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Institutional Presentation Update | May 2011. 1st Quarter 2011. Key measures implemented in 1Q11. Interest rate increases Inflation acceleration Growth decelaration Maintenance levels of employment and income. Change in Macroeconomic Scenario. Increased prices
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InstitutionalPresentation Update | May 2011
Keymeasuresimplemented in 1Q11 • Interest rate increases • Inflationacceleration • Growthdecelaration • Maintenancelevelsofemploymentandincome Change in MacroeconomicScenario • Increasedprices • Reducedpaymentterms • Acceleratedintegrations • Reducedexpenses MeasurestakenbytheCompany
Sales Process 30% ofsales Retail Consumer HYPER WholeSaler / Distribuitor 70% ofsales Sell In Sell Out
Priceincreaseprocess Keyvariables 108% -5% -2% 60 106% -6% -3% 60 APR 104% -7% -4% 60 MAR 102% -8% -4% 60 Pricelist: Discount: Trade deals: Term: FEB 100% -10% -5% 90 JAN DEC Illustrative example, the figures are fictitious
Whatdid it happen? Lastyearwewereflexiblewiththecommercial package Atthebeginningofthisyear, wewerefirm to markthenew package conditions Manyclients, mainlytheindirects, partiallydidn´tplacetheirordersunderthenewconditions HealthySell out, Weaksell in: chaininventoriesdecreases
Sell in x Sell out x PC Inventoriylevels Sell-In x Sell-Out (3 monthsmovingaverage) R$ Million Oct/10 Nov/10 Dec/10 Jan/11 Feb/11 Mar/11 Sell In R$ Sell Out R$ TheoreticalInventory % Example for indirect clients at one of our Personal Care divisions.
Pharma – DemandEvolution in 1Q11 Market Evolution 37.2% 33.5% 14.7% 9.3% 18.0% Total Share: from 6.9% to 7.9%
Pharma – GenericsMarketEvolution MEDICAMENTOS - Mercado de Genéricos GenericMarketEvolution(volume) - Growth jan/10 feb/10 mar/10 apr/10 may/10 jun/10 jul/10 aug/10 sep/10 oct/10 nov/10 dec/10 jan/11 feb/11 HYPERMARCAS RNK (UNITS) HYPERMARCAS GENERICS MARKET
PC – KeyMarketTrends Market Trends Hyper Share * Value
Innovation 1st Q Launches 2011 Pipeline Comments • To reach 80% Top Genericsby Dec.11 • To launch “unique-Generics” • To launchMirrors, UmbrellasandInnovators Pharma 28 60 • To relaunchDenorex, Lucretin, Biorene, Aero Monange, Avanço Moband Profissional line • Relaunches: Paixão andPomPomdiapers Packagedgoods 108 >700
Ceci Project – PC Innovation Center • Product development laboratories • Studies of perception with the consumer • Market research 12
1Q11 ResultsSummary * * * * *Reference Base
Integrationupdate Potential (R$ MM) Implemented in 1Q11 (R$ MM) Target % Achieved 115 56 49% 2010 Acqusitions To finalize untilSep.11 2011 Acqusitions 135 94 70% Mantecorp To finalize until Jun.11 7 6 86% Mabesa To finalize until Jun.11 257 156 61% Overall Total To finalize 100% until Dec.11 .
Capital Structure 10 Year Bond Issuance
Leverage (R$ million) ConsidersBondsissuanceafter 1Q11 closing. Pro forma Net Debtdividedbyguidanceofminimum EBITDA of 2011 (R$ 1 billlion) 18
Organicgrowthmeasurement 2 methodologiescomparison ∆ Reference Base . ∆ SBS Net Revenues XT0 XT1
Reference Base Advantages Complete Explanation 2010 FixedBaseline ComparisonofIncomeStatementmainlines (Net Revenue, Gross Profitand EBITDA) It proves thesynergiesseizingprocess FacilitatestheResultsforecasting (quarterbyquarter)
Sensitivityanalysis Growth EBITDA Margins NEW GUIDANCE: > R$1 bi