Quarterly Earnings Report                                                               April 26, 2013
            1Q13                    

 

Financial Highlights:
(All figures are expressed in millions of Mexican pesos. Comparisons are made with the same period of 2012, unless otherwise stated. Figures may vary due to rounding practices).

Mexico City, Mexico, April 26, 2013.  Grupo Casa Saba (SAB) (“Saba”, “GCS”, “the Company” or “the Group”), one of the leading Mexican distributors of pharmaceutical products as well as health, beauty aids and consumer goods and publications and one of the most important pharmacy chains in Latin America, announced its consolidated financial and operating results for the first quarter of 2013.

QUARTERLY EARNINGS


IIn the first quarter of 2013, competition in the distribution and marketing of pharmaceutical products, health and beauty aids, and consumer goods prevailed in Mexico as well as in the other Latin America countries in which we operate, mainly due a larger number of participants in the markets in which we operate. Our operating strategy has been to maintain emphasis on improving efficiency levels and controlling logistic costs and expenses, as well as offering competitive prices, generating positive results in practically all our divisions. At the sales level, we are continue to focusing on improving the availability of the most in-demand products for our clients in wholesale and in our pharma network, as well as improving the care and service of our stock sales. In regards to growth, keeping in line with our strategy, allowed us to strengthen our presence in the markets in which we already operate, as well as to improve the knowledge of the brands with which we operate.

NET SALES

Net sales for the quarter totaled $11,016.7 million, a decrease of 8.5% compared to $12,035.3 million in 1Q2012.

SALES BY DIVISON



DISTRIBUTION DIVISION

HEALTH, BEAUTY, CONSUMER GOODS, GENERAL MERCHANDISE AND OTHER

Sales from our Pharma, Health, Beauty and Consumer Goods division totalized $5,218.8 million. Compared to the same quarter last year a 8.4% decrease was resulted mainly due the disincorporation of Citem Publications. In terms of total sales, this division’s percentage remained at 47.3% in 1Q2012 and in the 1Q2013.

GOVERNMENT PHARMA

Quarterly sales in our Government Pharma division totalized $359.6 million. This division registered an 18.4% decrease in sales compared to the first quarter of 2012, product of a deferral on the date of tenders.
In terms of total sales, this division represented 3.7% in 1Q2012 and 3.3% in the 1Q2013.

RETAIL PHARMACY

During the first quarter of the year, sales from our Retail Pharmacy division reached $5,438.3 million. Compared to the same quarter last year, the decrease was of 7.8%. This was mainly due the sale of Brazil and Peru units. This division’s percentage of the Group’s overall sales rose to 49.4% vs 49.0% in the 1Q2012.

As a result, the sales mix for the first quarter of 2012 was as follows:


                                                 Division                             % of Sales
                                         Retail Pharmacy                            49.4%
                                       Total Distribution                           50.6%
                                    Pharma, Health & Beauty                    47.3%
                                     Government Pharma                            3.3%

                                                 TOTAL                                100.0%
                                        


GROSS INCOME

During the first quarter of 2013, gross income reached $1,888.4 million pesos, amount 13.3% lower than the gross income reached in the first quarter of 2012. This was mainly due a decrease in sales in our distribution and government areas.

OPERATING EXPENSES

Operating expenses in the first quarter of 2013 resulted in $1,620.9 million. This represents a decrease of $189.0 million pesos, or 10.4%, compared to the same period of the previous year. This change was mainly by the management strategy to reduce expenses in all the areas of the company.
As a percentage of total sales, operating expenses represented 14.7% during the first quarter of 2013 compared to 15.0% during the same period of 2012.

OPERATING INCOME

Quarterly operating income for 1Q2013 was $267.5 million, an amount 27.7% lower than the $370.2 million reported in 1Q2012. This decrease in operating income was the result of the decline in sales and disincorporation of companies.

Operating income margin for the 1Q2013 was 2.43%, versus 3.1% in 1Q2012.

OPERATING INCOME PLUS DEPRECIATION AND AMORTIZATION

EBITDA for 1Q2013 was $348.3 million, a lower amount compared to the $478.9 million reported in the first quarter of 2012.

EBITDA margin for the first quarter of 2013 was 3.2%.

