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Pharma Retail Map

Pharma Retail Map

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Pharma Retail Map

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  1. Pharma Retail Map Latin America

  2. Overview in Latin America

  3. Pharmaceutical Regional Ranking(Data in millions of dollars) NOTE: The ranking includes all of the chains that operate in the region. La Fragua, Guadalajara; Fasa, Ahumada and Benavides. Source: ILACAD World Retail

  4. Modern channel v. Traditional channel Share in the Pharmaceutical Industry (%) Note: Modern Channel: Includes pharmacy chains and those located inside supermarkets Traditional Channel: Includes the traditional neighborhood pharmacies Sources: ILACAD World Retail Estimates, retailer and market data

  5. Comparison between Latin American countries – Modern Channel Pharmacies’ Total Sales – Modern Channel (in millions of U$S)Store openings – Modern Channel (2011/2012) Turnover Evolution in Local Currency Mexico U$S M 11,035 319+ 21.45% Venezuela U$S M 2,565 22+ 9.00% ColombiaU$S M 1,014100+ 0.001% Brazil U$S M 12,207608+ 22.00% PeruU$S M 1,144202+ 16.60% Chile U$S M 2,051 88- 21.40% Argentina U$S M 5,949 100+ 21.60% Source: ILACAD World Retail

  6. Main Retailers by Country Mexico Venezuela Colombia Brazil Chile Peru Argentina Source: ILACAD World Retail

  7. Concentration Level by Country in 2012. Top 3 Venezuela FarmatodoFarmahorroSaas Mexico GuadalajaraSimilaresWalmart 26.5% 43.8% Colombia La RebajaOlimpicaColsubsidio 82% Brazil Raia DrogasilPacheco – Sao PauloPague Menos 54.5% Peru Inkafarma Fasa Arcangel 73.1% Chile Cruz VerdeAhumadaSalcobrand Argentina FarmacityVantagePharmakus 96% 12.9% Source: ILACAD World Retail 2012

  8. Comparison between Latin American countries • During 2012, the Latin American pharmaceutical market continued to grow and became one of the most promising industries. The region’s modern channel widened its share in all of the Latin American countries, registering a 16.7% total growth in the region in comparison to 2011. • Keeping the trend that started a few years ago, the client that visits the pharmaceutical channel nowadays does so planning to acquire not only medicine –both over the counter and prescription drugs- but also hopes to get access to a variety of groceries and a fast restocking process. In order to satisfy the demands and respond to the new shopping trends adopted by the customers, the chains are focusing on operating under auto-service formats. • As far as sales per store, Argentina occupied the first spot in the Ranking, followed by Brazil and Venezuela. Mexico, even though it is Latin America’s second most important market regarding sales –after Brazil-, ended up in the list’s bottom three since it is the country with the largest number of stores within the region’s pharmaceutical modern channel. Source: ILACAD World Retail NOTE: Data expressed in millions

  9. Latin American Pharmaceutical Market in 2012 • Along with China, India and Russia, Latin America is one of the new “pharma-emerging” markets, which are developing and registering a higher GDP growth than the main developed countries. • Like years before, in 2012, the region registered an increase in the clients’ purchasing power and a growth in the performance of the main industries, including the pharmaceutical one. Brazil maintained the first spot in Latin America’s Ranking, reaching almost 40% of the region’s total turnover, which –in 2012- it added U$S 76 billion approximately. The second and third most important markets in the region, as far as the pharmaceutical modern channel, were Mexico and Argentina. • Out of all of the Latin American pharmaceutical markets, the two that registered the highest sale increases were Mexico –where sales grew by 30% in dollars this past year- and Peru, where pharmaceutical sales increased by 22.3%. • As far as openings, during 2012, Brazil got the first place and inaugurated around 608 new pharmacies, followed by Mexico –with 319 new stores- and Peru –with the launching of 202 new centers-, which strengthened its image as one of the most promising markets in the region. Modern Channel’s Turnover Share by Country(in millions of dollars) Source: ILACAD World Retail

  10. Latin American Pharmaceutical Market in 2012 • In 2012, there was a much stronger government presence in the Latin American prescription market, mainly in Venezuela, where the Farmapatria chain acquired 28 stores owned by the Fundafarmacia network, while the Populares pharmacies in Brazil continued to expand their presence in the country. 2012 Net Openings by Country • As far as the regional Ranking in Latin America, the first spots remained the same this past year, although three of the five main retailers –like DPSP, Fasa and Pague Menos- registered a fall in their sales in comparison to the year before. • Out of the ten main groups that make up the Latin American Pharmaceutical Ranking, 50% of them are Brazilian entities. It is important to highlight Brazil Pharma, which climbed three positions during the past year to the sixth position and leaving behind Mexican chain Similares. Source: ILACAD World Retail

