Healthcare
Monthly Report | January 2014
Market Data and
Performance
Key Figures and
Capitalization
Multiples
Margins, Profitability
and Efficiency
Same Stores Sales
(SSS)
Companies’ Overview
and Financials
Last Reports
Andre Parize
Tel.: +55 11 5171-5870
[email protected]
Fernando Salazar
Tel.: +55 11 5171-5873
[email protected]
Please refer to page 20 of this report for important disclosures. All reports are available on Bloomberg (type BVSE<GO>) and Thomson Reuters.
Market Data
Price (R$)
Cover
Company
Ticker
30-Oct-13
OdontoPrev
05-Nov-13
Target
Upside
# of Shares
Mkt Cap
Mkt Cap
Free
ADTV R$ M
(M)
Current
(R$ M)
Target
(R$M)
Float
3 months
1w
1mo
3mo
YTD
1y
Rating
Change
3-Jan
Price (R$)
2014
ODPV3
9.68
10.20
5.4%
MP
531.3
5,142.9
5,419.2
48.7%
16.9
-0.7%
3.9%
0.6%
0.3%
-8.6%
Brasil Pharma
BPHA3
6.52
10.10
54.9%
MP
254.6
1,671.6
2,572.0
45.8%
5.5
-5.0%
-11.4%
-18.5%
-4.1%
-54.4%
05-Nov-13
Raia Drogasil
RADL3
14.93
19.60
31.3%
MP
330.4
4,932.7
6,475.6
58.0%
16.5
0.5%
-7.2%
-14.3%
1.8%
-35.3%
05-Nov-13
Profarma
PFRM3
18.82
26.60
41.3%
OP
33.5
625.0
892.3
39.1%
5.2
-0.3%
-0.9%
4.2%
-1.1%
32.2%
14-Dec-13
Fleury
FLRY3
18.40
21.00
14.1%
MP
156.3
2,875.8
3,282.2
37.5%
6.9
-0.1%
-7.3%
1.8%
-0.7%
-15.9%
14-Dec-13
Dasa
DASA3
14.83
15.80
6.5%
OP
311.8
4,624.0
4,926.5
51.3%
18.9
-0.5%
22.5%
21.0%
0.5%
6.8%
1,618.0
19,872.0
23,567.6
49.5%
69.9
-0.6%
2.4%
0.3%
0.2%
-15.3%
Update
TOTAL
18.6%
Stock Performance
1 Week
1 Month
Year to Date
22.5%
0.5%
1.8%
0.5%
-0.5% -0.7%
-1.5%
0.3%
3.9%
-0.7%
0.3%
-1.1%
-2.0%
-0.9%
-7.2% -7.3%
Source(s): Bloomberg and Votorantim Corretora.
PFRM3
FLRY3
ODPV3
DASA3
RADL3
BPHA3
FLRY3
RADL3
IBOV
ODPV3
PFRM3
2
BPHA3
-4.1%
-11.4%
DASA3
BPHA3
IBOV
ODPV3
DASA3
PFRM3
FLRY3
RADL3
-5.0%
IBOV
-0.1% -0.3%
Key Figures
R$ Million
Company
Ticker
OdontoPrev
Net Revenue
EBITDA
Net Income
CAGR 12-14
2012
2013E
2014E
2012
2013E
2014E
2012
2013E
2014E
Revenue
EBITDA
Net Income
ODPV3
955
1,067
1,179
227
277
306
146
187
234
11.1%
16.1%
26.8%
Brasil Pharma
BPHA3
3,094
3,550
4,142
191
188
232
70
46
81
15.7%
10.3%
7.6%
Raia Drogasil
RADL3
5,594
6,471
7,460
326
355
432
154
149
164
15.5%
15.2%
3.3%
Profarma
PFRM3
3,803
