Grupo Casa Saba (NYSE: SAB)
Financial Highlights: (All figures are expressed in millions of
Mexican pesos. Comparisons are made with respect to the same period
of 2010, unless otherwise stated. Figures may vary due to rounding
practices).
-- GCS's net sales reached $12,446.2 million pesos during the
third quarter of 2011 -- Gross income was $2,338.9 million and the
gross margin reached 18.79% -- Operating expenses were $2,068.4
million pesos or 16.62% of total sales -- Operating income totaled
$270.5 million during 3Q2011, which resulted in an operating margin
of 2.17% -- Quarterly operating income plus depreciation and
amortization was $395.7 million -- The quarterly CCF resulted in a
cost of $298.2 due to higher interest payments -- Net income for
the quarter was $15.5 million -- As of September 30, 2011 the
Company's net debt reached $10,533.2 million pesos
Mexico City, Mexico, October 28, 2011. Grupo Casa Saba (SAB)
("Saba", "GCS", "the Company" or "the Group"), one of the leading
Mexican distributors of pharmaceutical products, health and beauty
aids, personal care and consumer goods, general merchandise,
publications and other products and one of the most important
pharmacy chains in Latin America, announces its consolidated
financial and operating results for the third quarter of 2011.
QUARTERLY EARNINGS
In the third quarter of 2011, the environment continued to be
highly competitive within the sector, which led us to emphasize to
an even greater extent our operating efficiency and savings
measures in all of the Group's business areas.
Our Distribution Division performed positively during the
period, particularly in the strengthening of its client-supplier
relationships, thus allowing us to better understand our clients'
needs, to distribute the products that they require more
efficiently and to improve the recuperation of the credit
portfolio.
In our warehouses, we continued with the task of increasing our
operating efficiency through an exhaustive analysis of route
efficiency and cost effectiveness as well as controls for packing
materials and supplies in general.
Results for the Group's Retail Pharmacy Division were also
positive both in terms of sales and productivity.
In terms of our financial structure and in compliance with the
originally established terms, during the month of August, the Group
converted the debt obtained to acquire FASA from short-term to
long-term debt.
We will continue focusing our efforts on improving the Group's
profitability level in the Distribution and Retail Pharmacy
Divisions, seeking to improve our market share while at the same
improving our operating efficiency.
NET SALES During the quarter the Group's
net sales reached $12,446.2 million pesos, which is not comparable
with the $7,460.0 million pesos registered in 3Q2010, given that in
that period FASA's operations (Retail Pharmacy Division) were not
consolidated in GCS. In cumulative terms, total sales reached
$37,312.8 million pesos by the end of September 2011.
SALES BY DIVISION (1)
DISTRIBUTION DIVISION
DISTRIBUTION - PRIVATE PHARMA Sales for
our Private Pharma division decreased 4.1% during the third quarter
of 2011, based on comparable figures, as a result of lower sales to
special accounts clients as well as some regional clients that
showed delays in payments.
This division represented 45.9% of the Group's total sales
during the third quarter of 2011.
DISTRIBUTION - GOVERNMENT PHARMA Sales
from our Government Pharma division grew 5.9% during the period,
from $340.1 million pesos in 3Q2010 to $360.1 million pesos in
3Q2011.
As a result, during the third quarter of 2011, this division
accounted for 2.9% of the Group's total sales.
HEALTH, BEAUTY, CONSUMER GOODS, GENERAL
MERCHANDISE AND OTHER In 3Q2011, the Health, Beauty, Consumer
Goods, General Merchandise and Other division posted a decrease in
sales of 4.7% compared to the same quarter of 2010 to reach $116
million pesos. This was primarily the result of fewer promotional
strategies in various product lines during the period.
As a percentage of the Group's total sales, this division
represented 0.9% during 3Q2011.
PUBLICATIONS Sales for CITEM, the
Company's publications distribution division, decreased 7.5% during
the third quarter of 2011 compared to 3Q2010. This decrease was
primarily the result of a reduction in the number of copies printed
of several magazines as well as the withdrawal from the market of
an important publishing company.
As a result, during the third quarter of 2011 the Publications
division generated 1.5% of GCS's total sales, or $191.4 million
pesos.