  11. Overview by Country

  12. Argentina’s Pharmaceutical Channel 40,900,000 U$S 9,700 2011 2012 Variation Modern Channel million million 25.0% Annual Sales in Local Currency (AR$) 23,972.00 23.972,00 29,154.00 21.61% 21,61% Annual Sales in Dollars (U$S) 5,575.00 5.575,00 5,949.00 6.70% 6,70% Modern Channel32% 1,500 1.500 1,600 100 Stores 100 PDV Total Number of Stores Sources: ILACAD, Argentinean Pharmaceutical Chamber, IMS Health, Retailer and Market data. It represents the chains’ total turnover and only those retailers with more than eight stores were taken into account. The estimates were made based on sales per store and market share. Source: ILACAD World Retail

  13. Argentina’s Pharmacy Ranking in 2012 • Pharmaceutical Channel in Argentina • The Argentinean pharmaceutical market continued to grow during the past years, and its modern channel reached a 21.6% increase in its sales in 2012 –which reached Ar$ 29,154 million-. The retailer Farmacity celebrated its fifteenth anniversary in the country and kept its leading position in the market. Source: ILACAD World Retail

  14. According to the Argentinean Pharmacy Confederation, there are around 14,900 pharmacies in the country today, including chains, independent, and social health pharmacies. Altogether, the modern channel’s pharmaceutical retailers represent around 32% of the total turnover and 11% as far as number of stores. • As far as investments, the Industry Ministry announced, by the end of 2012, that the pharmaceutical sector ended the year with investments that reached U$S 205 million, in line with an “uninterrupted growth since 2003”. • The pharmaceutical modern channel continued to operate under two basic groups: the independent companies like Farmacity, property of the investment fund Pegasus, and retailers that operate together with laboratories, such as Vantage and Sidus. These operate both corporate stores and franchises. • The pharmaceutical market stayed mainly concentrated in Capital Federal and Buenos Aires, but it did register some growth in provinces like Santa Fe, Cordoba, San Juan and Mendoza. • Despite the good sales results and unit growth, during 2012, the Argentinean pharmacies faced an increasing inflation rate, the restriction of imports and the sale of specific products on the aisles. Source: ILACAD World Retail

  15. 1 Farmacity Farmacity is present in 11 Argentinean provinces (Cordoba, San Luis, Entre Rios, Misiones, Chaco, Formosa, Salta, Jujuy, La Rioja, Santiago del Estero and Buenos Aires), besides Capital Federal, where it operates the most number of stores. Format: Drugstore chain that offers products typically found in supermarkets as well as medications and beauty supplies. The aisles are low and –at the end of the store- clients can find a counter where prescription drugs are sold along with personalized assistance by pharmacists. Farmacity stores have large surfaces and also offer make-up, hygiene and home goods. Some are open 24 hours a day, include parking lots and even offer additional services, such as bill payment options. More Information: • In 2012, the retailer celebrated its fifteenth anniversary operating in Argentina. • The chain could not go through with a new international expansion plan in 2012 after it decided not to acquire the 78 Farmashop stores in Uruguay. • In August of 2012, Farmacity had to remove all over-the-counter medication (OTC) out of its aisles, measure imposed by the IV Chamber of the National Court for contentious Administrative Proceedings. 2012 Sales(in millions) U$S 580 Total Number of Stores 190 Share % 9.8

  16. 2 Vantage Vantage operates in six provinces, including Santa Fe, Cordoba, Mendoza, San Juan, Buenos Aires and Capital Federal. • Format: The Vantage pharmacy chain –an English group owned by Sidus- operates under the traditional European pharmacy model, which includes auto-service characteristics like a health center, modern and functional spaces, etc. It also operates a franchise system that includes reconverted stores. • Besides personalized assistance and beauty supplies, the stores offer additional services like home delivery, vaccinations, master formula preparations and bill payment options. • More Information: • After it was confirmed Carrefour would sell five stores to Vantage, the pharmaceutical retailer started operating the five stores located within the French group’s hypermarkets in Devoto, Boedo, Colegiales, Mataderos and the Paseo Alcorta shopping center. 2012 Sales(in millions) U$S 143 Total Number of Stores 135 Share % 2.4