4,401
5,218
92
124
178
42
52
84
17.1%
39.0%
40.6%
Fleury
FLRY3
1,502
1,675
1,862
315
300
346
107
81
116
11.3%
4.8%
4.1%
Dasa
DASA3
2,264
2,483
2,684
407
433
502
85
123
182
8.9%
11.0%
46.7%
17,212
19,647
22,544
1,558
1,678
1,997
603
638
861
14.4%
13.2%
19.5%
TOTAL
Capitalization
R$ Million
Company
Ticker
OdontoPrev
Market Cap
Net Debt
EV
Shareholders' Equity
Total Assets
Current
2012
2013E
2014E
2012
2013E
2014E
2012
2013E
2014E
2012
2013E
2014E
ODPV3
5,143
-218
-360
-332
4,925
4,782
4,811
700
681
684
1,036
1,144
1,112
Brasil Pharma
BPHA3
1,672
407
201
237
2,079
1,872
1,908
1,543
1,583
1,659
2,903
2,890
3,004
Raia Drogasil
RADL3
4,933
25
56
77
4,958
4,989
5,010
2,265
2,356
2,483
3,340
3,546
3,830
Profarma
PFRM3
625
173
311
306
798
936
931
561
764
827
1,431
2,033
2,188
Fleury
FLRY3
2,876
415
416
399
3,290
3,292
3,275
1,706
1,726
1,813
2,738
3,231
3,325
Dasa
DASA3
4,624
847
862
791
5,471
5,486
5,415
2,607
2,700
2,837
4,272
4,293
4,441
19,872
1,649
1,485
1,479
21,521
21,357
21,351
9,382
9,809
10,302
15,720
17,138
17,900
TOTAL
Source(s): Companies and Votorantim Corretora.
3
Multiples
Current Price Multiples
Company
Ticker
OdontoPrev
EV/EBITDA
P/E
P/BV
2012
2013E
2014E
2012
2013E
2014E
2012
2013E
2014E
ODPV3
21.7
17.2
15.7
11.5
8.9
7.1
2.4
2.5
2.4
Brasil Pharma
BPHA3
10.9
9.9
8.2
23.8
36.3
20.6
1.1
1.1
1.0
Raia Drogasil
RADL3
15.2
14.0
11.6
32.0
33.1
30.0
2.2
2.1
2.0
Profarma
PFRM3
8.6
7.5
5.2
14.8
12.1
7.5
1.1
0.8
0.8
Fleury
FLRY3
10.5
11.0
9.5
5.9
7.7
5.4
0.4
0.4
0.3
Dasa
DASA3
13.4
12.7
10.8
7.4
5.1
3.4
0.2
0.2
0.2
13.8
12.7
10.7
32.9
31.1
23.1
2.1
2.0
1.9
TOTAL
Target Price Multiples
Company
Ticker
OdontoPrev
EV/EBITDA Target
P/E Target
P/BV Target
2012
2013E
2014E
2012
2013E
2014E
2012
2013E
2014E
ODPV3
22.9
18.2
16.6
37.2
28.9
23.1
7.7
8.0
7.9
Brasil Pharma
BPHA3
15.6
14.7
12.1
36.7
55.8
31.7
1.7
1.6
1.6
Raia Drogasil
RADL3
20.0
18.4
15.2
42.1
43.5
39.4
2.9
2.7
2.6
Profarma
PFRM3
11.5
9.7
6.7
21.1
17.2
10.7
1.6
1.2
1.1
Fleury
FLRY3
11.7
12.3
10.6
30.8
40.5
28.4
1.9
1.9
1.8
Dasa
DASA3
14.2
13.4
11.4
58.2
40.0
27.0
1.9
1.8
1.7
16.2
14.9
12.5
39.1
36.9
27.4
2.5
2.4
2.3
TOTAL
Source(s): Companies and Votorantim Corretora.