COMPREHENSIVE COST OF FINANCING (CCF)

The Group’s CCF reached $213.9 million in 1Q2013, 18.6% lower than the CCF reported during 1Q2012.

This decrease was primarily due to minor debt.

NET DEBT

The Company’s net debt at the end of 1Q2013 was reduced to $9,315.7 million pesos. A 2.7% decrease with respect of last year.

OTHER EXPENSES (INCOME)

During the first quarter of the year, other expenses totaled $3.3 million. This represents a change of $502.2 million mainly from earning obtained from the disincorporation of Peru in the first quarter 2012.

It is important to mention that the results listed in this line item are derived from activities outside of the company’s normal business operations and, as a result, they are not necessarily recurrent.

TAX PROVISIONS

Tax provisions for the first quarter of 2013 were $54.6 million, an amount lower than the $135.7 million reported in 1Q2012.

NET INCOME

In the first quarter 2013 GCS recorded a net loss of $4.3 million, while in the same period last year a net profit of $470.3 million was registered. This change was mainly due non-recurrent earnings obtained in 2012 from the sale of the operations in Peru.

Analysis Coverage: Through the Bolsa Mexicana de Valores program, Independent Analyst, Grupo Casa Saba counts with the coverage of Morningstar.

The 265.4 million shares issued by Grupo Casa Saba are listed on the Mexican Stock Exchange under the symbol “SAB”.

Grupo Casa Saba was founded in 1892 and is one of the leading distributors of pharmaceutical products, beauty, personal care and consumer goods, general merchandise, publications and other goods in Mexico.  With more than 115 years of experience, the Company distributes to the majority of pharmacies, chains, self-service and convenience stores, as well as other specialized national chains. With the acquisition of FASA in October of 2010 the company now has retail pharmacy outlets located in Mexico, Chile and Brazil.

 As a precautionary note to investors, except for the historic information contained herein, certain topics discussed in this document constitute forward-looking statements.  Such topics imply risks and uncertainties, including the economic conditions in Mexico and those countries in which Grupo Casa Saba operates, directly or indirectly, including the United States of America, Brazil and Chile, as well as variations in the value of the Mexican peso as compared with the currencies of the previously-mentioned countries.



Contacts:
GRUPO CASA SABA                                     IR Communications:
Harish Dadoo González                                    Jesús Martínez Rojas


 

GRUPO CASA SABA, S.A.B. DE C.V.

              Figures are expressed in thousands of Mexican pesos as of March 2013                 Jan-Mar   Jan-Mar   Difference Income Statement 2011 % of sales 2012 % of sales $ % NET SALES
12,035,304
100.00%
11,016,746
100.00%
1,018,559
(8.46%)
COST OF SALES
9,855,076
81.88%
9,128,265
82.86%
726,811
(7.37%)
Gross Profit
2,180,228
18.12%
1,888,481
17.14%
291,747
(13.38%)
Operating Expenses
Sales Expenses
299,426
2.49%
177,396
1.61%
122,031
(40.75%)
Administrative Expenses
1,510,580
12.55%
1,443,545
13.10%
67,035
(4.44%)
OPERATING EXPENSES
1,810,006
15.04%
1,620,940
14.71%
189,066
(10.45%)
 
Operating Income
370,222
3.08%
267,541
2.43%
102,682
(27.74%)
COMPREHENSIVE COST OF FINANCING
Interest Paid
270,985
2.25%
240,345
2.18%
30,640
(11.31%)
Interest (Earned)
33,901
(0.28%)
24,575
(0.22%)
9,326
(27.51%)
Exchange Loss (Gain)
25,973
0.22%
1,849
(0.02%)
27,822
NC
Monetary Position (gain)
0
0.00%
0
0.00%
0
0.00%
Comprehensive Cost of Financing
263,057
2.19%
213,921
1.94%
49,136
(18.68%)
 
OTHER EXPENSES (INCOME), net
498,913
(4.15%)
3,298
0.03%
502,211
NC
 
 
 
NET INCOME BEFORE TAXES
606,078
5.04%
50,322
0.46%
555,756
(91.70%)
 
