Joao Alves de Queiroz, Chairman Hypermarcas.

1. The
brand
of
brands.
INSTITUTIONAL
PRESENTATION
N O V E M B E R
|
2 0 1 0

2. Disclaimer
This
release
contains
forward-­‐looking
statements
relaDng
to
the
prospects
of
the
business,
esDmates
for
operaDng
and
financial
results,
and
those
related
to
growth
prospects
of
the
Company.
These
are
merely
projecDons
and,
as
such,
are
based
exclusively
on
the
expectaDons
of
the
Company’s
management
concerning
the
future
of
the
business
and
its
conDnued
access
to
capital
to
fund
its
business
plan.
Such
forward-­‐looking
statements
depend,
substanDally,
on
changes
in
market
condiDons,
government
regulaDons,
compeDDve
pressures,
the
performance
of
the
Brazilian
economy
and
the
industry,
among
other
factors
and
risks
disclosed
in
the
Company’s
filed
disclosure
documents
and
are,
therefore,
subject
to
change
without
prior
noDce.
2

3. The
brand
of
brands.
AGENDA
Company
Overview
3

4. Focus
on
consumer
with
leadership
posiQon
in
many
markets
2009
Combined
Gross
Revenue
R$4.0
billion
The
brand
of
brands.
Health
&
Well-­‐being
Beauty
&
Home
Care
Personal
Care
&
Food
Total
2009
(1)
38%
47%
15%
2nd
Largest
naQonal
laboratory
Largest
self-­‐service
domesQc
player
Most
diversified
player
Over-­‐the
counter
#1
products
(OTC)
#1
Diapers
#2
Steel
Wool
#1
Branded
Generics
#1
Nail
Polish
#2
Sauces
#1
Condom
#1
Moisturizers
#1
Electric
InsecDcides
#1
Sweetener
#1
Men’s
Care
#1
Body
Oil
(1)
Pro-­‐forma
considering
the
acquisiDons
of
2009:
Hydrogen,
Pom
Pom,
Olla,
Jontex,
Neo
Química
and
2010:
Sapeka,
Sanifill,
York,
Luper
and
Mabesa.
4

5. Hypermarcas
is
the
largest
Consumer
Goods
player
in
Brazil
Hypermarcas
rank
in
Brazil’s
consumer
sector
Rank
Packaged
Goods
(HPC)
(1)
Rank
Total
Pharma
1
Unilever
1
Sanofi-­‐AvenDs
/
Medley
2
Hypermarcas
#1
2
EMS
Pharma
3
Procter
&
Gamble
3
Hypermarcas
#2
4
Colgate
4
Aché
5
L’Oréal
5
Eurofarma
6
Johnson
&
Johnson
6
NovarDs
7
Reckih
Benckiser
7
Pfizer
Source:
Euromonitor
and
IMS.
Note:
Dark
blue
numbers
denote
rank
with
the
Brazilian
market.
(1)
Does
not
consider
companies
only
focused
on
the
food
market.
5

6. Growth
strategy
model
enables
fast
growth
with
profitability
SynergisQc
AcquisiQons
Organic
Growth
• Enter
new
acracQve
segments
Profitable
• Relaunch
“dormant
brands”
• Consolidate
Markets
Growth
• Improve
distribuQon
• Focus
on
drugstores
and
• Foster
innovaQon
grocery
stores
channels
Low
Cost
OperaQng
Pladorm
• Economies
of
scale
and
scope
• MulQple
operaQonal
synergies
6

7. Growth
carefully
planned
on
“step-­‐by-­‐step”
steady
path
Stair
Case
Growth
Strategy
2010
acquisiQons:
A
new
round
Equity
Offering:
Accelerated
#21
AcquisiDons
since
2007
Growth
5.3
per
Year
IPO:
Further
Expansion
in
Consumer
Health
and
Well
Being
Entrance
in
the
Aquisições
desde
2007
OTC
&
Personal
Care
Started
pladorm
in
Cleaning
&
Food
2002
2006
2008
2009
2010
7