  17. 3 Phârmakus Phârmakus is a company that gathers 28 traditional pharmacy chains in the country, with a strong presence in Capital Federal and Buenos Aires and adding a network of 76 stores. Format: The group’s history began in 2002 when some independent pharmacies and small chains joined together to compete against the market’s high concentration. The commercial union gathered brand names and recognized pharmacies. With professional customer service, the Phârmakus network also offers 24-hour service, home and international delivery options, alternative prescription plans and a wide discount system. • More Information: • Some of the chains included within the pharmaceutical network are Vassallo, Red Farma Vip, Danesa and Vilela. • During 2012, the group added new stores to its network and –with a network of 76 pharmacies- it held the third spot of Argentina’s Ranking and drove Dr. Ahorro –which had to close stores during the past couple of years- to the list’s fourth position. Phârmakus 2012 Sales(in millions) U$S 41 Total Number of Stores 76 Share % 0.7

  18. 4 Dr. Ahorro operates in 7 provinces in Argentina: Cordoba, Salta, Chubut, Catamarca, Mendoza, Buenos Aires and Capital Federal. • Dr. Ahorro –Mexican chain that was established in Argentina in 2002- operates traditional stores where a pharmacists assists the clients. It offers over 600 medicinal products with discounts of up to 75%. Moreover, it offers nearly 5,000 SKUs and focuses on proximity and lower class clients. Total Number of Stores 52 5 Zona Vital pharmacies are present in three Argentinean provinces: Buenos Aires, Capital Federal and Rio Negro. • They are wide stores that offer medications and beauty supplies. They are located in the ABC1 areas. As it started off, the company first expanded in the northern area (Buenos Aires and Capital Federal) and then, since 1999, it has expanded to the outer regions of Buenos Aires, inaugurating stores in Pilar, Lujan and in the southern region of the country (Patagonia). The group’s pharmacies offer around 25 thousand brands. Total Number of Stores 16 Sources: ILACAD and Retailer Information 6 TKL operates in Capital Federal and Buenos Aires. • They are small franchised stores located in urban areas. Total Number of Stores 12

  19. Farmacias de Cadenas (supermercados) • Walmart • Total Stores in 2012: Today, Walmart became the only supermarket chain with its own pharmacies. It operates 14 pharmacies located at stores in Capital Federal as well as other provinces, like Cordoba, Mendoza, Entre Rios, San Juan, San Luis, Tucuman and Chaco. • Format: They are located past the check-out lanes and offer a wide assortment of prescription drugs, generic and over-the-counter medications, as well as discounts provided by health insurance companies. • Carrefour • Exit from the pharmaceutical sector in 2012 • In the beginning of the 2012, the Fresh group announced it was selling its five pharmacies, located in Capital Federal (in the neighborhoods of Devoto, Boedo, Colegiales, Mataderos and the Paseo Alcorta shopping mall), to pharmaceutical group Vantage. Sources: ILACAD and Retailer Information

  20. Brazil’s Pharmaceutical Channel 194,933,000 U$S 11,700 2011 2012 Variation Modern Channel millions millions 5.84 % Annual Sales in Local Currency (R$) 20,485.00 25,000.00 22.00% 11,000.00 12,207.00 10.97% Modern Channel40% Annual Sales in Dollars (U$S) 608 Stores 3,768 4,376 Total Number of Stores Sources: Abrafarma, National Pharmaceutical Counsel, Retailer and Market data. Source: ILACAD World Retail

  21. Brazil’s Pharmacy Ranking in 2012 Source: ILACAD World Retail Pharmaceutical Channel in Brazil • After a year marked by fusions and acquisitions in 2011, during 2012, the medicinal market in Brazil grew significantly: the modern channel’s sales increased by 22% during the year and reached a U$S 25 billion turnover

  22. Along with the other emerging markets that make up the BRIC (Brazil, Russia, India and China), Brazil is today one of the most promising markets as far as future growth, occupying the seventh spot in the world’s medicine sale ranking and the first one in Latin America. • Brazil has become an attractive market for foreign investments, as it is proven by the acquisition of the ONOFRE chain by the North American pharmaceutical retailer CVS for a sum of R$ 670 million. This operation became the largest one in the sector of the past years and could drive the entrance of new players in the industry. • Another indicator of the modern channel’s consolidation in the country is the large increase of stores –which, in 2012, grew by 608 units-. It is estimated that the Rankin’s four main retailers will open around 320 new pharmacies during 2013, which will make the modern channel reach the 5,000 stores by the end of the year. • Among the market’s local players, in 2012, Sant’Ana merged with Brazil Pharma –the number one chain in the country as far as number of stores that operates Big Ben and Farmais-, adding 116 new units to its network. • In 2012, the Brazilian government informed the 18 national laboratories received over R$ 250 million in investments during this past year. Source: ILACAD World Retail

