apresentação teleconferência aquisição tamoio
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TRANSCRIPT
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A New Company
For a New Market
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Profarma | Disclaimer
This presentation does not constitute an offering, invitation or solicitation of any kind to subscribe for or purchase shares or any other type of securities, nor
does this presentation or any information contained herein form the basis of any type of contract or commitment.
This material should not be construed as investment advice to potential investors. This information is not intended to be complete and is presented as a
summary. No trust should be built upon the basis of the accuracy of the information herein and no representation or guarantee, whether expressed or
implied, is made as to the accuracy of the information herein.
This presentation contains forward-looking statements that may be based upon forecasts which, as such, are no guarantee of future performance.
Investors are advised that these forecasts are and will be subject to countless risks, uncertainties and factors related to Profarma’s operations and
business environments, such as: competitive pressure, the performance of the Brazilian economy and of the pharmaceutical industry and changing market
conditions among other factors mentioned in the documents released by Profarma. These risks may cause the Company’s results to be materially different
from any future results expressed or implied by such forward-looking statements.
Although Profarma believes the expectations and assumptions contained in the forward-looking statements and information to be reasonable and based
upon data presently available to its management, Profarma cannot guarantee future results or events. Profarma does not assume the obligation to update
any forward-looking statements and information.
It is summary information not intended to be complete and should not be deemed investment advice by potential investors. This presentation is strictly
confidential and may not be disclosed to any other persons. We make no statements and no guarantee as to the accuracy, suitability or completeness of
the information posted herein, which should not be relied upon for investment decisions.
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Long-Term Growth
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Profarma | Long-Term Growth Strategy
Selected
acquisitions
New
Segments
Regional
Expansion
Profarma’s long-term growth strategy rests on three main pillars.
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Profarma | A Strategy Based on A Broad Market Vision and Perfect Execution
Profarma has been consistently implementing the strategy of
diversifying its pharmaceutical distribution business by
breaking into new market segments such as:
The hospital industry;
Special products (vaccines, dermatological products,
higher value-added products, etc.);
Value-added services for manufacturers;
Retailing.
Profarma’s new business segments complement and
strengthen the Company’s position in the industry:
Higher-margin segments;
Synergies with the logistics segment;
Synergies with the purchasing department.
Business Segment
Hospitals Specialties Retail
Scale
P
rice
Qu
ality
D
isti
nc
t
Pro
du
cts
Att
rib
ute
s
Distribution Services
Initial Focus Synergy Approach
Selected portfolio
Strategic Positioning Comments
New Focus
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CE
PE
Timeline
Paraná
Minas
Gerais Espírito
Santo
Hospitals
SP
Bahia
DF IPO
Vaccines
CAGR Market (97-00) = 12% CAGR Market (04-10) = 12%
K+F
(SP)
Dimper’s
(RS)
GO
Prodiet Hospitals
RJ
Organic Growth / New Regions New Segments / Products Selected Acquisitions
Arpmed
1998 1999 1996 2001 2003 2004 2005 2006 2007 2009 2011 2012
A proven history of success: a unique ability to enter new regions and segments and make successful acquisitions.
Profarma | Main Events
Market (9M11-9M12) = 17%
Casa Saba
Brasil
2013
Tamoio
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The Tamoio Acquisition
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Drogarias Tamoio | Overview
Branded 31.3%
Generic 8.4%
OTC 16.3%
Health and Beauty
Products 44.0%
Company Overview
Gross Revenues
• Tamoio was established in 1954 headquartered in Rio de Janeiro State;
• It is a pharmaceutical retailer and has a large share of the health, beauty and skin care product markets;
• It is one of the fastest-growing drugstore chains in the state featuring a Compounded Annual Growth rate (CAGR) of
19,8% between 2009 and 2012;
• In 2012, Tamoio recorded gross revenues of R$312.3 million and EBITDA margin of 5.0%.
• Currently, Tamoio’s chain is Composed of 57 stores in 18 cities and towns in Rio de Janeiro State.
2012 Sales Mix
R$ million
# Stores
2011 2012 2010
42
51 57
* Growth Same Store Sale
2011 2012 2010
224.8
270.8
312.3
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Drogarias Tamoio | Rationale of the Transaction
Diversification
and Scale
A retail platform with about 140 stores (85 Drogasmil / Farmalife stores + 57 Tamoio stores) was
developed. It is one of the largest drugstore chains in Brazil and the 2nd largest in Rio de Janeiro;
Tamoio and Drogasmil / Farmalife are present in different parts of the state;
Creation of one of the top mixed pharmaceutical distribution and retail platforms in Latin America
and the largest in Brazil.
The Company is in a unique position to significantly help the industry consolidate its position;
Greater flexibility and capillarity allow Profarma to enter new markets in which it already operates
(support from Profarma’s local team).
Growth
Support from manufacturers’ regional executives may create synergies in purchasing, marketing,
logistics and back office;
Tax optimization in Rio de Janeiro State;
The retail operations will be integrated and managed more easily.
Synergies
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Drogasmil + Farmalife + Tamoio | Present in Different Geographical Areas
Geographical Coverage - Rio de Janeiro State View
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Drogasmil + Farmalife + Tamoio | Present in Different Geographical Areas
Geographical Coverage
Campos dos Goytacazes – 2 stores
Magé / Piabetá / Fragoso – 3 stores
Cachoeira de Macacu – 1 store
São Pedro da Aldeia – 1 store
Rio das Ostras – 2 stores
Rio de Janeiro – 2 stores
Barra do Piraí – 1 store
Nova Friburgo – 2 stores
São Gonçalo – 9 stores
Teresópolis – 1 store
Araruama – 1 store
Cabo Frio – 4 stores
Bacaxá – 1 store
Itaperuna – 2 stores
Petrópolis – 1 store
Três Rios – 1 store
Valença – 1 store
Itaboraí – 3 stores
Macaé – 2 stores
Niterói – 16 stores
Maricá – 1 stores
Campos dos Goytacazes – 1 store
Duque de Caxias – 1 store
Rio de Janeiro – 73 stores
São Gonçalo – 3 stores
São Paulo – 3 stores
Niterói – 4 stores
São João de Meriti – 1 store
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• The brands will be maintained in the current markets.