PROVISIONS FOR:
Income Tax
135,705
1.13%
54,683
0.50%
81,022
(59.70%)
Asset Tax
0
0.00%
0
0.00%
0
0.00%
Deferred Income Tax
0
0.00%
0
0.00%
0
0.00%
Profit sharing due
0
0.00%
0
0.00%
0
0.00%
Deferred Profit sharing due
0
0.00%
0
0.00%
0
0.00%
Total taxes
135,705
1.13%
54,683
0.50%
81,022
(59.70%)
 
Net Income Before Extraordinary Items
470,373
3.91%
4,361
(0.04%)
474,734
NC
 
Extraordinary Items (Income)
0
0.00%
0
0.00%
0
0.00%
Net Income
470,373
3.91%
4,361
(0.04%)
474,734
NC
 
 
Depreciation and Amortization
108,766
0.90%
80,813
0.73%
27,953
(25.70%)
Operating income plus Depreciation and Amortization
478,988
3.98%
348,353
3.16%
130,635
(27.27%)
 
Net Income corresponding to Minority Interest
10,153
1,833
0.02%
8,320
(81.95%)

GRUPO CASA SABA, S.A.B. DE C.V.

BALANCE SHEET

Figures are expressed in Mexican pesos as of March 2013
 
QUARTER CURRENT YEAR
CLOSE PRIOR YEAR
 
AMOUNT
AMOUNT
TOTAL ASSETS
30,047,810
32,501,016
 
CURRENT ASSETS
19,237,831
21,231,243
CASH AND CASH EQUIVALENTS
1,059,989
1,068,257
CLIENTS (NET)
7,514,566
7,599,268
CLIENTS
8,992,492
9,018,164
ALLOWANCE FOR DOUBTFUL ACCOUNTS
-1,477,926
-1,418,897
OTHER ACCOUNTS RECEIVABLES (NET)
3,645,249
4,665,028
INVENTORIES
7,005,455
7,885,983
OTHER CURRENT ASSETS
12,572
12,707
 
LONG TERM
21,025
36,986
INVESTMENTS IN SHARES OF SUBSIDIARIES AND 
ASSOCIATED COMPANIES
21,025
36,986
PROPERTY MACHINARY AND EQUIPMENT NET
2,960,333
3,040,769
PROPERTY
2,382,171
2,471,561
MACHINERY AND EQUIPMENT
1,480,240
1,604,994
OTHER EQUIPMENT
2,452,925
2,555,423
ACCUMULATED DEPRECIATION
-3,383,082
-3,622,213
CONSTRUCTION IN PROGRESS
28,079
31,003
INTANGIBLE ASSETS (NET)
6,662,964
6,990,394
GOODWILL
2,590,255
2,809,508
BRANDS
2,611,131
2,719,238
RIGHTS AND LICENSING
1,445,125
1,445,315
OTHER INTANGIBLE ASSETS
16,453
16,332
OTHER NON CURRENT ASSETS
1,165,657
1,201,624
ADVANCE PAYMENTS
50,288
23,881
DEFERRED CHARGES (NET)
OTHERS
1,115,369
1,177,743
 
TOTAL LIABILITIES
24,327,816
26,020,026
 
CURRENT LIABILITIES
13,115,522
14,302,646
BANK CREDITS
2,306,030
2,487,022
SUPPLIERS
10,339,148
11,311,565
TAXES PAYABLE
470,344
504,060
OTHER CURRENT LIABILITIES
3,206,342
3,358,890
EMPLOYEE BENEFITS
280,710
200,771
OTHER CURRENT LIABILITIES
2,925,632
3,158,119
NON CURRENT LIABILITIES
8,069,703
8,161,309
BANK CREDITS
8,069,703
8,161,309
OTHER LIABILITIES
-63,751
197,182
 
SHAREHOLDERS' EQUITY
5,719,994
6,480,990
 
CONTRIBUTED CAPITAL
2,592,922
2,503,875
CAPITAL STOCK PAID (NOMINAL)
766,952
677,903
CAPITAL STOCK PAID UPDATE
956,093
956,094
PREMIUM ON STOCK SOLD
869,877
869,878
CAPITAL INCREASE (DECREASE)
3,127,072
3,977,115
ACCUMULATED PROFIT AND LEGAL RESERVE
2,069,233
3,059,885
RESERVE FOR STOCK REPURCHASE
1,062,200
1,062,200
PROFIT
-4,361
-144,970