BTG Pactual XIX Brasil CEO Conference 2018 February 6th 7th, 2018 São Paulo
Agenda Company Overview Competitive Advantages Operating Highlights Financial Highlights 2
Company Overview Business Segments Geographic Footprint Gross Revenue by Business Segment (2017 9M) +1,800 cities covered 5,500 clients Lab-to-Lab 54% PSC 46% Lab-to-Lab: performs clinical analysis tests for other laboratories and hospitals, serving over 5,500 clients nationwide PSC: 112 stores (patient service centers) in Minas Gerais, Goiás, São Paulo, and Rio de Janeiro, offering clinical analysis, imaging tests, vaccines, check-ups and others # 112 PSC (1) 31 Regional Labs (NTAs) Central Lab Vespasiano (NTO) Progenetica and Diagnóstika 7 64 9 Lab-to-Lab Presence Business segments Highlights PSC: Regional leadership PSC: Gross revenue per type of test (3Q17) Total volume of tests (2017 9M) ~70% Market Share in the metropolitan region of Belo Horizonte (MG) ~50% Market Share in the metropolitan region of Goiânia (GO) Image 49% Clinical analysis 51% Lab-to-Lab: 49.0 million (+20.2% YoY) PSC: 16.6 million (+8.8% YoY) 1 In September 2017 2 Includes 9 stores from Guanabara, company acquired in Rio de Janeiro 3
Brands Lab-to-Lab Brands Strategy: Product portfolio diversification through complementary specialized tests and market share expansion PSC brands Strategy: Build national presence organically and through M&A Reference in Lab-to-Lab segment with 20 years of experience National presence with over 5,500 clients Largest laboratory in Minas Gerais Reference in Minas Gerais state with a well recognized brand and a diversified portfolio of tests including clinical analysis and imaging, as well as vaccines. Has 58 years of experience Reference in anatomic pathology Highly specialized medical team, 32 years in the market with expertise in 19 segments of anatomic pathology Located in São Paulo and Rio de Janeiro Largest lab in Goiás with 31 years of experience and a top-of-mind brand. Portfolio includes clinical analysis, imaging and vaccines Acquired by Hermes Pardini in 2013 due to its relevance in the greater Goiânia area with 31 centers Reference in oncogenetics with a 17-year track record Specialized test portfolio as key rationale for the acquisition by Hermes Pardini Among 1 st labs to implement high complexity molecular testing Located in Rio de Janeiro Acquired in December 2016: Opportunity to increase market share in Rio de Janeiro with 9 centers in the metropolitan area (Mar/17) Reference in multi-specialty imaging tests with 46 years of experience and pioneer in radioactive diagnostics and treatment 4
Hermes Pardini Track Record Hermes Pardini Track Record 1959-2001: Foundation and Creation of New Segments 2007-2011: Professionalization As of 2011: Accelerated Growth Strategy Business segmentation into Lab-to-Lab and PSC Professionalization of management and 10-yr strategic plan definition Lab-to-Lab: Specialization and market share expansion, organically and through M&A PSC: Build national presence organically and through M&A Beginning of diagnostics operations Launch of Labto-Lab services Launch of vaccine services Inauguration of NTO to support Lab-to-Lab expansion PSC M&A Strategy: São Paulo PSC M&A Strategy: Goiás Launch of Hermes Pardini brand in SP IPO 1959 1994 1997 1998 2001 2007 2010 2011 2012 2013 2016 2017 2018 Launch of imaging and anatomic pathology services Creation of the human genetics department Implementation of Corporate Governance Entry of Gávea Investimentos to support M&A strategy and further professionalization Lab-to-Lab M&A Strategy: Lab-to-Lab M&A Strategy: M&A strategy: Rio de Janeiro Acquisition of CMNG Project Enterprise 2018 5