  23. 1 Raia Drogasil • Raia Drogasil is the leading pharmaceutical chain in the Brazilian market, present in eleven states with a total network of 906 stores. • Format: The stores offer a mixed assortment that includes pharmacy and convenience store products, as well as beauty supplies at its Beauty Centers. It targets the ABC segment and offers 24-hour pharmacy assistance. More Information: • Raia Drogasil kept the first spot in Brazil’s Ranking, after a successful fusion between the chains Drogasil and Droga Raia back in 2011. • In 2012, the retailer focused on opening new stores to continue consolidating its leadership. During the year, the group inaugurated 130 new pharmacies, most of which operate under the Raia banner. • Despite its strong presence in Sao Paulo, Rio de Janeiro and Minas Gerais –where it operates 28.2%, 13.2% and 10.2% of its stores, respectively-, the chain inaugurated new stores and entered the states of Mato Grosso, Mato Grosso Sul and Bahia this past year. 2012 Sales (in millions) U$S 2,758 Total Number of Stores 906 Share % 23

  24. 2 Pacheco – Sao Paulo DPSP The Pacheco and Sao Paulo drugstores are located in five states and add a total of 720 pharmacies. • Format: Pharmacies that include a convenience area, with wide surfaces and personalized assistance. 75% of their total sales come from the medicinal categories. They target clients from the ABC segment. • More Information: • During 2012, the DPSP group started operating as a whole unit after the fusion between Drogaria Sao Paulo and Drogaria Pacheco in August 2011. This operation made the new chain the second most important pharmaceutical retailer in the country. • In the year, the group inaugurated 29 new stores and announced that, in 2013, it will add new pharmacies to its network. 2012 Sales (in millions) U$S 2,265 Total Number of Stores 720 Share % 19

  25. 3 PagueMenos is present in all 26 Brazilian states, making it with only chain that operates nationwide. • Format: The chain –that has been in the market for over 30 years- focuses mainly on medications, which represent around 80% of its total turnover. It targets clients from the BC population segment and offers a 24-hour personalized assistance. • More Information: • Brazilian pharmacy chain PagueMenos continued growing in 2012, although it did so at a slower pace than expected and in comparison to 2011. • In 2012, the group was expected to launch a public share offering in order to finance its expansion plan, which includes the opening of around 300 stores by 2015. By the end of the year, the public share offer had not been launched, although the chain could do so sometime this year. Pague Menos 2012 Sales (in millions) U$S 1,519 Total Number of Stores 587 Share % 12.5

  26. 4 Brazil Pharma Brazil Pharma is the pharmaceutical chain with the highest number of stores: it operates 1,050 pharmacies in thirteen Brazilian states. • Format: The pharmacies that make up the Brazil Pharma group offer a wide assortment of medications at affordable prices, as well as a variety of make-up and beauty supplies. It was launched in 2009 and seeks to become leader in the region through the acquisition of small chains. • More Information: • In February of 2012, the group Brazil Pharma acquired the Farmacia Sant’Ana chain, adding 116 new pharmacies to its network. • The group operates 681 corporate-owned stores but also works under a franchise system, with 369 pharmacies. • Besides Sant’Ana, Brazil Pharma groups other drugstore chains: Big Ben (237 stores), Drogaria Rosario (121 stores), Mais Economica (207 stores) and Farmais (369 stores). 2012 Sales (in millions) U$S 1,491 Total Number of Stores 1,050 Share % 12.2

  27. 5 Panvel The pharmaceutical chain Panvel is the one with the most presence in southern Brazil, especially in the states of Rio Grande do Sul, Santa Catarina and Parana. • Format: Panvel was launched in 1973 after the fusion of the Panitz and Velgos pharmacies. It offers a wide variety of medications and beauty supplies in large surfaces. These pharmacies also offer its clients the possibility of shopping online. • More Information: • During 2012, Panvel invested in the opening of six new stores, as well as in the development of its online platform. • The retailer continued operating its six formats: Megastore, with two floors and a wide variety of products and services; Express, that offers a limited assortment of convenience and daily needed products; Promocional, which focuses on discounts and low prices; Beleza e Bem and Bem Estar, which are the two more traditional formats. • Panvel strengthened its private labels, adding new products to its 14 lines during the last year. 2012 Sales (in millions) U$S 684 Total Number of Stores 290 Share % 5.6

