Edgar Filing: GRUPO CASA SABA SA DE CV

















  
    
       
      Quarterly
        Earnings Report                                                                                 February
        27, 2009

        4Q08

       
             
      Sales Increased
        7.91% 
       

        Financial Highlights:

        (All December 2007 figures  are expressed in millions of Mexican pesos as of December 31, 2007 while the  figures for December 2008 are expressed in millions of current Mexican pesos.  Comparisons are made with the same period of 2007, unless otherwise stated.  Figures may vary due to rounding practices. “bp” stands for basis points)

      
        

          o Sales for the quarter totaled $7,807.03 million

          o Gross income increased 17.86%

          o Gross margin for the quarter was 12.21%

          o Quarterly operating expenses as a percentage of sales were 7.80%

          o The operating margin for the quarter was 4.41% 

          o Net profit for the quarter reached $222.79 million

          o Cash and cash equivalents at the end of the quarter was $524.21 million

          
      
      
      Mexico City,
        Mexico, February 27, 2009. Grupo Casa Saba (“Saba”, “GCS”,
        “the Company” or “the Group”),
        one of the leading Mexican distributors of pharmaceutical products, beauty
        aids, personal care and consumer goods, general merchandise, publications
        and other products announces its consolidated financial and operating
        results for the fourth quarter of 2008.
      
      

        QUARTERLY EARNINGS
      
      
         NET
          SALES 
      During the fourth  quarter, GCS’s sales were $7,807.03 million, an increase of 7.91%.
      Sales for our Private Pharma division rose 8.46%  during the fourth quarter of 2008, as a result of the consolidation of  investments made within the sector, including the most recent acquisition of      Drogasmil Medicamento e Perfumeria,   S.A.(1), a  Brazilian pharmacy chain.      
      Sales in  our Health, Beauty, Consumer Goods, General Merchandise and Other division increased  14.77% compared to the fourth quarter of 2007. This growth was due to commercial  agreements that enabled us to increase promotions and discounts which, in turn,  increased our sales.
      Sales in our  Government Pharma division rose 30.37% due to an increase in sales to Petróleos Mexicanos (PEMEX), as well as  the Instituto de Seguridad y Servicios  Sociales de los Trabajadores del Estado (“ISSSTE”), or the Mexican Social  Security and Service Institute for Government Employees.  
      Publication sales decreased 45.02%, primarily as a  result of lower unit sales.  This  decrease was due to the fact that Citem stopped distributing some publications  that did not meet our minimal profitability requirements.      
      The sales mix did not change  significantly this quarter. Private  Pharma sales represented 85.74% of total sales (compared to 85.30% during the fourth  quarter of 2007), while Government Pharma accounted for 4.08% (versus 3.37%  during the fourth quarter of 2007). Health, Beauty, Consumer Goods, General  Merchandise and Other represented 8.47% (compared to 7.97% in the fourth quarter  of 2007) and Publications made up the remaining 1.71% (versus 3.36% during the fourth  quarter of 2007).

          

      

      (1) The aquisition took place on May 15, 2008. 
      

        SALES
        BY DIVISION
      
      

        PRIVATE PHARMA 
      Sales in our Private Pharma  division rose 8.46% during the fourth quarter of 2008, as a result of the  consolidation of investments that were made within the sector. This includes  the most recent acquisition of Drogasmil  Medicamento e Perfumeria, S.A.(2), a Brazilian pharmacy chain.

   
      Sales reached $6,693.86 million  and represented 85.74% of the Group’s total sales.


      (2) The aquisition took place on May 15, 2008. 
      

      GOVERNMENT PHARMA
      Sales  in our Government Pharma division grew 30.37% due to an increase in sales to  PEMEX as well as the Instituto de Seguridad y Servicios Sociales  de los Trabajadores del Estado (“ISSSTE”). 
      Government  Pharma sales reached $318.16 million during 4Q08 and accounted for 4.08% of our  total sales.
       
      HEALTH,
      BEAUTY, CONSUMER GOODS, GENERAL MERCHANDISE AND OTHER
      Sales in our Health, Beauty,  Consumer Goods, General Merchandise and Other division reached $661.54 million,  an increase of 14.77% versus the fourth quarter of 2007. This was due to commercial  agreements that enabled us to increase promotions and discounts which, in turn,  increased our sales.
      As a percentage of total sales, this division went  from representing 7.97% in 4Q07 to 8.47% during the fourth quarter of 2008.            
       
