Edgar Filing: GRUPO CASA SABA SA DE CV

















  
    
       
      Quarterly
        Earnings Report                                                                                April
        30, 2009

        1Q09

         

      Sales and  Operating Income Increased 7.10% and 4.27%, Respectively
      

          Financial Highlights:

          (All  figures are expressed in millions of Mexican pesos of purchasing power as of March  2009. Comparisons are made with the same period of 2008, unless otherwise  stated. Figures may vary due to rounding practices. “bp” stands for basis  points)
      
        

              

              
          
              Sales for the quarter totaled $7,426.30 million, an  increase of 7.10% 
              Gross income rose 26.84% to reach $829.64 million
              The gross margin for the quarter was 11.17%, 174 bp  higher than in 1Q08 
              Quarterly operating expenses as a percentage of sales  were 7.52%
              Operating income grew 4.27% versus 1Q08
              The operating margin for the quarter was 3.65% 
              Operating income plus depreciation and amortization  for the period was $290.34 million, an increase of 4.86% versus 1Q08
              Net profit for the quarter was $179.94  million
              Cash and cash equivalents at the end of the quarter  was $120.76 million
            
          

          
      
      Mexico City,
        Mexico, April 30, 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 first quarter of 2009.
      
      

        QUARTERLY EARNINGS
      
      
         NET
          SALES 
      During the first  quarter of 2009, GCS’s sales were $7,426.30 million, an increase of 7.10%.
      
      

        SALES
        BY DIVISION
      
      

        PRIVATE PHARMA 
      Sales in our  Private Pharma division rose 8.51% during the first quarter of 2009, as a  result of the consolidation of investments that were made within the sector. This  includes the acquisition of Drogasmil  Medicamento e Perfumeria, S.A., a  Brazilian pharmacy chain, in May 2008.

 
      Sales for this division reached $6,640.45 million  and represented 86.99% of the Group’s total sales. 
       
      GOVERNMENT PHARMA
      Sales  in our Government Pharma division decreased 10.54% due to changes in the bidding  processes of Petróleos Mexicanos (PEMEX) and the Secretary of Health (SSA by  its Spanish acronym), which resulted in a reduction in consumption during the  period.
      As a percentage of total sales,  this division went from representing 2.70% in 1Q08 to 2.26% during the first  quarter of 2009.
       
      HEALTH,
      BEAUTY, CONSUMER GOODS, GENERAL MERCHANDISE AND OTHER
      Sales in our Health, Beauty,  Consumer Goods, General Merchandise and Other division reached $618.23 million,  an increase of 2.31% versus the first quarter of 2008. This was due to commercial  agreements that enabled us to increase promotions and discounts which, in turn,  increased our sales.
      This division represented 8.33% of GCS’s total  sales in 1T09, a decrease of 38 b.p. compared to the same period of the  previous year.  This decrease was due to  the significant increase in the participation of the Private Pharma division as  a percentage of total sales.       
       
      PUBLICATIONS
      Publication  sales decreased 4.66% 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 2.72% in 1Q08  to 2.42% in the first quarter of 2009.
       
      The sales mix  did not change significantly this  quarter. Private Pharma sales represented 86.99% of total sales (compared to 85.86%  during the first quarter of 2008), while Government Pharma accounted for 2.26%  (versus 2.70% during the first quarter of 2008). Health, Beauty, Consumer  Goods, General Merchandise and Other represented 8.33% (compared to 8.71% in  the first quarter of 2008) and Publications made up the remaining 2.42% (versus  2.72% during the first quarter of 2008).
      
      

                                                                                  Division
                                      %
        of sales 

                                              Private
        Pharma                             86.99%

                                         
        Government Pharma
                                 2.26%

                                Health,
        Beauty, Consumer Goods, 

                                 
        General Merchandise and Other                       8.33%

                                                Publications
                                       2.42%

        

                                                  
      TOTAL                                    100.00%
      

        GROSS INCOME
      During the first  quarter of the year, Grupo Casa Saba’s gross income increased 26.84% to reach $829.64  million. The company’s gross margin improved as a result of the growth in sales  derived from recent investments and a reduction in the Sales Costs as a  percentage of total sales, from 9.43% in 1Q08 to 11.17% during the current  period.
      

        OPERATING EXPENSES
      Operating expenses  reached $558.58 million, an increase of 41.72% compared to the first quarter of  2008.  This was due to the investments  that were made in the Private Pharma division.   Operating expenses represented 7.52% of our total sales. 
      

        OPERATING INCOME
      Operating income rose 4.27%, as a result  of the increase in sales which offset the increase in operating expenses.  The operating margin was 3.65%, 10 b.p. lower  than the 3.75% margin registered in the first quarter of 2008.  
       
      OPERATING INCOME PLUS DEPRECIATION AND
        AMORTIZATION 
      Operating income plus  depreciation and amortization for 1Q09 was $290.34 million, an increase of 4.86%  compared to the first quarter of 2008.   Depreciation and amortization for the period was $19.28 million, 13.98%  higher than in the first quarter of 2008.
       