Management Team Executives Position Years at Hermes Pardini Previous Experience and Education Dr. Roberto Santoro CEO 14 Prior to becoming CEO, Dr. Santoro was Hermes Pardini s Medical Diagnostics Director Undergraduate and graduate medical degree from UFMG. Executive MBA at Fundação Dom Cabral and post-mba at Kellogg Camilo de Lelis CFO / IR 7 Prior to joining Hermes Pardini, Mr. de Lelis worked in the mine and automotive industries with London & Scandinavian Metallurgical and Fiat (Brazil, Mexico and USA) Bachelor in Accounting Sciences from Universidade Newton Paiva. Graduate degree from UNA and MBA from Harvard-UDEM Alessandro Ferreira Commercial Officer 19 Prior to joining Hermes Pardini, Mr. Ferreira was a biotechnology and biochemical professor at the post-graduate level Bachelor in Biochemical Pharmacy at UFMG. Master and doctorate degree from UFMG and MBA degree from IBMEC Dr. Guilherme Collares Operations Officer 7 Technical Director for 5 years at Lab Rede. Previous Emergency coordinator at UFMG Hospital das Clínicas and president of the Clinical Pathology Dep. (MG) Medicine undergraduate and master degrees from UFMG. Executive MBA from FGV Adriana Linhares Business Officer 18 Prior to becoming Business Director, Adriana Linhares was Hermes Pardini s PSC Corporate Manager Bachelor in Biochemical Pharmacy from UFMG. Graduate degree in Clinical Analysis from UFMG and executive MBA degree from IBMEC 6
Consistent Gross Revenue Growth R$mm Gross Revenue and Gross Margin - Consolidated¹ # of tests (MM) Average ticket (R$) 48.5 54.8 59.2 72.8 12.76 13.59 13.94 13.33 619 745 826 971 2013 2014 2015 2016 Gross Margin 34.4% 34.3% 34.3% 32.7% Lab-to-Lab: Gross Revenue and Gross Margin PSC: Gross Revenue and Gross Margin # of tests (MM) 32.4 38.0 41.7 55.2 # of tests (MM) 15.9 17.6 18.9 19.8 Average ticket (R$) 10.74 11.23 11.35 10.50 Average ticket (R$) 17.42 18.77 19.54 20.43 348 427 473 579 278 330 369 405 2013 2014 2015 2016 2013 2014 2015 2016 Gross Margin 35.9% 37.5% 38.7% 37.5% Gross Margin 33.3% 30.5% 28.5% 25.4% Note: ¹ includes eliminations. Does not include Guanabara Acquisitions 7
Evolution of Profitability Levels R$mm Adjusted EBITDA and margin Net income and margin 23.6% 25.3% 24.1% 22.2% 10.6% 12.1% 10.9% 11.5% 177 186 200 84 84 103 136 61 2013 2014 2015 2016 2013 2014 2015 2016 Note: does not include Guanabara 8
Low Leverage with Superior Returns R$mm Net Debt and Net Debt / EBITDA annual evolution ROIC (without goodwill) 7.2% -26.5% -26.6% 15.4% 8.9 28.7 27% 36% 35% 33% (45.6) (47.1) 2013 2014 2015 2016 2013 2014 2015 2016 Net Debt and Net Debt / EBITDA 4Q16 x 3Q16 ROIC (with goodwill) -47.4% 15.4% 21% 25% 25% 21% 28.7 (89.7) 3T16 4T16 2013 2014 2015 2016 Note: does not include Guanabara 9
Agenda Company Overview Competitive Advantages Operating Highlights Financial Highlights 10
Growth Avenues Key Differentiating Attributes Competitive advantages 1 Centralized production with efficient logistics 2 Lab-to-Lab: Unique Value Proposition 3 PSC: High Reliability and Operational Excellence 4 Focus on R&D: High Specialization and Development of New Tests 5 Organic growth opportunities 6 Experience in M&A activities 11
1 Centralized production with efficient logistics Centralized production... supported by regional sites (NTA) and an efficient logistics network: Central Lab: NTO Vespasiano RH Rio de Janeiro RH RH Belo Horizonte Central Lab NTO Goiânia RH Oncogenetics Pathol. Anatomy RH São Paulo RH Central Laboratory (NTO) 4 supporting regional sites (NTAs) 2 supporting specialized sites (NTAs) 5,500+ Lab-to-Lab Clients 112 Pardini PSCs 12
2 Lab-to-Lab: Unique Value Proposition Fast Turnaround Time R&D and Broad Test Menu IT Integration Reliability of Results Lab-to-Lab Competitive Cost Structure Medical Support 13
3 PSC: High Reliability and Operational Excellence Medical excellence, broad portfolio and expertise with customer care increases the value perceived by patients and physicians, while operating excellence allows Hermes Pardini to offer competitive prices for HMOs High Value Perceived by Patients and Physicians + Operating Excellence 1 Excellence in Patient Care 1 Competitive Cost Structure 2 Brand Recall and Reliability of Results 2 Expertise in Cross-Selling 3 One-Stop-Shop 3 Real-Time Operations Monitoring One-Stop-Shop Real-Time Monitoring Real time monitoring of KPIs Clinical Analysis Imaging Tests Vaccines Nutrition Check-ups OTC Wellness Products Precision Medicine 14
