9% 7.8% 3Q16 4Q16 1Q17 2Q17 3Q16 4Q16 QT17 2Q17 3T17 3Q16 4Q16 1Q17 2Q17 53 opened aberturas closed fechamentos 10 7 reformed reformas maduras mature

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31 Max Fischer - CFO e IRO Beatriz Diez - GRI Tel.: 55 (21) ri@profarma.com.br