  28. Farmacias de Cadenas (supermercados) 6 • Walmart • Total Stores in 2012: Walmart operates 287 pharmacies at its Walmart, TodoDia, Maxxi, Bompreco, BIG and Nacional stores. • Formato: The pharmacies are located in the hypermarkets and wholesalers and have surfaces of around 80 square meters. They offer approximately 4,000 SKUs –including medications and beauty supplies-. It offers its clients 500 generic medications under a “popular price”, around 50 to 60% cheaper than the leading brands. 7 • Paõ de Açucar • Total Stores in 2012: Today, the group controls 152 pharmacies located at Extra andPaõ de Açucar stores. • Format: Located in teh stores’ exists and offer around 5,000 SKUs –including medications, make-up and personal care items. • D’Avo Supermercados • Total Stores in 2012: Supermercados D’Avo operates 6 stores. • Format: Surfaces of approximately 80 square meters and approximately 5,000 SKUs. 8 Sources: ILACAD and Retailer Information

  29. Chile’s Pharmaceutical Channel 17,399,000 U$S 16,000 2011 2012 Variation Modern Channel million million 1.5% Annual Sales in Local Currency (Ch$) 1,252,453.00 984,480.00 21.40 % 1,861.00 2,051.00 10.20 % Modern Channel 93% Annual Sales in Dollars (U$S) 88 Stores 1,450 1,538 Total Number of Stores Sources: ILACAD, Chile’s Pharmaceutical Association, IMS Health, Retailer and Market data. It represents the chains’ total turnover and only those retailers with more than eight stores were taken into account. The estimates were made based on sales per store and market share. Source: ILACAD World Retail

  30. Chile’s Pharmacy Ranking in 2012 • Pharmaceutical Channel in Chile • During 2012, the Chilean market stayed as the most concentrated one in Latin America, as the first three retailers – Cruz Verde, Ahumada and Salcobrand – control over 96% of the country’s modern channel and represent around 93% of the total pharmaceutical industry. Source: ILACAD World Retail

  31. Today, Chile operates a total of 2,008 pharmacies, of which 1,530 belong to chains and the remaining 470 are independent and operate within the traditional channel. This segment continues to be fairly small in relation to other countries in the region due to the market’s high concentration and the big players that compete in the industry. • The modern channel’s turnover grew by 10% in dollars, reaching sales of U$S 2,051 million, while in Chilean pesos they fell by 21% in comparison to 2011, due to the exchange variation and the appreciation of the Chilean currency. • In the beginning of 2013, and after three years of investigation, the Free Competition authorities issued the price collusion case, under which the three largest chains where involved for changing the prices of 206 products between 2007 and 2008. The leading chain, Cruz Verde, and also Salcobrand, were fined for U$S 19 million. Farmacias Ahumada, which was also found guilty, did not have to pay a fine since it reached an agreement with the authorities back in 2009. • Since March of 2013, and according to the rules established by the Secretary of Health, Jaime Mañalich, Chilean pharmacies must offer those medications with the “bio-equivalence-” certification –under more affordable prices-. Today, around 23% of these products are available at stores. • As far as the bill on the merchandising of medicine that do not require prescriptions at supermarkets and hypermarkets –strongly refused by the Pharmaceutical Associations in the country-, it was still not reviewed by Congress. Source: ILACAD World Retail

  32. 1 The Cruz Verde pharmacies operate nationwide in Chile, including the Isla de Pascua and Cerro Sombrero regions. • Format: Mainly focused on medications and targets the middle-income clients. It operates under a pharmacy an drugstore format. More Information: • During 2012, the chain had planned to inaugurate around 50 new stores but only opened six pharmacies. • This past year, the retailed focused on its online platform and launched a prescription guide on its website. Through this service, the clients can find information, like secondary effects and composition, of many pharmaceutical products in an easy and fast way. • In January of 2012, and after three years of investigation, the Free Competition Authorities (TDLC, for its name in Spanish) determined Cruz Verde (and also the Salcobrand chain) was guilty of collusion and was fined U$S 19 million. Cruz Verde 2012 Sales(in millions) U$S 841 Total Number of Stores 596 Share % 41