• Each company is going to continue doing what it does best. The main businesses are going to be expanded in
the current markets, focusing on services, innovation and value creation.
• The companies are going to support one another to speed up–synergies and expertise.
Relationships
New Business
Opportunities
Growth
A Platform for
Future Growth
Complementariness
Complementary
Business Segments
Efficiency
Considerable Potential
for Synergies
Drogasmil + Farmalife + Tamoio | An Attractive Strategic Rationale
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Profarma is going to acquire 50% of Tamoio's total capital immediately by means of a primary subscription of
R$62.3 million and a secondary subscription of R$43.1 million, corresponding to a multiple EV/EBITDA (2012E) of
7.5x. The remaining 50% of the capital will be acquired for a multiple EV/EBITDA of 7.5x based on the 12-month
period prior to the acquisition. Tamoio’s current shareholders will be fully liable for any contingencies connected
with events occurring prior to the execution date of the acquisition contract.
Drogarias Tamoio | Overview of the Transaction
Primary Offer:
• 40% paid on Execution Date
• 15% paid on April 30, 2013 or on the Execution Date, whichever is later ;
• 15% paid on July 31, 2013 or on the Execution Date, whichever is later;
• 15% paid on October 31, 2013 or on the Execution Date, whichever is later;
• 15% paid on January 31, 2014 or on the Execution Date, whichever is later.
Secondary Offer:
• 100% paid on Execution Date
Payment Schedule
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Contingency Cover
Contingency Cover
Drogarias Tamoio | Overview of the Transaction
Contingency Cover
Description of Guarantees
1 – Reimbursement:
• The Current Shareholders will have to reimburse Profarma for any contingencies related to taxable events occurring
prior to the Execution Date within the limits established below:
(i) The Current Shareholders will bear all contingency costs until the combined amount reaches a total of R$3.0 million;
(ii) Tamoio will bear all contingency costs exceeding R$3.0 million up to a total of R$20.0 million;
(iii) The Current Shareholders will bear all contingency costs exceeding R$20.0 million.
2 – Right of Defense, Guarantees and Costs:
• The Current Shareholders will have the right to defend themselves or make Tamoio defend itself in all administrative
and/or legal proceedings;
• The Current Shareholders will bear all the defense and guarantee-related costs;
• If Tamoio exercises its right of defense, the Current Shareholders will reimburse it for the defense costs after the
decision becomes final and unappeasable.
1 – Interest Adjustment via Subscription Bonus:
• At the Execution Date, a subscription bonus will be issued in favor of Profarma, entitling it to issue new Tamoio shares
should the Current Shareholders fail to reimburse Profarma for past contingencies;
• Accordingly, Profarma will be reimbursed by adjusting its interest in Drogarias Tamoio;
• The subscription price of new Tamoio shares will be based on a multiple of 7.5x the EBITDA of the 12-month period
immediately prior to the subscription to the exercise of the Subscription Bonus.
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The Mixed Model
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The Tamoio acquisition marks Profarma’s entry into
the retail market, In line with the Company's strategy
of diversifying and expanding its business, always
with a view to leveraging synergies among the fields
in which its operates and making its business more
profitable.
Without shifting away from it core business, Profarma
is breaking into a still fragmented, but more profitable
market with a greater growth potential.
Profarma is adapting to the modern world and the new
dynamics of the global pharmaceutical distribution
market, as well as capturing value throughout its
distribution chain.
Profarma | Acquisitions of the Drogarias Tamoio, Drogasmil and Farmalife Drugstore Chains
Carefully-planned execution
Profarma: a New Company
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Distribution
Brazil’s 3rd largest distributor, with 12
distribution centers and present in the
whole country;
The Company also has two platforms
(Prodiet and Arpmed) focusing on the
hospital industry, the government and
the specialties market.
Creation of a 140-store chain in
different parts of Rio de Janeiro
State;
Position within the industry: one of
Brazil's top ten pharmaceutical
retailers.
Profarma | A New Company
Mixed Model
A Fragmented Market: A Solid Regional Expansion and
a Diversification of Channels and Products
+
Retail
A New Company with higher margins and better opportunities for growth.
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Analyst Coverage
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Company Analyst Phone number Email address
Credit Suisse Marcel Moraes (55 11) 3841-6302 [email protected]
Banco Fator Pedro Zabeu (55 11) 3049-9478 [email protected]
BTG Pactual João Carlos dos Santos (55 11) 3383-2384 [email protected]
Juliana Rozenbaum (55 11) 3073-3040 [email protected] Itaú BBA
Fernando Amaral (55 11) 3048-6088 [email protected] Morgan Stanley
Andre Parize (55 11) 5171-5870 [email protected] Votorantim
Merrill Lynch Mauricio Fernandes (55 11) 2188-4236 [email protected]
Profarma | Analyst Coverage
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IR contacts
Max Fischer | Chief Financial and IR Officer
Beatriz Diez | IR Manager
Phone number: 55 (21) 4009-0276 | E-mail: [email protected] | www.profarma.com.br/ri