4 Focus on R&D: High Specialization and Development of New Tests Hermes Pardini s R&D excellence allows for a leading positioning in development of exclusive tests New Test Development Research Production and Quality Recognition American Association of Clinical Chemistry 1 st Place in Personalized Medical Research 3 nominations 2 oral presentations Quality Certificates Zika Virus case study: 1 st lab in Brazil to develop inhouse methodology for viral detection Zika virus test was only offered by laboratories outside Brazil with an avg. cost of R$1,000 and 50 days of turnaround time Hermes Pardini developed this test in-house and was able to reduce patient cost by 50% and the turnaround time to only 1 week (1) Source: Folha de São Paulo 15
5 Organic Growth Opportunities Multiple avenues for organic value creation Lab-to-Lab Strategy PSC Strategy Short Term Growth Strategy: 1 Increase Share of Wallet in Client Labs 2 New Labs in Existing Routes 3 New Labs in New Routes 4 Lab Portfolio Expansion and % Outsourced + Expansion Strategy: Strengthen presence in southeast region and expand to key metropolitan cities in the south and northeast Increase bargaining power with payers Continue to focus on higher return clinical analysis with imaging as a support Cross-selling leverage New PSCs will be offered in a one-stop-shop format: units with ~1,500m², broad menu of clinical analysis and imaging tests, vaccines, check-ups and anatomic pathology PSCs per Region 1 Rio de Janeiro 9% São Paulo 5% Long Term Growth Strategy: Further develop relationships in Pharma Increase volume of toxicology tests Expand telemedicine Focus on precision medicine Goiás 28% Minas Gerais 58% (1) June 2017, including the stores acquired through Guanabara laboratory, in Rio de Janeiro 16
6 Experience in M&A activities Experience in M&A activities Revenue and Margin Expansion Business Diversification December 2016 Strengthen penetration in Rio de Janeiro Complete portfolio of tests (mainly nuclear medicine and radiology) July 2013 Increase in specialized anatomic pathologic tests production capacity Renowned medical team July 2013 Acquisition of clinical analysis market leader in Mid-West region December 2012 Acquisition of national paternity test leader, strengthening biotechnology portfolio Opportunity to acquire local authority portfolio Entry in São Paulo diagnostics market, largest national market Focused on imaging tests. Opportunity to expand in clinical analysis and vaccines December 2012 October 2012 Opportunity to use its lab as a NTA for Lab-to- Lab clients in São Paulo Acquisition of Pregenetica s genetics and personalized medicine know-how Specialized on high complexity molecular tests 17
Agenda Company Overview Competitive Advantages Operating Highlights Financial Highlights 18
Operating Highlights for 3Q17 Ecoar Acquisition Laboratório Humberto Abrão Acquisition Enterprise 2018 Project Monthly Record of Tests Processed Acquisition of 100% of Ecoar Medicina Diagnóstica Ltda, a company that specializes in imaging tests and which has operations in the city of Belo Horizonte. It has three services units and has been operating in the sector for 29 years; Acquisition of 100% of Laboratório Humberto Abrão, a reference for clinical analysis tests in the city of Belo Horizonte/MG. It has five services units and has been operating in the sector for 40 years; In the Enterprise 2018 Project, we validated the technical projects and a few days ago received the commercial proposals. Our aim is to finalize the commercial negotiations and define the suppliers by the end of the year Monthly Record in terms of Tests Processed in August: 7.8 million tests. 19