4
Margins, Profitability and Efficiency
Margins
Company
Ticker
OdontoPrev
Gross Margin
EBITDA Margin
Net Margin
2012
2013E
2014E
2012
2013E
2014E
2012
2013E
2014E
ODPV3
49.2%
52.7%
52.0%
23.8%
26.0%
26.0%
15.2%
17.6%
19.9%
Brasil Pharma
BPHA3
30.6%
30.2%
30.0%
6.2%
5.3%
5.6%
2.3%
1.3%
2.0%
Raia Drogasil
RADL3
26.7%
26.9%
27.0%
5.8%
5.5%
5.8%
2.8%
2.3%
2.2%
Profarma
PFRM3
4.8%
12.5%
13.3%
2.4%
2.8%
3.4%
1.1%
1.2%
1.6%
Fleury
FLRY3
26.9%
23.7%
24.5%
21.0%
17.9%
18.6%
7.1%
4.8%
6.2%
Dasa
DASA3
30.9%
31.1%
32.3%
18.0%
17.5%
18.7%
3.7%
5.0%
6.8%
Profitability and Efficiency
Company
Ticker
OdontoPrev
Asset Turnover
Leverage
ROE
ROA
ROIC
2012
2013E
2014E
2012
2013E
2014E
2012
2013E
2014E
2012
2013E
2014E
2012
2013E
2014E
ODPV3
0.9
0.9
1.1
1.5
1.7
1.6
20.8%
27.6%
34.2%
14.1%
16.4%
21.1%
23.1%
30.2%
34.6%
Brasil Pharma
BPHA3
1.1
1.2
1.4
1.9
1.8
1.8
4.5%
2.9%
4.9%
2.4%
1.6%
2.7%
3.5%
4.2%
6.1%
Raia Drogasil
RADL3
1.7
1.8
1.9
1.5
1.5
1.5
6.8%
6.3%
6.6%
4.6%
4.2%
4.3%
4.8%
5.4%
6.5%
Profarma
PFRM3
2.7
2.2
2.4
2.5
2.7
2.6
7.5%
6.8%
10.1%
3.0%
2.5%
3.8%
14.0%
12.3%
16.5%
Fleury
FLRY3
0.5
0.5
0.6
1.6
1.9
1.8
6.3%
4.7%
6.4%
3.9%
2.5%
3.5%
6.3%
5.6%
6.7%
Dasa
DASA3
0.5
0.6
0.6
1.6
1.6
1.6
3.2%
4.6%
6.4%
2.0%
2.9%
4.1%
5.8%
6.1%
6.5%
1.1
1.1
1.3
1.7
1.7
1.7
6.4%
6.5%
8.4%
3.8%
3.7%
4.8%
11.3%
13.0%
15.9%
TOTAL
Source(s): Companies and Votorantim Corretora.
5
Top-line Growth, SSS and Mature Stores
BR Pharma
Raia Drogasil
30.0%
30.0%
25.0%
25.0%
20.0%
20.0%
15.0%
15.0%
10.0%
10.0%
5.0%
5.0%
0.0%
0.0%
1Q11 2Q11 3Q11 4Q11 1Q12 2Q12 3Q12 4Q12 1Q13 2Q13 3Q13
Top-line growth YoY
Source(s): Companies and Votorantim Corretora.
SSS
1Q11 2Q11 3Q11 4Q11 1Q12 2Q12 3Q12 4Q12 1Q13 2Q13 3Q13
Top-line growth YoY
Mature Stores
6
SSS
Mature Stores
DASA – Overview(1/2)
Basics
Description
DASA3
DASA is the largest private medical diagnostic Company in Latin America, accounting
for 26 different brands, through 12 states and the Federal District. The Company has
521 attendance units, including ambulatories and hospitals, offering three levels of
services: Premium, Executive and Basic, with different brands.
 Positive
- Relevant scale in its clinical and lab-to-lab operation;
- Scale Economy;
- Diversified revenue base;
- Focus on service integration and cost reduction.
- Bargaining power of operators of health care plans.
- Bargaining power from suppliers.
- Execution risks regarding the recent management and shareholder’s change.
Shareholder’s Structure
12.03%
Dulce
Pugliese de
Godoy
Bueno
Oppenheimer
Petros
11.56%
Source(s): Companies and Votorantim Corretora.