      PUBLICATIONS
      Publication  sales decreased 45.02% during the quarter, primarily as a result of lower unit  sales.  This decrease was mainly due to  the fact that Citem stopped distributing some publications that no longer met  our minimal profitability requirements.
      
        This  division’s participation as a percentage of total sales went from 3.36% in 4Q07  to 1.71% in the fourth quarter of 2008.
        
      

                                                          Division
                                      %
        of sales 

                                              Private
        Pharma                             85.74%

                                         
        Government Pharma
                                 4.08%

                                Health,
        Beauty, Consumer Goods, 

                                 
        General Merchandise and Other              8.47%

                                                Publications
                                       1.71%

        

                                                  
      TOTAL                                    100.00%
      

        GROSS INCOME
      During the fourth  quarter of the year, Grupo Casa Saba’s gross income increased 17.86% to reach $953.38  million. The company’s gross margin improved as a result of the recent  investments, to 12.21% compared to  11.18%  during 4Q07.
      

        OPERATING EXPENSES
      Operating  expenses reached $608.78 million, an increase of 50.94% compared to the fourth  quarter of 2007.  This was due to the  investments that were made over the past months.  Operating expenses represented 7.80% of our total  sales. 
      

        OPERATING INCOME
      As a result of the increase in operating  expenses, operating income declined 15.04%, to reach $344.59 million.  The operating margin was 4.41%, 120 b.p. lower  than the 5.61% margin registered in the fourth quarter of 2007. 
      

        OPERATING INCOME PLUS DEPRECIATION AND
        AMORTIZATION 
      Operating  income plus depreciation and amortization for 4Q08 was $374.30 million, a decrease  of 12.23% compared to the fourth quarter of 2007.  Depreciation and amortization for the period was  $29.71 million, 42.50% higher than in the fourth quarter of 2007
      CASH AND CASH EQUIVALENTS
      Cash and cash  equivalents at the end of the fourth quarter of 2008 was $524.21 million.
      

        COMPREHENSIVE COST OF FINANCING
      During the fourth  quarter of 2008, GCS’s comprehensive cost of financing (CCF) was $69.35 million,  due primarily due to an increase in the amount of interest income paid.
      The interest  payments were related to the long-term credit that was obtained as a result of  our most recent acquisition in Brazil as well as the interest that was  generated from the utlitization of short-term credits for our operations in  Mexico and Brazil.
      OTHER EXPENSES (INCOME) 
      During the fourth  quarter of 2008, the Company registered an income of $31.55 million in other  expenses (income). The expenses (income) from this line item were derived from  activities that are distinct from the company’s everyday business operations.
      TAX PROVISIONS
      During the fourth  quarter, tax provisions were $84.01 million. These provisions included $77.30 million  for income tax and $6.7 million for deferred income tax. 
      

        NET INCOME
      GCS’s net  income for the fourth quarter was $222.79 million, a decrease of 39.34%  compared to the fourth quarter of 2007. This decrease was primarily due to a  higher comprehensive cost of financing (CCF). 
      The net  margin for the period was 2.85%, lower than the 5.08% net margin obtained  during the fourth quarter of 2007. 
      WORKING CAPITAL
      During the fourth  quarter of 2008, our accounts receivable days were 61.9, compared to 56.5 days  during the fourth quarter of 2007. In addition, our accounts payable days increased  by 6.9 days compared to 4Q07, to reach 66.1 days.  Finally, our inventory days were 67.4 days,  0.8 fewer days than in 4Q07.

        
      
      
      The
        265.4 million shares issued by Grupo Casa Saba are listed on the Mexican
        Stock Exchange and its ADRs on the New York Stock Exchange, both under
        the symbol “SAB”. One ADR equals 10 ordinary shares.
      

        Grupo Casa Saba is one of the leading distributors of pharmaceutical products,
        beauty, personal care and consumer goods, general merchandise, publications
        and other goods in Mexico. With 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.
      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 other countries in which
        Casa Saba operates, as well as variations in the value of the Mexican
        peso as compared with the US dollar.