  33. 2 Ahumada Pharmacy chain Ahumada operates nationwide. • Format: The Ahumada pharmacy has an average surface of 160 square meters and operates under a drugstore format, offering a wide assortment of medication and related products –like health, personal care and hygiene items-. The clients will also be able to find convenience products, private and exclusive labels. • More Information: • During 2012, the retailer sold some of its operations to the Brazilian subsidiary CBS drugstores, for a sum of U$S 42 million. It also sold its Boticas Fasa chain to Peruvian group Quicorp, which owns Quimica Suiza. • Driven by these sales, and expecting an adverse ruling by the Free Competition Authorities, by the end of 2012, Fasa’s shares fell by over 16% in Santiago’s Stock Exchange Market. • Farmacias Ahumada kept the second spot in Chile’s Pharmaceutical Ranking and inaugurated four new stores in 2012. 2012 Sales(in millions) U$S 697 Total Number of Stores 360 Share % 34

  34. 3 Salcobrand, which holds the third position in Chile’s Ranking, operates the highest number of stores: 351 pharmacies nationwide. • Format: It operates under a drugstore format and its surfaces average 150 square meters. The company focuses on its cleints’ health through a wide variety of products and services, as well as healthy and organic items and beauty supplies. • More Information: • Salcobrand, like Cruz Verde, was fined U$S 19 million for being guilty of collusion in 2007 and 2008. It was also sued by the National Customer Service Association. • In 2012, the owners of the Salcobrand pharmacies –the Yarur family- and PreUnic –the Abuhabda family- signed an agreement through which both retailers merged and became part of the same entity. Together, they will operate a total of 410 stores and register sales of approximately U$S 800 million. • During 2012, the chain added 21 new stores to its network. Salcobrand 2012 Sales(in millions) U$S 430 Total Number of Stores 351 Share % 21

  35. Farmacias Dr.Simi • Total Stores in 2012: Today, Dr. Simi operates 178 pharmacies and, during the year, it opened 55 new ones. • Format: The group operates under a traditional pharmacy format –both with corporate owned stores and franchises, that focuses on low prices and generic medications. The stores' surfaces vary between 60 and 100 square meters. • More Information: • According to a survey by Hill & Knowlton Captiva, La Tercera and Collect GFK, the group had the best reputation in the country in 2012. • Farmacias Knop • Total Stores in 2012: There are 52 Knop pharmacies in Chile today. • Format: It focuses on natural, homeopathic and therapeutical medicinal products, offering over 4,000 SKUs. In 2011, the retailer assisted over three million clients. • More Information: • During 2012, the retailer inaugurated two new stores. Sources: ILACAD and Retailer Information

  36. Colombia’s Pharmaceutical Channel 45,239,079 U$S 10,200 2011 2012 Variation Modern Channel million million 2.44% Annual Sales in Local Currency (Col$) 1,803,179.00 1,803,210.00 0.001 % 931.00 1,014.00 8.92 % Modern Channel45% Annual Sales in Dollars (U$S) 100 Stores 2,700 2,800 Total Number of Stores Source: ILACAD. It represents the chains’ total turnover and only those retailers with more than eight stores were taken into account. The estimates were made based on sales per store and market share. Source: ILACAD World Retail

  37. Colombia’s Pharmacy Ranking in 2012 • Pharmaceutical Channel in Colombia • The Colombian pharmaceutical market reached an almost 9% sales increase in dollars. As far as the modern channel’s sales in local currency, they grew by 0.02% in comparison to 2011 due to a currency appreciation. Source: ILACAD World Retail

  38. According to specialized sources, there are over 20,000 pharmacies in Colombia today that operate under both the modern and traditional channels. • During 2012, even though the sales of generic medicine slowed down, they continued being the main driver of the market. The number of generic units sold in the country during the year reached 60% of the total. • Colombia was considered a very attractive market for large pharmaceutical groups, as Genfar –the second largest laboratory in the country- was sold to French group Sanofi Aventis, becoming the leader in the generic medicine segment. This operation concluded little after the Brazilian chain Blau Farmaceutica announced the acquisition of 51% of Laboratorios Sumimed, expert in antibiotics and biotechnological products. • According to data from ANDI, the Colombian market is not only attractive for the sale of medicine at a local level but also because of its export possibilities, like Ecuador –which receives 30% of its total exports-, Mexico –with 15%-, Venezuela –with 12%-, Peru –with 11%-, and Panama –which receives 10% of the total-. • As far as pharmaceutical politics, by the end of 2012, Health Minister Beatriz Londoño, presented a draft that would establish a direct intervention with the medicine market in order to better monitor the pricing from the laboratories. This measure plans to reduce the price of medication within the next two years. Source: ILACAD World Retail