      CASH AND CASH EQUIVALENTS
      Cash and cash  equivalents at the end of the first quarter of 2009 was $120.76 million.
      

          COMPREHENSIVE COST OF FINANCING
      During the  period, GCS’s comprehensive cost of financing (CCF) was $62.59 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 the  acquisition in Brazil as well as the interest that was generated from the utilization  of short-term credits for our operations in both Mexico and Brazil. 
      .
      OTHER EXPENSES (INCOME) 
      During the first quarter  of 2009, the Company registered an income of $25.09 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 first  quarter, tax provisions were $53.61 million and were entirely related to income  taxes. 
      

          NET INCOME
      GCS’s net  income for the first quarter was $179.94 million, an decrease of 6.09% compared  to the first quarter of 2008. 
      The net  margin for the period was 2.42%, slightly lower than the 2.76% net margin registered  during the first quarter of 2008.
       
      WORKING CAPITAL
      During the first  quarter of 2009, our accounts receivable days were 62.6 days, a decline of 7.6  days compared to 1T08.  In addition, our accounts  payable days decreased by 1.0 days versus 1Q08, to reach 65.2 days.  Finally, our inventory days were 52.6 days, a  decline of 3.3 days.
      

        
      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:

        Sandra Yatsko                                               Jesús
        Martínez Rojas

        +52 (55) 5284-6698                                       +52
        (55) 5644-1247

        syatsko@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
 
 
   
 
 
  Figures are
  expressed in thousands of current Mexican pesos
 
 
   
   
   
   
   
 
 
   
   
   
   
   
 
 
  ITEM
   
  March-09
  March-08
  Variation
 
 
   
   
   
   
   
 
 
   
   
   
   
   
 
 
  TOTAL ASSETS
  13,622,869 
  10,903,280 
  2,719,588 
 
 
   
   
   
   
   
 
 
  CURRENT ASSETS
  10,660,172 
  9,305,532 
  1,354,639 
 
 
  CASH AND CASH EQUIVALENTS
  120,767 
  178,037 
  (57,269)
 
 
  ACCOUNTS RECEIVABLE (NET)
  5,793,961 
  4,823,379 
  970,582 
 
 
  INTERCOMPANY
  
  
  
 
 
  OTHER ACCOUNTS RECEIVABLE (NET)
  525,339 
  525,779 
  (440) 
 
 
  INVENTORIES
  4,094,946 
  3,668,335 
  426,611 
 
 
  OTHER CURRENT ASSETS
  125,158 
  110,003 
  15,155 
 
 
  LONG TERM
   
   
  
 
 
  ACCOUNTS RECEIVABLE
  
  
  
 
 
  INVESTMENTS IN EQUITY SHARES AND
  
  
  
 
 
  UNCONSOLIDATED SUBSIDIARIES
  
  
  
 
 
  OTHER INVESTMENTS
  
  
  
 
 
  NET PROPERY, PLANT AND EQUIPMENT
  1,367,311 
  1,210,963 
  156,348 
 
 
  PROPERTY
   
  1,354,415 
  1,313,863 
  40,551 
 
 
  MACHINERY AND EQUIPMENT
  505,990 
  461,154 
  44,836 
 
 
  OTHER EQUIPMENT
  650,409 
  564,827 
  85,581 
 
 
  ACCUMULATED DEPRECIATION
  1,143,502 
  1,128,881 
  14,621 
 
 
  BUILDINGS IN PROCESS
  
  
  
 
 
  DEFERRED ASSETS (NET)
  1,305,125 
  218,231 
  1,086,895 
 
 
  OTHER ASSETS
  290,261 
  168,554 
  121,707 
 
 
   
   
   
   
   
 
 
  TOTAL LIABILITIES
  7,068,168 
  4,483,885 
  2,584,283 
 
 
   
   
  
  
   
 
 
  CURRENT LIABILITIES
  5,462,326 
  3,857,722 
  1,604,603 
 
 
  ACCOUNTS PAYABLE
  4,090,648 
  3,678,085 
  412,563 
 
 
  BANK
  DEBT
   
  845,451 
  
  845,451 
 
 
  DEBT SECURITIES
  
  
  
 
 
  ACCRUED TAXES
  
  
  
 
 
  OTHER CURRENT LIABILITIES
  526,227 
  179,638 
  346,589 
 
 
  LONG TERM LIABILITIES
  1,118,000 
  
  1,118,000 
 
 
  BANK
  DEBT
   
  1,118,000 
  
  1,118,000 
 
 
  DEBT SECURITIES
  
  
  
 
 
  OTHER DEBT
  
  
  
 
 
  DEFERRED LIABILITIES
  
  
  
 
 
  OTHER LIABILITIES
  487,842 
  626,162 
  (138,320)
 
 
   
   
   
   
   
 
 
  SHAREHOLDER'S EQUITY
  6,554,701 
  6,419,396 
  135,305 
 
 
   
   
   
   
   
 
 
  MINORITY STOCKHOLDER'S EQUITY
  
  
  
 
 