      
      

        Contacts:

        GRUPO CASA SABA                                  IR
        Communications:

        Rodrigo Echagaray, IRO                               Jesús
        Martínez Rojas

        +52 (55) 5284-6672                                      +52
        (55) 5644-1247

        rechagar@casasaba.com                             jesus@irandpr.com
      Alejandro Sadurni,
        CFO

        asadurni@casasaba.com
      

      
  




 
   
   
   
   
   
 
 
  
   
   
   
   
 
 
  GRUPO CASA SABA
  S.A.B. DE C.V. AND SUBSIDIARIES
 
 
  CONSOLIDATED BALANCE
  SHEET
 
 
  December 2007 figures are
  expressed in thousands of Mexican pesos of purchasing power as of December
  31, 2007
 
 
  December 2008 figures are
  expressed in thousands of current Mexican pesos
 
 
   
   
   
   
   
 
 
   
   
   
   
   
 
 
  ITEM
   
  Dec-08
  Dec-07
  Variation
 
 
   
   
   
   
   
 
 
   
   
   
   
   
 
 
  TOTAL ASSETS
  14,680,895 
  12,039,715 
  2,641,179 
 
 
   
   
   
   
   
 
 
  CURRENT ASSETS
  11,720,500 
  10,370,073 
  1,350,426 
 
 
  CASH AND CASH EQUIVALENTS
  524,219 
  684,312 
  (160,094)
 
 
  ACCOUNTS RECEIVABLE (NET)
  5,368,221 
  4,538,524 
  829,697 
 
 
  INTERCOMPANY
  
  
  
 
 
  OTHER ACCOUNTS RECEIVABLE (NET)
  594,998 
  257,743 
  337,255 
 
 
  INVENTORIES
  5,130,789 
  4,872,712 
  258,077 
 
 
  OTHER CURRENT ASSETS
  102,273 
  16,782 
  85,491 
 
 
  LONG TERM
   
   
  
 
 
  ACCOUNTS RECEIVABLE
  
  
  
 
 
  INVESTMENTS IN EQUITY SHARES AND
  
  
  
 
 
  UNCONSOLIDATED SUBSIDIARIES
  
  
  
 
 
  OTHER INVESTMENTS
  
  
  
 
 
  NET PROPERY, PLANT AND EQUIPMENT
  1,368,439 
  1,269,821 
  98,618 
 
 
  PROPERTY
   
  1,351,902 
  1,306,662 
  45,240 
 
 
  MACHINERY AND EQUIPMENT
  495,859 
  420,762 
  75,097 
 
 
  OTHER EQUIPMENT
  648,893 
  558,055 
  90,838 
 
 
  ACCUMULATED DEPRECIATION
  1,128,215 
  1,049,503 
  78,712 
 
 
  BUILDINGS IN PROCESS
  
  33,845 
  (33,845)
 
 
  DEFERRED ASSETS (NET)
  1,307,200 
  217,214 
  1,089,986 
 
 
  OTHER ASSETS
  284,756 
  182,607 
  102,149 
 
 
   
   
   
   
   
 
 
  TOTAL LIABILITIES
  7,998,882 
  5,946,995 
  2,051,887 
 
 
   
   
  
  
   
 
 
  CURRENT LIABILITIES
  6,443,610 
  5,249,819 
  1,193,791 
 
 
  ACCOUNTS PAYABLE
  5,846,673 
  5,178,161 
  668,512 
 
 
  BANK
  DEBT
   
  267,241 
  
  267,241 
 
 
  DEBT SECURITIES
  
  
  
 
 
  ACCRUED TAXES
  3,145 
  
  3,145 
 
 
  OTHER CURRENT LIABILITIES
  326,550 
  71,658 
  254,892 
 
 
  LONG TERM LIABILITIES
  1,053,000 
  
  1,053,000 
 
 
  BANK
  DEBT
   
  1,053,000 
  
  1,053,000 
 
 
  DEBT SECURITIES
  
  
  
 
 
  OTHER DEBT
  
  
  
 
 
  DEFERRED LIABILITIES
  
  
  
 
 
  OTHER LIABILITIES
  502,272 
  697,176 
  (194,904)
 
 
   
   
   
   
   
 
 
  SHAREHOLDER'S EQUITY
  6,682,013 
  6,092,720 
  589,292 
 
 
   
   
   
   
   
 
 
  MINORITY STOCKHOLDER'S EQUITY
  4,092 
  
  4,092 
 
 
  MAJORITY STOCKHOLDER'S EQUITY
  6,682,013 
  6,092,720 
  589,292 
 
 
  PAID-IN CAPITAL
  1,993,642 
  1,993,642 
  (0)
 
 
  CAPITAL STOCK
  167,903 
  167,903 
  0 
 
 
  RESTATEMENT IN CAPITAL STOCK
  955,861 
  955,861 
  (0)
 