Funds
10.00%
10.10%
14.8
Total Potential Return:
6.5%
Target Price (R$):
15.8
Free Float (%):
51.3%
Recommendation:
Outperform
Market Cap (R$ million):
4,624.0
Short-Term View:
Positive
Enterprise Value (R$ million):
5,415.4
Footprint
 Negatives
Edson de
Godoy
Bueno
Current Price (R$):
Tarpon
Others
5.00%
51.31%
7
DASA – Financials (2/2)
Investment Thesis
Financials
2012
2013E
2014E
2015E
Net Revenues
2,264.1
2,483.3
2,684.0
2,857.9
COGS
(1,564.9)
(1,711.9)
(1,818.2)
(1,938.0)
Gross Profit
699.2
771.4
865.8
919.9
SG&A
(454.3)
(483.2)
(509.5)
(535.4)
EBITDA
407.3
433.4
502.3
545.7
EBITDA Margin
18.0%
17.5%
18.7%
19.1%
EBIT
313.3
329.0
356.3
384.5
Net Financial Results
(113.7)
(97.0)
(80.2)
(76.3)
Taxes
(46.1)
(68.2)
(93.9)
(104.8)
Net Profit
84.7
123.0
182.2
203.4
Net Margin
3.7%
5.0%
6.8%
7.1%
P/E
47.7
32.8
22.2
19.9
EV/EBITDA
12.0
11.3
9.6
8.7
ROE
3.2%
4.6%
6.4%
6.8%
ROA
2.0%
2.9%
4.1%
4.4%
ROIC
5.8%
6.1%
6.5%
6.9%
- Company’s turnaround;
Financials
- Relevant scale in its clinical and lab-to-lab operation;
- After CADE’s merger approval the Company may move on with its strategic
position, through organic growth and M&A in other regions;
- Natural industry consolidator.
Revenue Breakdown
Public Sector
7%
Lab-to-Lab Market
11%
Valuation / Returns
Source(s): Companies and Votorantim Corretora.
Inpatient Market
10%
Outpatient Market
73%
8
Fleury – Overview (1/2)
Basics
Description
FLRY3
Fleury Group is the second largest provider of medical diagnostic services in the
health care industry in Brazil. Fleury brand name is highly rated by patients, doctors,
hospitals and health insurance providers. The Group has a network of 174 ambulatory
and diagnostic centers in hospitals.
 Positive
- Fleury brand’s reputation and position make it a market leader in the Brazilian
medical diagnostic industry;
- Prominent positioning on premium segment;
- Innovation and R&D.
18.4
Target Price (R$):
21
Recommendation:
Marketperform
Short-Term View:
Negative
Footprint
 Negative
- Bargaining power of operators of health care plans;
- Bargaining power from suppliers;
- Difficulties to improve results in regional brands.
Shareholder’s Structure
Source(s): Companies and Votorantim Corretora.
Current Price (R$):
9
Total Potential Return:
14.1%
Free Float (%):
37.5%
Market Cap (R$ million):
2,875.8
Enterprise Value (R$ million):
3,274.6
Fleury – Financial (2/2)
Investment Thesis
Financial
2012
2013E
2014E
2015E
Financials
- Downward trend on margins and profitability;
Net Revenues
1,501.8
1,675.3
1,861.6
2,021.4
COGS
(1,098.5)
(1,278.4)
(1,406.1)
(1,522.3)
Gross Profit
403.3
396.9
455.5
499.1
SG&A
(188.7)
(198.7)
(212.0)
(224.5)
EBITDA
314.8
299.5
345.9
385.7
EBITDA Margin
21.0%
17.9%
18.6%
19.1%
EBIT
214.5
198.2
243.5
274.6
Net Financial Results
(58.6)
(60.8)
(68.3)
(66.3)
Taxes
(49.2)
(56.5)
(59.6)
(70.8)
Net Profit
106.7
81.0
115.6
137.4
Net Margin
7.1%
4.8%
6.2%
6.8%
P/E
27.7
36.5
25.6
21.5
EV/EBITDA
10.7
11.3
9.7
8.5
ROE
6.3%
4.7%
6.4%
7.2%
ROA
3.9%
2.5%
3.5%
4.0%
ROIC
6.3%
5.6%
6.7%
7.5%
- Competition in premium brands and difficulties to improve results in regional brands;
- Rumors on the divestment from Core Participações, thus generating volatility in the
short term.
Revenue Breakdown
Hospitals
14%
Valuation / Returns
Source(s): Companies and Votorantim Corretora.
PSC
83%
Lab-to-Lab
2%
Preventive
Medicine
1%
10
OdontoPrev – Overview (1/2)
Basics
Company’s Description
ODPV3
OdontoPrev is the leading dental benefits Company in Latin America with over 6
million of members. It provides oral health solutions, provided by a specialized
network of more than 25 thousand dentists. The Company is listed in BM&F Bovespa
Novo Mercado since 2006 and is controlled by Bradesco Seguros.