8. Company
strengths
are
on
branding,
low
cost
operaQons
and
strong
distribuQon
• Superior
value
proposiQons
to
consumers
• High
investments
in
adverQsing
and
promoQons
• ConQnuous
product
innovaQon
Leading
Brands
• Partnership
with
clients
• Reach
all
markets
naQonwide
• Focus
on
client
service
Efficient
OperaQons
Broad
DistribuQon
• Low-­‐cost
producer
• High
plant
producQvity
• Low
SG&A
• Fast
decision
making
process
8

9. IntegraQon
know-­‐how
and
organized
process
Planning
Phase
I
Phase
II
Phase
III
 Preserve
the
 Quick
Wins
 OperaQng
Fine
 Product
Market
Business
Tuning
Strategies
 Protect
market
 SG&A
reducDons
 Plant
 Stage
1:
share
and
sales
restructuring
MarkeDng
 Increase
plant
investments
 Adequate
systems
producDvity
 ReducDon
in
raw
material
 Stage
2:
Increase
 Maintain
the
and
packaging
market-­‐share
operaDons
stable
costs
and
distribuDon
 Retain
talents
 ReducDon
of
 Stage
3:
Product
 Brands
strategy
logisDc
costs
launches
and
definiDon
brand
extension
 Pre
IntegraQon
 12
months
 12
to
24
months
 3-­‐4
years
9

10. IntegraQon
status
of
acquired
companies
Phase
I
Phase
II
Phase
III
OperaDng
Fine
Planning
Quick
Wins
Growth
Tuning
10

11. Process
of
dormant
brand
relaunch
FAST
PLANNING
LAUNCHING
GROWTH
SUSTAINABILITY
Sales
Time
2.
IdenDfy
3.
Develop
4.
5.
Relaunch
1.
Discover
consumer
value
Reformulate
6.
Reinforce
with
full
Brand
DNA
insight
proposiDon
markeDng
mix
growth
support
11

12. Examples
of
brand
relaunching
2,2x
2,7x
2,4x
12

13. Process
of
dormant
brand
relaunch
FAST
PLANNING
LAUNCHING
SUSTAINABILITY
GROWTH
Sales
Time
13

14. CompeQQve
advantage
in
pharma
CUSTOMER
/
CLIENT
REACH
NaQonal
and
Strong
Established
Enhanced
Regional
Mass
Media
Medical
Call
Points
of
Sale
distribuQon
OTC
(over
the
counter)
Superior
MARKET
REACH
PrescripQon
(OTX
/
RX)
compeQQve
posiQon
Generics/Similars
14

15. Efficient
and
fast
new
product
launch
113
70
20
54
23
2009
2010
Launched
To
Be
Launched
At
ANVISA
15

16. Sustainable
growth
Growth
evoluQon
69%
60%
54%
54%
52%
21%
22%
23%
22%
13%
3Q09
4Q09
1Q10
2Q10
3Q10
LTM
Organic
Growth
LTM
Total
Growth
16

17. The
brand
of
brands.
AGENDA
Financials
17

18. Revenue
growth
Net
Revenue
(R$
million)
2.9X
2.8X
2.2X
836
1.6X
758
719
657
498
456
423
385
386
267
224
‘08
‘09
‘10
‘08
‘09
‘10
‘08
‘09
‘10
‘08
‘09
Q1
Q2
Q3
Q4
18

19. EBITDA
evoluQon
EBITDA
(R$
million)
(1)
(1) Gross of Marpex in 2Q10 of R$35mm and in 3Q10 of R$16mm.
19

20. Cash
Earnings
close
to
20%
of
Net
Revenue
Cash
Earnings
(R$
million)
(1)
(1) Gross of Marpex in 2Q10 of R$35mm and in 3Q10 of R$16mm.
20

21. Delivery
of
Cash
Earnings
per
share
LTM
Cash
Earnings
per
Share
(R$)
(1)
DilluQo
n
IPO
Farmasa
Follow
Neo
Follow
Sapeka
Events
on
1
Química
on
2
(1) Gross of Marpex in 2Q10 of R$35mm and in 3Q10 of R$16mm.
21