RETAIL PHARMACY In 3Q2011, sales from the
Retail Pharmacy division reached $6,099.7 million pesos. This was
higher than the $807.6 million pesos that it reported during the
same period of 2010, when FASA's sales were not consolidated. As a
result, this business unit produced 48.8% of the Group's overall
third quarter sales.
GROSS INCOME GCS's gross income for 3Q2011
reached $2,338.9 million. This figure is not comparable with the
$859.6 million pesos that were reported in 3Q2010 as FASA's
resulted were not consolidated during that time.
The gross margin for the quarter was 18.8%, 7.3 percentage
points higher than the 11.5% margin reported in 3Q2010. The
significant increase in the margin versus the previous year was due
to the consolidation of FASA. It is worth noting that our Retail
Pharmacy division operates with a gross margin level that is higher
than our Distribution division, due to the nature of its
business.
OPERATING EXPENSES During the third
quarter of 2011, GCS's operating expenses reached $2,068.4 million,
which is not comparable with the $602.6 million pesos registered
during the same period of the previous year, when FASA's results
were not consolidated. This increase was due to the fact that the
Retail Pharmacy business operates with a higher expense level than
does our Distribution business.
In 3Q2011, operating expenses accounted for 16.6% of the Group's
total sales while in 3Q2010, they represented 8.1% of total
sales.
OPERATING INCOME During the third quarter
of 2011, GCS's operating income totaled $270.5 million pesos, which
is not comparable with the $257.02 million pesos registered during
the same period of 2010 given that the consolidation of FASA had
not yet taken place.
The operating margin for the third quarter of 2011 was 2.2%.
OPERATING INCOME PLUS DEPRECIATION AND
AMORTIZATION Quarterly operating income plus depreciation and
amortization was $395.7 million pesos, which is not comparable with
the $274.1 million pesos reported in 3Q2010 as a result of FASA's
consolidation in the 3Q2011 figure.
The company's operating income plus depreciation and
amortization margin for the quarter was 3.2%.
NET DEBT As of September 30, 2011 GCS's
net debt was $10,553.2 million pesos.
COMPREHENSIVE COST OF FINANCING (CCF)
Grupo Casa Saba's CCF for the third quarter of 2011 resulted in a
cost of $298.2 million pesos. This was primarily due to the
increase in interest payments related to the credits obtained in
order to acquire FASA.
OTHER EXPENSES (INCOME) During the third
quarter of 2011, the Company reported an income in the Other
Expenses (Income) line item of $46.9 million pesos versus an income
of $22.6 million obtained during the same period of the previous
year. It is important to mention that the amounts listed in this
line item are derived from activities outside of the company's
normal business operations and are not necessarily recurrent.
TAX PROVISIONS Tax provisions for the
quarter totaled $3.7 million pesos.
Income tax for the period ending September 30, 2011 was $32.1
million pesos, and was partially offset by a deferred income tax
charge of -$28.4 million pesos.
NET INCOME The Group reported a net income
of $15.5 million pesos during the third quarter of 2011.
Consequently, the net margin for the quarter was 0.12%.
WORKING CAPITAL During the third quarter
of 2011, GCS's accounts receivable days were 49.1 days. Inventory
days at cost reached 65.3 days and accounts payable days were 76.3
days.
(1) As part of its growth strategy, Grupo Casa Saba has
completed acquisitions in several South American countries,
beginning in May 2008 with the acquisition of the Brazilian
pharmacy chain Drogasmil (Casa Saba Brasil). In October 2010, the
company acquired 97.8% of Farmacias Ahumada, S.A., a chain of more
than 1,200 pharmacies with operations in Chile, Mexico and Peru
and, as a result, created a new division known as "Retail
Pharmacy."
As a result, the majority of the figures presented in this
report are not comparable with those that were reported during the
same quarter of 2010.
Contacts: GRUPO CASA SABA Sandra Yatsko IR +52 (55)
5284-6672 Email Contact Alejandro Sadurni CFO Email Contact IR
Communications: Jesus Martinez Rojas +52 (55) 5644-1247 Email
Contact
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