 Positive
Current Price (R$):
9.7
Total Potential Return:
5.4%
Target Price (R$):
10.2
Free Float (%):
48.7%
Recommendation:
Marketperform
Market Cap (R$ million):
5,142.9
Short-Term View:
Negative
Enterprise Value (R$ million):
4,811.4
- Largest DCO in the market, with high-quality proprietary IT and actuarial experience
- Portfolio of diversified products
- Management with proven track-record
- 100% dividend payout
 Negative
OdontoPrev’s Portfolio Mix
- Increase in ANS regulations
- Deceleration in formal jobs' growth rate
- Increase DLR
SMEs
7%
Individuals
5%
SMEs
11%
Individuals
5%
Shareholders’ Structure
Bradesco
50.00%
Management
1.72%
Free Float
48.24%
Corporate
88%
Total: 5,533 thousand lives
Source(s): Companies and Votorantim Corretora.
11
Corporate
84%
Total: 6,102 thousand lives
OdontoPrev – Overview (2/2)
Cash (R$ Million)
Financials
2012
2013E
2014E
2015E
Net Revenues
955.5
1,067.1
1,178.9
1,297.4
COGS
(485.5)
(504.4)
(565.3)
(618.2)
Gross Profit
470.0
562.7
613.6
679.2
DLR
49.2%
47.8%
48.0%
47.7%
SG&A
(259.0)
(284.1)
(310.1)
(338.7)
EBITDA
227.0
277.4
306.2
343.7
EBITDA Margin
23.8%
26.0%
26.0%
26.5%
EBIT
221.8
272.2
300.6
337.6
Net Financial Results
13.2
12.6
12.2
4.1
Taxes
(74.0)
(96.6)
(74.3)
(98.0)
Net Profit
145.6
187.5
234.1
239.2
Net Margin
15.2%
17.6%
19.9%
18.4%
Financials
360
332
295
267
2015
2016
218
2012
2013
2014
Number of Members Evolution
4,978
5,533
5,976
6,225
6,525
6,867
Valuation / Returns
P/E
35.3
27.4
22.0
21.5
EV/EBITDA
21.2
17.3
15.7
14.0
ROE
19.9%
27.2%
34.3%
36.0%
ROA
14.3%
17.2%
20.8%
21.7%
ROIC
23.1%
30.2%
34.6%
38.4%
2010
Source(s): Companies and Votorantim Corretora.
12
2011
2012
2013
2014
2015
Brasil Pharma – Overview (1/2)
Basics
Company’s Description
BPHA3
BR Pharma is one of the largest drugstores chains in the country. Established in
December 2009, the Company operates under the regional brands Big Ben,
Guararapes, Drogaria Rosário, Sant’ana, and Mais Econômica. It also counts with
franchisees operating under the Farmais name.
 Positive
 Negative
0.3%
45.8%
Recommendation:
Marketperform
Market Cap (R$ million):
1,671.6
Short-Term View:
Negative
Enterprise Value (R$ million):
1,908.4
Operating
19.3%Operating
Partners
BTG
Pactual
31%
2
120
20
Partners
44.9% Float
6
14
95
28
433
Franchises
23% Free Float
12
100%
100%
100%
100%
Source(s): Companies and Votorantim Corretora.