  39. 1 The retailer operates nationwide, with stores in 27 departments and 169 cities. • Format: Drogas La Rebaja, which belongs to Copservir group since 1996, operates under two store formats in Colombia: Droguerias La Rebaja and La Rebaja Plus. The traditional drugstores have an average surface of between 65 and 70 square meters, while the second ones –under an auto-service concept- have an average size of 130 square meters. More Information: • During 2012, the retailer kept its leading position in the country’s Ranking, reaching a 40% market share. • In 2012, the retailer continued developing its 2.0 online platform, using social network Facebook to directly communicate with its clients and over 12,000 followers. • Last year, the retailer launched a new mobile application so clients can do their shopping through their smart phones. La Rebaja 2012 Sales(in millions) U$S 406 Total Number of Stores 496 Share % 40

  40. 2 Olímpica Drugstore chain Olimpica operates nationwide. • Format: Olimpica operates two types of formats –Drogueria and Super Drogueria-, which are located inside supermarkets and hypermarkets. More Information: • During 2012, the retailer continued operating its stores under its two formats: Super Droguerias and Droguerias. • Super Drogueria: The superdrugstores are located inside supermarkets and offer a wide assortment of medications and cosmetic products, as well as groceries, dairy and bakery. These stores have surfaces of between 250 and 750 square meters and most remain open 24 hours a day. • Drogueria: Similar to traditional pharmacies, they offer over-the-counter medications and personal hygiene items in surfaces that vary between 45 and 150 square meters. These pharmacies are located inside Superalmacenes Olimpica and Supertiendas Olimpica. 2012 Sales(in millions) U$S 253 Total Number of Stores 92 Share % 25

  41. 3 Pharmacy chain Colsubsidio –a family benefit fund- has a strong presence in the cities of Bogota and Medellin. • Format: Colsubsidio is one of the country’s most important chains and operates several types of pharmaceutical formats, which include Superfarmacias –with stores of 150 square meters on average- and Droguerias –stores with surfaces of around 120 square meters-. The chain also operates Dispensarios and offer pharmaceutical services, that supply prescription drugs to social service associations and other organizations under a wide array of agreements. • More Information: • During 2012, the retailer added seven new stores to its network, ending the year with 134 drugstores in Bogota and 12 in the city of Medellin. • Last year, Colsubsidio launched two new promotional events: Generic Tuesday, through which it offers its members a 15% discount, and Vital Thursday, when it offers special products at lower prices. Colsubsidio 2012 Sales(in millions) U$S 172 Total Number of Stores 146 Share % 17

  42. 4 The Family Benefit Fund Cafam operates nationwide, after a strategic alliance with retailer Exito. • Format: Cafam operates under drugstore formats, specializing on over-the-counter medication and prescription drugs. The store also offer personal care and hygiene items, beauty supplies, baby products, diet and organic groceries –gather a total of 13,000 SKUs-. • More Information: • In 2011, Cafam signed an agreement with Exito through which Cafam would start operating its drugstores in the chain’s hypermarkets and supermarkets. According to Luis Gonzalo Giraldo, Director at Cafam, the society has matured this past year and he expects the chain will expand its pharmacies to the Carulla format sometime in 2013. • According to Giraldo, over 1.7 million Colombians access Cafam’s services through its drugstores, primary care facilities and recreation centers. Cafam 2012 Sales(in millions) U$S 162 Total Number of Stores 143 Share % 16

  43. Super Pharma • Total Stores in 2012: The pharmacies owned by Grupo Dromayor total 120. • Format: Owned by Drogueria Dromayor, one of the country’s largest distributors since its birth back in 1948, the chain operates the pharmacy formats Superpharma and Don Saludero. These small stores offer a wide assortment of medicinal products and some convenience items. Both chains together operate over 120 stores. • Fava Droguerias • Total Stores in 2012: The Fava chain groups 70 drugstores. • Format: Owned by Droguerias Acuña, this chain has 55 years of experience in the market. Its stores offer prescription drugs as well as over-the-counter medication, as well as convenience store products and beauty supplies. Sources: ILACAD and Retailer Information

  44. Farmatodo • Total Stores in 2012: Today, Farmatodo operates 29 stores in Colombia. • Format: Auto-service pharmacy format with strong presence and participation nationwide. At the stores, the clients will find medications and a wide assortment of beauty and hygiene products. The retailer offers personalized pharmacist assistance, a 24-hour service, drive-thru lanes, home delivery and other additional services like a photo center. • Locatel • Total Stores in 2012: The Locatel chain is made up of 25 pharmacies. • Format: The Venezuelan firm Locatel operates under a specialized supermarket format, focusing on selling health & wellness products and services. Besides offering a wide assortment of medicinal products, the retailer rents medical equipment for this patients who need therapy at home. Sources: ILACAD and Retailer Information