Operating Highlights for 3Q17 Época / Reclame Aqui Awards Anuário Ranking Valor 1.000 Yearbook NPS: 74 in September 2017 Opening of the first Pra Você Clinic Época Reclame Aqui Awards: we ranked among the three best companies for the consumer in the Health, Laboratory and Imaging category; Anuário Ranking Valor 1.000 Yearbook: we are one of the 10 largest companies in Brazil in the medical services segment; Hermes Pardini's NPS (Net Promoter Score) ended the month of September 2017 at a figure of 74, denoting stability in relation to previous months; Opening of the first Pra Você clinic in the city of Belo Horizonte, the Pardini Group s new business model focused on the promotion of health and which will offer clients medical appointments, treatments and tests; We have added 05 New Tests to the portfolio, as a result of the work developed by the Research and Development area; 20
3Q17 Highlights: Lab-to-Lab segment Consistent growth in volume of tests (+16.0%) and revenue per client (+6.3%); Commercial strategy focused on the increase of the client base: 5,175 clients generated revenues during the 3Q17 (+7.3% YoY); Expertise on client relationship and high quality of services has resulted in the improvement of Same Lab Sales indicator (+12.4%). 21
3Q17 Highlights: PSC segment Acquisition of Guanabara, in Rio de Janeiro, focused on imaging tests, has contributed to the increase in number of tests (+12.0%) and in gross revenue per m2 (+24.1%); Resilience in a market of high concentration of lives among a few healthcare operators: increase in same store sales (SSS) basis of 4.9%; NPS (Net Promoter Score) for Hermes Pardini reached 74% during 3Q17; 22
Agenda Company Overview Competitive Advantages Operating Highlights Financial Highlights 23
Consolidated Gross Revenues R$ MM 3Q16 3Q17 Variation 2016 9M 2017 9M Variation Lab-to-Lab 155.8 177.7 14.1% 431.0 502.9 16.7% PSC 102.9 143.5 39.4% 308.6 424.9 37.7% Eliminations -4.5-4.6 4.2% -9.5-12.0 27.2% Consolidated 254.3 316.6 24.5% 730.1 915.7 25.4% Strong increase in gross revenue in both business units; Eliminations shown in the above table are mainly intercompany transactions which are excluded for calculating gross book revenues. 24
Gross Revenues of the Lab-to-Lab segment The significant increase in Gross Revenue (+14.1%) was due mainly to higher number of tests (+16.0%) and number of clients which generated revenue in the period (+7.3%); Gross revenue per client showed year-on-year growth of 6.3%, reflecting the strategy of improving the relationship with existing clients and increasing the share of wallet; Expertise on client relationship and high quality of services has resulted in the improvement of Same Lab Sales indicator, which grew by 12.4%. 25
Gross Revenues of the PSC segment Acquisition of Guanabara, in Rio de Janeiro, focused on imaging tests, has contributed to the increase in number of tests (+12.0%) and in gross revenues from the PSC segment (+39.4%); Imaging tests represented circa 49% of gross revenues from the PSC segment; Gross revenues, in terms of same store sales, grew by 4.9%. 26
Deductions from Gross Revenues and Net Revenues R$ MM 3Q16 3Q17 Variation 2016 9M 2017 9M Variation Disallowances -3.7-5.7 53.0% -9.3-12.5 34.7% Cancelled Sales and Other Rebates -0.4-0.7 62.7% -1.6-2.7 66.2% Taxes on Services -15.4-19.7 28.1% -44.1-56.1 27.3% Cancellations and Deductions (R$ MM) -19.5-26.1 33.6% -55.0-71.4 29.7% Total deductions represented 8.2% of gross revenues in 3Q17 and 7.7% in 3Q16; The purchase of Guanabara increased the share of the PSC segment to 44.3% of our consolidated net revenue in 3Q17. 27
Gross Profit and Gross Margin In the Lab-to-Lab segment, the rise in gross margin observed in 2017 9M is related to the increase in volume of tests, efficiency gains from negotiations with suppliers and the maturity of certain clients which joined the active client base of IHP during 2016; In the PSC segment, gross margin increased due mainly to the incorporation of results from Guanabara, higher number of tests and closure of certain service units during 2016. 28
