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Institutional Presentation Update | May 2011

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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Institutional Presentation Update | May 2011

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  1. InstitutionalPresentation Update | May 2011

  2. 1st Quarter 2011

  3. Keymeasuresimplemented in 1Q11 • Interest rate increases • Inflationacceleration • Growthdecelaration • Maintenancelevelsofemploymentandincome Change in MacroeconomicScenario • Increasedprices • Reducedpaymentterms • Acceleratedintegrations • Reducedexpenses MeasurestakenbytheCompany

  4. Sales Process 30% ofsales Retail Consumer HYPER WholeSaler / Distribuitor 70% ofsales Sell In Sell Out

  5. 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

  6. Whatdid it happen? Lastyearwewereflexiblewiththecommercial package Atthebeginningofthisyear, wewerefirm to markthenew package conditions Manyclients, mainlytheindirects, partiallydidn´tplacetheirordersunderthenewconditions HealthySell out, Weaksell in: chaininventoriesdecreases

  7. 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.

  8. Pharma – DemandEvolution in 1Q11 Market Evolution 37.2% 33.5% 14.7% 9.3% 18.0% Total Share: from 6.9% to 7.9%

  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

  10. PC – KeyMarketTrends Market Trends Hyper Share * Value

  11. 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

  12. Ceci Project – PC Innovation Center • Product development laboratories • Studies of perception with the consumer • Market research 12

  13. Results

  14. 1Q11 ResultsSummary * * * * *Reference Base

  15. ResultsSummary in RB

  16. 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 .

  17. Capital Structure 10 Year Bond Issuance

  18. Leverage (R$ million) ConsidersBondsissuanceafter 1Q11 closing. Pro forma Net Debtdividedbyguidanceofminimum EBITDA of 2011 (R$ 1 billlion) 18

  19. ResultsSummary in RB (Quarterly)

  20. Reference Base / Guidance

  21. Organicgrowthmeasurement 2 methodologiescomparison ∆ Reference Base . ∆ SBS Net Revenues XT0 XT1

  22. Reference Base Advantages Complete Explanation 2010 FixedBaseline ComparisonofIncomeStatementmainlines (Net Revenue, Gross Profitand EBITDA) It proves thesynergiesseizingprocess FacilitatestheResultsforecasting (quarterbyquarter)

  23. How to forecastinReference Base

  24. Sensitivityanalysis Growth EBITDA Margins NEW GUIDANCE: > R$1 bi

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