 
  PREMIUM ON STOCK SOLD
  869,878 
  869,878 
  (0)
 
 
  RESERVE FOR RESTATEMENT ON SHAREHOLDER'S EQUITY
  
  
  
 
 
  CAPITAL INCREASE (DECREASE)
  4,688,371 
  4,099,078 
  589,293 
 
 
  CUMMULATIVE RESULTS AND EQUITY RESERVE
  5,521,465 
  4,763,352 
  758,113 
 
 
  RESERVE FOR SHARES REPURCHASE
  1,062,201 
  1,062,201 
  0 
 
 
  OVERAGE (DEFICIT) ON RESTATEMENT ON STOCKHOLDER'S EQUITY
  (2,631,562)
  (2,631,562)
  0 
 
 
  NET INCOME
  736,266 
  905,087 
  (168,821)
 
 
   
  
   
   
   
 
 
   
   
   
   
   
 















 
  GRUPO CASA SABA, S.A.B. DE C.V.
 
 
  December 2007 figures are expressed in thousands of Mexican
  pesos of purchasing power as of December 31, 2007
 
 
  December 2008 figures are expressed in thousands of current
  Mexican pesos.
 
 
  
  
  
  
  
  
  
  
  
  
  
  
  
  
 
 
   
  Jan-Dec
   
  Jan-Dec
   
  Variation 
   
  Oct-Dec
   
  Oct-Dec
   
  Variation 
  
 
  Income Statement
  2007
  % of sales
  2008
  % of sales
  $
  %
   
  2007
  % of sales
  2008
  % of sales
  $
  %
 
 
  NET
  SALES
  25,259,662
  100.00% 
  28,382,509
  100.00% 
  3,122,848
  12.36% 
  
  7,234,906
  100.00% 
  7,807,038
  100.00% 
  572,132
  7.91% 
 
 
  COST
  OF SALES
  22,775,405
  90.17% 
  25,290,435
  89.11% 
  2,515,030
  11.04% 
  
  6,425,991
  88.82% 
  6,853,656
  87.79% 
  427,666
  6.66% 
 
 
  Gross Profit
  2,484,256
  9.83% 
  3,092,074
  10.89% 
  607,818
  24.47% 
  
  808,915
  11.18% 
  953,381
  12.21% 
  144,466
  17.86% 
 
 
  Operating
  Expenses
  
  
  
  
  
  
  
  
  
  
  
  
  
 
 
  Sales
  Expenses
  594,300
  2.35% 
  778,986
  2.74% 
  184,686
  31.08% 
  
  184,289
  2.55% 
  259,312
  3.32% 
  75,023
  40.71% 
 
 
  Administrative
  Expenses
  830,552
  3.29% 
  1,241,962
  4.38% 
  411,410
  49.53% 
  
  219,029
  3.03% 
  349,474
  4.48% 
  130,444
  59.56% 
 
 
  OPERATING EXPENSES
  1,424,852
  5.64% 
  2,020,947
  7.12% 
  596,096
  41.84% 
  
  403,319
  5.57% 
  608,786
  7.80% 
  205,467
  50.94% 
 
 
   
  
  
  
  
  
  
  
  
  
  
  
  
  
 
 
  Operating Income
  1,059,404
  4.19% 
  1,071,127
  3.77% 
  11,723
  1.11% 
  
  405,596
  5.61% 
  344,595
  4.41% 
  -61,001
  (15.04%)
 
 
  COMPREHENSIVE
  COST OF FINANCING
  
  
  
  
  
  
  
  
  
  
  
  
  
 
 
  Interest Paid
  11,156
  0.04% 
  182,079
  0.64% 
  170,923
  1532.14% 
  
  2,234
  0.03% 
  65,265
  0.84% 
  63,031
  2821.95% 
 
 
  Interest (Earned)
  -16,625
  (0.07%)
  -1,146
  (0.00%)
  15,479
  (93.11%)
  
  -2,548
  (0.04%)
  2,677
  0.03% 
  5,225
  (205.05%)
 
 
  Exchange Loss (Gain)
  1,884
  0.01% 
  3,167
  0.01% 
  1,283
  68.09% 
  
  335
  0.00% 
  1,410
  0.02% 
  1,075
  320.60% 
 
 
  Monetary Position (gain)
  21,433
  0.08% 
  0
  (0.00%)
  -21,433
  (100.00%)
  