100%
100%
1
15
727
Own
MGNT
39%
54.9%
Free Float (%):
Stores
Shareholders’ Structure
Sant’ana
Family
Total Potential Return:
10.1
1.160
- High risk of execution
- Short track record
- System and IT integration of regional platforms
- Increase in the competitiveness in coming years
7%
6.52
Target Price (R$):
Footprint
- Play in less mature markets
- High participation of generics and non-medicaments in the portfolio
- Potential synergies to be captured in coming periods
35.5% BTG
Current Price (R$):
100%
100%
100%
201
100%
13
121
69
15
8
Brasil Pharma – Financials (2/2)
Number of Stores and Financials
Debt (R$ Million) and Net Debt/EBITDA
2012
2013E
2014E
2015E
708.0
753.0
853.0
933.0
Gross Revenues
3,094.3
3,550.3
4,142.2
4,825.7
Net Revenues
2,876.0
3,276.5
3,822.9
4,453.7
COGS
(1,928.1)
(2,204.1)
(2,581.9)
(3,010.9)
Gross Profit
948.0
1,072.4
1,241.0
1,442.7
Gross Margin
30.6%
30.2%
30.0%
29.9%
SG&A
(778.0)
(900.9)
(1,003.1)
(1,134.0)
EBITDA
191.0
188.3
232.3
303.2
Number of Stores
2.1
Financials
1.2
EBITDA Margin
6.2%
5.3%
5.6%
6.3%
EBIT
138.9
121.2
152.9
223.5
Net Financial Results
(64.6)
(54.7)
(44.8)
(41.4)
Taxes
(0.4)
(15.4)
(27.0)
(45.5)
Net Profit
70.1
46.1
81.1
136.5
Net Margin
2.3%
1.3%
2.0%
2.8%
776.0
2012
1.0
651.1
0.9
632.0
2013
533.5
2014
Debt
2015
7.5
11.6
6.7
4.0
EV/EBITDA
10.0
10.1
8.2
6.3
ROE
4.5%
2.9%
4.9%
7.7%
ROA
2.4%
1.6%
2.7%
4.4%
ROIC
3.5%
4.2%
6.1%
8.4%
Source(s): Companies and Votorantim Corretora.
434.8
2016
Net Debt/EBITDA
Revenues Breakdown and Maturity of Stores (2Q13)
below 1
year
12.4%
NonMedicines
37.6%
Valuation / Returns
P/E
0.7
Branded
Medicine
45.5%
Generics
16.9%
14
above 3
years
60.5%
1 years 2 years
14.4%
2 years 3 years
12.7%
RaiaDrogasil – Overview (1/2)
Basics
Company’s Description
RADL3
Created in 2011 from the merger between Raia and Drogasil and becoming one of
Brazil’s largest drugstores chain. The Company operates with two different brands
Droga Raia and Drogasil.
 Positive
- Geographic presence in 12 units of the Federation, which represent 84% of the
pharmaceutical market in the country
- Long track record and expertise management
- Potential synergies to be captured from the merger, mainly in costs
Current Price (R$):
14.93
Total Potential Return:
31.3%
Target Price (R$):
19.6
Free Float (%):
58.0%
Recommendation:
Marketperform
Market Cap (R$ million):
4,932.7
Short-Term View:
Negative
Enterprise Value (R$ million):
5,009.7
Footprint
 Negative
- Playing in more mature markets, with high competition
- Increasing expenses due to the on-going investment plan and opening branches
- Overlap between Raia and Drogasil stores
MT
6
Shareholders’ Structure
Shares tied to
shareholders’ agreement
with a 10-year lock-up
Management
0.5%
GO
64
Free shares (voting
with shareholders’
agreement)
Raia’s majority
shareholders: 20%
Raia’s majority
shareholders
Drogasil’s majority
shareholders: 20%
Drogasil’s majority
shareholders
40.0%
Source(s): Companies and Votorantim Corretora.
7.8%
MS
8
Free Float
RS
18
51.7%
15
DF
45
MG
73
SP
524
PR
49
Total Stores - 906
456 Raia
450 Drogasil
SC
23
BA
15
ES
17
RJ
64
RaiaDrogasil – Financials (2/2)
Number of Stores and Financials
Debt (R$ Million) and Net Debt/EBITDA
2012
2013E
2014E
2015E
864
969
1,099
1,199
Gross Revenues
5,593.8
6,470.8
7,459.9
8,511.0
Net Revenues
5,380.7
6,250.1
7,205.6
8,220.8
COGS
(3,888.1)
(4,509.9)
(5,188.1)
(5,906.3)
Gross Profit
1,492.6
1,740.2
2,017.4
2,314.4
Number of Stores
0.1
0.2
0.2
0.1
192.2
192.9
192.9
192.9
192.9
2012
2013
2014
2015
2016
-0.7
Financials
Gross Margin
26.7%
26.9%
27.0%
27.2%
SG&A
(1,173.8)
(1,384.9)
(1,585.1)
(1,780.0)
EBITDA
325.8
355.4
432.3
534.4
EBITDA Margin
5.8%
5.5%
5.8%
6.3%
EBIT
213.6
198.4
257.5
350.8
Net Financial Results
(2.6)
(13.8)
(8.7)
(9.7)
Taxes
(53.2)
(35.7)
(84.6)
(116.0)
Net Profit
154.0
149.0
164.2
225.1
Net Margin
2.8%
2.3%
2.2%
2.6%
Debt
Revenues Breakdown and Maturity of Stores (2Q13)
32.0
33.1
30.0
21.9
EV/EBITDA
15.4
14.1
11.6
9.4
ROE
6.8%
6.3%
6.6%
8.4%
ROA
4.6%
4.2%
4.3%
5.4%
ROIC
4.8%
5.4%
6.5%
8.3%
Source(s): Companies and Votorantim Corretora.