Operating Expenses (Selling, Administrative and Other) Variation of major Operating Expenses 3Q16 3Q17 Operating Expenses R$ MM % Net % Net R$ MM Revenue Revenue Selling Expenses 21.2 9.0% 19.9 6.8% General and Administrative Expenses 18.1 7.7% 22.7 7.8% Other Operating Income / Expenses 0.87 0.4% 2.2 0.8% Total Operating Expenses 40.2 17.1% 44.8 15.4% 2016 9M 2017 9M Operating Expenses R$ MM % Net % Net R$ MM Revenue Revenue Selling Expenses 50.4 7.5% 56.1 6.6% General and Administrative Expenses 45.2 6.7% 69.8 8.3% Other Operating Income / Expenses 4.8 0.7% 4.3 0.5% Total Operating Expenses 100.4 14.9% 130.2 15.4% Operating expenses remained at 15.4% of net revenues in 3Q17 and represented 17.1% of net revenues in 3Q16. Selling Expenses reduction is an effect of non-recurring expenses that were seen in 3Q16 and did not recur in 3Q17; General and Administrative Expenses variation ocurred mainly as a result of Guanabara s numbers incorporation and an increase in personnel expenses. 29
Financial result R$ MM 3Q16 3Q17 Variation 2016 9M 2017 9M Variation Net Finance Result 7.9-2.2-127.4% -0.9-15.4 1600.0% Finance Income 8.5 6.1-28.1% 23.1 19.5-15.8% Income from financial investments 6.0 5.0-17.2% 16.2 15.5-4.2% Others 2.5 1.1-54.3% 7.0 4.0-43.0% Finance Costs -0.6-8.5 1382.1% -26.3-34.9 32.7% Interest on borrowings -2.0-6.7 238.1% -6.6-19.2 192.2% Interest on installments -1.0-0.6-39.4% -3.2-2.4-25.3% Restatement of investment call option debt 4.3 0.0-100.0% -5.0-7.7 55.3% Other finance costs -1.9-1.2-34.4% -11.6-5.6-51.7% Foreign Exchange Variation -0.1 0.2-487.1% 2.3 0.0-99.4% Foreign exchange income 0.1 0.3 128.2% 3.6 1.4-61.5% Foreign exchange expenses -0.2-0.1-69.4% -1.3-1.4 4.9% The increase in Finance Expenses were influenced in R$ 5.6 million by interests in connection with the funds raised by the company in 1Q17 in the form of simple nonconvertible debentures; 30
Income tax / social contribution R$ MM 3Q16 3Q17 Variation 2016 9M 2017 9M Variation Earnings Before Taxes (EBT) 47.5 53.4 12.3% 124.8 142.3 14.0% Expected taxes (standard rate of 34%) -16.2-18.2 12.3% -42.4-48.4 14.0% Effect on the results of subsidiaries taxed under the presumed profit method -0.2 2.0-1314.5% 1.0 4.8 397.8% Other exclusions (additions), net 1.1 0.1-91.4% 0.6 1.6 159.1% Income tax and social contribution -15.2-16.1 5.8% -40.9-42.0 2.8% % EBT -32.0% -30.1% +187 bps -32.7% -29.5% +321 bps Current -12.5-12.4-1.4% -39.1-42.9 9.7% Deferred -2.7-3.7 39.5% -1.8 0.8-147.8% The Company intends to start amortizing the goodwill from company acquisitions (around R$ 219.6 million, as per IHP s financial statements) in the first quarter of 2018. 31
Net Income and Adjusted EBITDA R$ MM 3Q16 3Q17 Variation 2016 9M 2017 9M Variation Adjusted EBITDA 50.1 69.5 38.7% 156.1 201.7 29.2% margin 21.4% 23.9% +258 bps 23.1% 23.9% +77 bps Persistent high profitability margins: adjusted EBITDA margin of 23.9% and net income margin of 12.8% thanks to improved operational margins in both segments; Non-recurring items which affected EBITDA in 3Q17 includes expenses related with the IPO (R$ 0.5 MM), write-off of assets due to divestiture or obsolescence (R$ 0.8 million) and other non-operating and non-recurring expenses: (R$ 1.6 MM). 32