  45. Mexico’s Pharmaceutical Channel 110,000,000 U$S 9,728 2011 2012 Variation Modern Channel million million 3.27% Annual Sales in Local Currency (Mx$) 118,014.00 143,331.00 21.45 % Annual Sales in Dollars (U$S) 8,457.00 11,035.00 30.50 % Modern Channel 75% 319 Stores 9,419 9,738 Total Number of Stores Source: ILACAD. It represents the chains’ total turnover and only those retailers with more than eight stores were taken into account. The estimates were made based on sales per store and market share. Source: ILACAD World Retail

  46. Mexico’s Pharmacy Ranking in 2012 Source: ILACAD World Retail

  47. Pharmaceutical Channel in Mexico • The Mexican pharmaceutical market maintained its position as the second most important in Latin America, after Brazil, and one of the ten most important ones in the world. • During 2012, the Mexican pharmaceutical market reached a 13% growth in sales, which totaled U$S 14,714 million. Total medicine sales grew by 5.25% in local currency –reaching Mex$ 191,108 million-. The modern channel, made up by the large chains grew by 21% in local currency and 30% in dollars last year. • In the past years, the main pharmaceutical chains strengthened their leadership in the market, gaining share against the traditional neighborhood pharmacies, which –in 2012- lost participation and could not compete against the largest chains. According to data, traditional neighborhood pharmacies could only make up just 10% of Mexico’s market by 2018. • Since 1998, when the Mexican government authorized the manufacturing and merchandise of general medicine, the popularity and participation of this type of medication has grown, especially because of its affordable prices –which can be up to 75% cheaper than leading brands-. According to specialized sources, the generic medication sales represent around 45% of the total and 70% of the total number of units sold in the market. It is also estimated that the share of this type of product continues to grow between 5% to 10% by 2016. • According to Alberto Jaimes Trujillo, President of the National Sales Executive in the Pharmaceutical Industry Association (Anevifac), said –while being interviewed in the beginning of 2013- that the expectations for the sector this year were positive and that the industry would grow approximately by 6% during 2013. Source: ILACAD World Retail

  48. 1 The retailer operates in 243 cities, in 23 states and Mexico City. • Format: The retailer operates under the SuperFarmacia format. The stores offer medication, beauty supplies and personal care items, as well as groceries –which include fruits and vegetables, breads, etc.- and home goods. More Information: • During 2012, the retailer kept its leading position in Mexico’s Pharmaceutical Ranking, as it reached a market share of almost 20%. • In the year, the chain inaugurated 104 new stores, exceeding the opening expectations set in 2011, when the group planned to reach the 1,000 pharmacies by the end of 2012. • Around 50% of the assortment offered at these pharmacies is made up of prescription drugs and over-the-counter medication, while the remaining half includes groceries and beauty supplies. Fragua kept this mixed product variety during this past year as well. La Fragua 2012 Sales(in millions) U$S 2,031 Total Number of Stores 1,052 Share % 19.7

  49. 2 Farmacias Similares The Farmacias Similares chain operates nationwide. • Format: The chain leads the generic product industry and operates under a format and focuses on proximity and low prices. It operates a wide network of franchises that sell the best-selling medicinal products up to 75% cheaper. More Information: • The retailer kept its presence in Mexico and Central America –in Guatemala and El Salvador-, as well as in Chile. • Besides pharmacies, the group –which gets its supplies from Best Laboratories- operates a pharmaceutical distribution company and a medical analysis group. • During 2012, the chain opened 120 new stores and widened its pharmacy network in Mexico. • In 2012, during the Vitamins Fare in the country, Farmacias Similares announced the launching of a day dedicated to this products, which will be offered with a 25% discount, the first Saturday of December, January and February. 2012 Sales(in millions) U$S 1,379 Total Number of Stores 4,461 Share % 12.5

  50. 3 The pharmacy chain Benavides operates a store network distributed in 17 Mexican states. • Format: Farmacia Benavides operates under a drugstore format and its stores offer over 15,000 SKUs. Besides personal care and hygiene items, clients will find photo centers and a wide assortment of non-food items. The chain –owned by Mexican group Casa Saba since it was acquired from FASA group in 2011- also offers a wide variety of private labels products under all of the major categories. • More Information: • During 2012, the retailer added 18 new stores to its network, ending the year with a total of 764 pharmacies. • Farmacias Benavides is part of a Latin American colussus that has many projections for the future and now operates over 1,000 pharmacies in Chile, Peru and Mexico. Benavides 2012 Sales(in millions) U$S 817 Total Number of Stores 764 Share % 7.4