above 3
years
12%
Branded
Rx
45.0%
Valuation / Returns
P/E
Net Debt/EBITDA
Generics
11.6%
16
HPC
28.2%
OTC
15.1%
below 1
year
11%
2 years 3 years
65%
1 years 2 years
12%
Profarma – Overview (1/2)
Basics
Company’s Description
PFRM3
Profarma is one of the main wholesale distributors in the country, delivering branded,
generic and OTC medicaments, B&PC products, as well as hospital products and
vaccines. In 2013, the Company acquired two drugstores chain located in the state of
RJ.
 Positive
- With 12 DCs the Company has the ability to cover 94% of the total domestic
pharmaceutical market
- Expanding its business through the acquisition of drugstores chain
- More consistent results from Pharma Distribution and Hospital and Specialties
Current Price (R$):
18.82
Total Potential Return:
41.3%
Target Price (R$):
26.6
Free Float (%):
39.1%
Recommendation:
Outperform
Market Cap (R$ million):
625.0
Short-Term View:
Positive
Enterprise Value (R$ million):
931.2
PFRM Distribution Footprint
Fortaleza – Ceará
 Negative
- Increase in the competitiveness in the sector pressuring margins
- End of tax benefits, reducing cross-docking practice
- Refraction in Pharma Distribution business due to the entrance in retail
- Execution risks involving the integration of drugstores
Recife - Pernambuco
Shareholders’ Structure
Salvador - Bahia
Brasília – Distrito Federal
Goiânia - Goiás
BMK
Participações
57.10%
99%
Locafarma
100%
Promovendas
Source(s): Companies and Votorantim Corretora.
Contagem – Minas Gerais
Free
Float
Serra – Espírito Santo
42.90%
100%
Farmadacta
São João de Meriti – Rio de Janeiro
São Carlos – São Paulo
São Paulo – São Paulo
Curitiba - Paraná
50%
Canoas – Rio Grande do Sul
Interagile
17
Profarma – Financials (2/2)
Debt (R$ Million) and Net Debt/EBITDA
Financials
2012
2013E
2014E
2.51
2015E
Financials
Gross Revenues
3,802.7
4,400.5
5,217.7
5,909.7
Net Revenues
3,233.1
3,773.4
4,489.9
5,086.3
COGS
(3,028.3)
(3,372.2)
(3,968.0)
(4,468.8)
Gross Profit
204.7
401.2
521.9
617.5
Gross Margin
11.9%
12.5%
13.3%
13.7%
SG&A
(120.3)
(407.1)
(493.4)
(560.6)
EBITDA
92.2
124.1
178.3
224.8
EBITDA Margin
2.6%
2.8%
3.4%
3.8%
EBIT
84.4
105.5
154.8
199.1
Net Financial Results
(28.6)
(32.6)
(37.1)
(38.3)
Taxes
(13.5)
(21.1)
(34.1)
(46.6)
Net Profit
42.3
51.8
83.6
114.2
Net Margin
1.3%
1.4%
1.9%
2.2%
1.63
14.8
12.2
7.6
5.5
EV/EBITDA
10.1
7.5
5.2
4.1
ROE
7.5%
6.8%
10.1%
12.5%
ROA
3.0%
2.5%
3.8%
4.8%
ROIC
14.0%
12.3%
16.5%
19.1%
Source(s): Companies and Votorantim Corretora.