  6,873
  0.10% 
  0
  (0.00%)
  -6,873
  (100.00%)
 
 
  Comprehensive Cost of Financing
  17,847
  0.07% 
  184,100
  0.65% 
  166,253
  931.52% 
  
  6,894
  0.10% 
  69,352
  0.89% 
  62,458
  905.98% 
 
 
   
  
  
  
  
  
  
  
  
  
  
  
  
  
 
 
  OTHER
  EXPENSES (INCOME), net
  -108,454
  (0.43%)
  -69,677
  (0.25%)
  38,777
  (35.75%)
  
  -11,410
  (0.16%)
  -31,557
  (0.40%)
  -20,148
  176.59% 
 
 
   
  
  
  
  
  
  
  
  
  
  
  
  
  
 
 
   
  
  
  
  
  
  
  
  
  
  
  
  
  
 
 
   
  
  
  
  
  
  
  
  
  
  
  
  
  
 
 
  NET INCOME BEFORE TAXES
  1,150,011
  4.55% 
  956,704
  3.37% 
  -193,307
  (16.81%)
  
  410,112
  5.67% 
  306,801
  3.93% 
  -103,311
  (25.19%)
 
 
   
  
  
  
  
  
  
  
  
  
  
  
  
  
 
 
  PROVISIONS
  FOR:
  
  
  
  
  
  
  
  
  
  
  
  
  
 
 
  Income Tax
  340,192
  1.35% 
  316,923
  1.12% 
  -23,269
  (6.84%)
  
  118,984
  1.64% 
  77,307
  0.99% 
  -41,677
  (35.03%)
 
 
  Asset Tax
  31,063
  0.12% 
  0
  0.00% 
  -31,063
  0.00% 
  
  31,063
  0.43% 
  0
  0.00% 
  -31,063
  0.00% 
 
 
  Deferred Income Tax
  -126,331
  (0.50%)
  -100,285
  (0.35%)
  26,046
  (20.62%)
  
  -107,232
  (1.48%)
  6,705
  0.09% 
  113,936
  (106.25%)
 
 
  Profit sharing due
  0
  0.00% 
  0
  0.00% 
  0
  0.00% 
  
  0
  0.00% 
  0
  0.00% 
  0
  0.00% 
 
 
  Deferred Profit sharing due
  0
  0.00% 
  0
  0.00% 
  0
  0.00% 
  
  0
  0.00% 
  0
  0.00% 
  0
  0.00% 
 
 
  Total
  taxes
  244,923
  0.97% 
  216,637
  0.76% 
  -28,286
  (11.55%)
  
  42,814
  0.59% 
  84,011
  1.08% 
  41,197
  96.22% 
 
 
   
  
  
  
  
  
  
  
  
  
  
  
  
  
 
 
  Net Income Before Extraordinary Items
  905,087
  3.58% 
  740,066
  2.61% 
  -165,021
  (18.23%)
  
  367,298
  5.08% 
  222,790
  2.85% 
  -144,508
  (39.34%)
 
 
   
  
  
  
  
  
  
  
  
  
  
  
  
  
 
 
  Extraordinary Items (Income)
  0
  0.00% 
  3,800
  0.01% 
  3,800
  0.00% 
  
  0
  0.00% 
  0
  0.00% 
  0
  0.00% 
 
 
  Net Income
  905,087
  3.58%
  736,266
  2.59%
  -168,821
  -18.65%
  
  367,298
  5.08%
  222,790
  2.85%
  -144,508
  -39.34%
 
 
   
  
  
  
  
  
  
  
  
  
  
  
  
  
 
 
   
  
  
  
  
  
  
  
  
  
  
  
  
  
 
 
  Depreciation and  Amortization
  101,120 
  0.40% 
  88,819 
  0.31% 
  (12,301)
  (12.17%)
  
  20,850 
  0.29% 
  29,712 
  0.38% 
  8,862 
  42.50% 
 
 
  Operating income plus Depreciation and Amortization
  1,160,525 
  4.59% 
  1,159,946 
  4.09% 
  (579)
  (0.05%)
  
  426,446 
  5.89% 
  374,307 
  4.79% 
  (52,139)
  (12.23%)
 
 
   
  
  
  
  
  
  
  
  
  
  
  
  
  
 
 
   Minority Interest
   
   
  4,092
  0.01%
  4,092
  0.00%
  
   
   
  4,092
  0.05%
  4,092
  0.00%