Trade Receivables R$ MM 1Q16 2Q16 3Q16 4Q16 1Q17 2Q17 3Q17 Trade Receivables 202.5 201.1 204.5 211.6 229.6 243.4 252.1 Current 175.4 171.8 175.9 177.3 203.3 209.9 213.0 From 1 to 60 days past due 13.9 16.4 18.0 21.2 13.4 16.0 26.9 From 61 to 120 days past due 3.0 5.5 3.4 2.6 2.6 2.5 1.7 Over 120 days past due 8.0 3.9 5.4 7.4 8.9 10.5 6.1 Other current amounts 2.2 3.5 1.7 3.2 1.4 4.5 4.3 Provision for disallowances and doubtful accounts -13.5-10.4-7.2-13.7-11.5-16.0-10.4 Total 189.0 190.8 197.3 197.9 218.1 227.4 241.7 Current / Trade Receivables 86.6% 85.4% 86.0% 83.8% 88.5% 86.2% 84.5% Balance overdue until 120 days / Trade Receivables 8.4% 10.9% 10.5% 11.2% 7.0% 7.6% 11.4% Provisions / Balance overdue for more than 121 days 168.8% 263.7% 131.8% 186.5% 128.9% 153.2% 170.4% Net Revenue 210.3 230.0 234.8 224.3 267.4 286.4 290.5 Days of Sales Outstanding 80.9 74.7 75.6 79.4 73.4 71.4 74.9 Days of sales outstanding was down to 74.9 days in 3Q17, due mainly to higher participation of the PSC segment in the Company s revenue mix and changes in the payment policies of the sales area in the Lab-to-Lab segment; Our receivables portfolio is at an extremely healthy level: 84.5% of receivables are in order. we have set up a provision for all receivables overdue for more than 120 days. 33
Debt Net debt and Covenants R$ MM 3Q16 3Q17 Variation Gross Debt (Borrowings) 93.1 276.0 196.3% Cash and Cash Equivalents 182.8 224.5 22.8% Net Debt -89.7 51.5-157.4% Net Debt / EBITDA LTM -0.5x 0.2x -148.4% EBITDA LTM / Financial Result LTM -33.5-23.3-30.3% In 3Q17, we showed a net debt of R$ 51.5 MM, mainly because of the dividends payment occurred on may/17, at amount of R$ 158.5 MM; Healthy capital structure (net debt / EBITDA LTM of 0.2x). 34
Cash Flow R$ Thousand 3Q16 3Q17 Variation 2016 9M 2017 9M Variation Profit for the period 32.3 37.3 15.4% 83.9 100.3 19.4% Itens not affecting cash 27.5 36.5 32.8% 94.8 110.9 16.9% Working Capital: 0.7-13.3-2083.3% -78.3-57.8-26.2% Receivables -10.3-14.9 44.6% -83.3-47.1-43.5% Trade Payables -5.2 3.1-159.6% 5.6 1.5-73.2% Salaries / Charges 8.8 2.2-74.6% -6.2-12.3 99.6% Other Assets and Liabilities 7.4-3.7-150.7% 5.6 0.1-99.0% Income tax and Social Contribution and Other Payments -19.8-19.7-0.3% -41.4-55.0 33.0% Operating Cash Flow 40.7 40.8 0.3% 59.1 98.3 66.3% Investing Activities: -9.1-9.2 0.6% -18.1-46.2 155.4% Acquisition of Minorities Stakes 0.0 0.0 n.m 0.0-21.6 n.m CAPEX -9.2-9.2 0.1% -18.3-24.7 35.0% Other investing activities 0.1 0.0-100.0% 0.2 0.0-100.0% Financing Activities: -29.2-10.8-63.1% -46.8 48.1-202.6% Dividends -16.9 0.0-100.0% -16.9-225.9 1239.8% Other financing activities -12.3-10.8-12.6% -30.0 274.0-1013.8% Cash Flow 2.4 20.9 774.1% -5.9 100.1-1811.2% Conversion (operating cash flow/ebitda) 4.9% 32% 538.2% 0.0 0.5-1472.5% Net cash flow from operations amounted to R$ 40.8 million in 3Q17; 35
CAPEX and ROIC CAPEX (R$ MM) ROIC LTM without goodwill Most investments made during 3Q17 may be classified as maintenance CAPEX (renovation of the Guanabara units in Rio de Janeiro and improvements to the existing service units in the cities of Belo Horizonte, São Paulo and Goiânia) and IT CAPEX (revitalization of IT infrastructure and renewal of software licenses); ROIC LTM without goodwill of 32.1% in 3Q17. 36
Notice and IR Contacts Important notice This presentation contains certain forward-looking statements concerning the business prospects, projections of operating and financial results and growth potential of the Company, which are based on management s current expectations and estimates of the future performance of the Company. Although the Company believes such forward-looking statements are based on reasonable assumptions, it can give no assurance that its expectations will be achieved. Expectations and estimates that are based on the future prospects of the Company are highly dependent upon market behavior, Brazil s political and economic situation, existing and future regulations of the industry and international markets and, therefore, are subject to changes outside the Company s and management s control. The Company undertakes no obligation to update any information contained herein or to revise any forward-looking statement as a result of new information, future events or other information. Contact: Investor Relations e-mail: ri@grupopardini.com.br site: www.grupopardini.com.br/ri Phone: +55 (31) 3629-4503 37