1.72
1.31
492
483
474
466
2013
2014
2015
2016
223
2012
Debt
Net Debt/EBITDA
Number of Stores
Valuation / Returns
P/E
1.87
18
157
172
187
197
142
2012
2013
2014
2015
2016
Last Reports
Date
Company
December, 23
DASA3
December, 19
DASA3
December, 13
DASA3 / FLRY3
December, 3
Sector
Title
Pages
Controlling Shareholders Seek to Buy DASA’s
Remaining Stake
Investors' Day: Gradual Operational Improvement
Ahead
Link
1
20131223_Controlling Shareholders Seek to Buy DASA’s Remaining
Stake_DASA.pdf
1
20131219_Investors Day_DASA.pdf
Headwinds for Labs. No Clear Road Ahead.
42
20131213_Initiating Coverage_Laboratories.pdf
Healthcare Monthly - December 2013
15
20131203_Monthly_Healthcare.pdf
1
20131128_Investor’s Day – Operational Improvement and Challenges
Ahead_Drugstores.pdf
1
20131114_3Q13 Results_Brasil Pharma.pdf
1
20131113_3Q13 Results_Profarma.pdf
1
20131107_3Q13 Earnings Results_Raia Drogasil.pdf
Investor’s Day: Operational Improvement and
Challenges Ahead
3Q13 Results: Lower growth and higher selling
expenses
3Q13 Results: Missing Top-Line, but Margins
Remained Higher
3Q13 Earnings Results: In-Line Numbers, No
Surprises
November, 28
BPHA3 / RADL3
November, 14
BPHA3
November, 13
PFRM3
November, 7
RADL3
November, 6
Sector
Healthcare Monthly - November 2013
15
20131106_Monthly_Healthcare.pdf
November, 5
BPHA3 / RADL3 / PFRM3
Update and 3Q13 Preview – Challenging ST Outlook
Ahead, and Preference for PFRM
14
Update_Healthcare.pdf
October, 30
ODPV3
Update and 3Q13 Results
5
20131030_Update and 3Q13 Resutls_OdontoPrev.pdf
October, 23
ODPV3
3Q13 Earnings Preview
1
20131023_3Q13 Earnings Preview_OdontoPrev.pdf
October, 1
Sector
Healthcare Monthly - October 2013
15
20131001_Monthly_Healthcare.pdf
September, 9
BPHA3
Highlights from Visits to Drugstores in Bahia
1
20130909_Highlights from Visits to Drugstores in Bahia_Brasil Pharma.pdf
August, 25
PFRM3
Highlights from NDRS
1
20130828_Highlights from NDRS_Profarma.pdf
August, 15
PFRM3
2Q13 Earnings Results
1
20130815_2Q13 Earnings Results_Profarma.pdf
August, 15
BPHA3
2Q13 Earnings Results
1
20130815_2Q13 Earnings Results_Brasil Pharma.pdf
August, 8
RADL3
2Q13 Earnings Results
1
20130808_2Q13 Earnings Results_RaiaDrogasil.pdf
August, 6
ODPV3 / PFRM3 / RADL3
2Q13 Earnings Preview
3
20130806_2Q13 Earnings Preview_Healthcare.pdf
August, 5
Sector
Healthcare Monthly - August 2013
15
20130805_Monthly_Healthcare.pdf
July, 30
ODPV3
2Q13 Earnings Results
1
20130730_2Q13 Earnings Results_OdontoPrev.pdf
July, 25
ODPV3
2Q13 Earnings Preview
1
20130725_2Q13 Earnings Preview_OdontoPrev.pdf
July, 1
Sector
Healthcare Monthly - July 2013
15
20130701_Monthly_Healthcare.pdf
19
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Rating
Outperform
Criteria
Total return expectation by Votorantim Corretora is at least 10% higher than the return expected by Votorantim Corretora for the Ibovespa.
Marketperform
Total return expectation by Votorantim Corretora is in a range of 10% above to 10% below the return expected by Votorantim Corretora for the Ibovespa.
Underperform
Total return expectation by Votorantim Corretora is at least 10% lower than the return expected by Votorantim Corretora for the Ibovespa.
Under Review
Other Relevant Information
In compliance to CVM regulations, the analyst responsible for the preparation of this report hereby certifies that:
i.
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Corretora de Títulos e Valores Mobiliários Ltda.;
ii.
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Corretora de Títulos e Valores Mobiliários Ltda. or any of its controlled, controlling or affiliate companies;
The recommendations presented herein were extracted from Research Reports about the company/companies cited in this material, which were released by the equity research analysts of
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20