  MAJORITY STOCKHOLDER'S EQUITY
  6,554,701 
  6,419,396 
  135,305 
 
 
  PAID-IN CAPITAL
  1,992,326 
  1,992,325 
  (0)
 
 
  CAPITAL STOCK
  167,903 
  167,903 
  0 
 
 
  RESTATEMENT IN CAPITAL STOCK
  955,862 
  955,862 
  (0)
 
 
  PREMIUM ON STOCK SOLD
  868,561 
  868,561 
  (0)
 
 
  RESERVE FOR RESTATEMENT ON SHAREHOLDER'S EQUITY
  
  
  
 
 
  CAPITAL INCREASE (DECREASE)
  4,562,375 
  4,427,070 
  135,305 
 
 
  CUMMULATIVE RESULTS AND EQUITY RESERVE
  6,057,256 
  5,546,997 
  510,259 
 
 
  RESERVE FOR SHARES REPURCHASE
  1,063,517 
  1,063,517 
  0 
 
 
  OVERAGE (DEFICIT) ON RESTATEMENT ON STOCKHOLDER'S EQUITY
  (2,738,339)
  (2,375,060)
  (363,279) 
 
 
  NET INCOME
  179,941 
  191,617 
  (11,676)
 
 
   
   
   
   
   
 
 
   
   
   
   
   
 















 
  GRUPO CASA SABA, S.A.B. DE C.V.
  
 
   
   
   
   
   
   
   
  
 
  Figures are expressed in thousands of current
  Mexican pesos.
  
 
  
  
  
  
  
  
  
  
 
   
  Jan-Mar
   
  Jan-Mar
   
  Variation 
  
 
  Income Statement
  2008
  % of sales
  2009
  % of sales
  $
  %
  
 
  NET
  SALES
  6,934,031
  100.00% 
  7,426,300
  100.00% 
  492,269
  7.10% 
  
 
  COST
  OF SALES
  6,279,940
  90.57% 
  6,596,656
  88.83% 
  316,716
  5.04% 
  
 
  Gross Profit
  654,091
  9.43% 
  829,644
  11.17% 
  175,553
  26.84% 
  
 
  Operating
  Expenses
  
  
  
  
  
  
  
 
  Sales
  Expenses
  153,306
  2.21% 
  220,166
  2.96% 
  66,860
  43.61% 
  
 
  Administrative
  Expenses
  240,831
  3.47% 
  338,423
  4.56% 
  97,592
  40.52% 
  
 
  OPERATING EXPENSES
  394,137
  5.68% 
  558,589
  7.52% 
  164,452
  41.72% 
  
 
   
  
  
  
  
  
  
  
 
  Operating Income
  259,955
  3.75% 
  271,055
  3.65% 
  11,101
  4.27% 
  
 
  COMPREHENSIVE
  COST OF FINANCING
  
  
  
  
  
  
  
 
  Interest Paid
  6,507
  0.09% 
  61,622
  0.83% 
  55,115
  847.00% 
  
 
  Interest (Earned)
  -535
  (0.01%)
  -1,234
  (0.02%)
  -699
  130.68%
  
 
  Exchange Loss (Gain)
  -178
  0.00% 
  2,205
  0.03% 
  2,382
  (1340.93%) 
  
 
  Monetary Position (gain)
  0
  0.00% 
  0
  (0.00%)
  0
  0.00%
  
 
  Comprehensive Cost of Financing
  5,795
  0.08% 
  62,593
  0.84% 
  56,798
  980.19% 
  
 
   
  
  
  
  
  
  
  
 
  OTHER
  EXPENSES (INCOME), net
  -2,494
  (0.04%)
  -25,093
  (0.34%)
  22,600
  906.25%
  
 
   
  
  
  
  
  
  
  
 
   
  
  
  
  
  
  
  
 
   
  
  
  
  
  
  
  
 
  NET INCOME BEFORE TAXES
  256,654
  3.70% 
  233,556
  3.14% 
  -23,098
  (9.00%)
  
 
   
  
  
  
  
  
  
  
 
  PROVISIONS
  FOR:
  
  
  
  
  
  
  
 
  Income Tax
  100,700
  1.45% 
  53,614
  0.72% 
  -47,086
  (46.76%)
  
 
  Asset Tax
  0
  0.00% 
  0
  0.00% 
  0
  0.00% 
  
 
  Deferred Income Tax
  -35,663
  (0.51%)
  0
  (0.00%)
  35,663
  (100.00%)
  
 
  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
  65,037
  0.94% 
  53,614
  0.72% 
  -11,422
  (17.56%)
  
 
   
  
  
  
  
  
  
  
 
  Net Income Before Extraordinary Items
  191,617
  2.76% 
  179,941
  2.42% 
  -11,676
  (6.09%)
  
 
   
  
  
  
  
  
  
  
 
  Extraordinary Items (Income)
  0
  0.00% 
  0
  0.00% 
  0
  0.00% 
  
 
  Net Income
  191,617
  2.76%
  179,941
  2.42%
  -11,676
  (6.09%)
  
 
   
  
  
  
  
  
  
  
 
   
  
  
  
  
  
  
  
 
  Depreciation and  Amortization
  16,919 
  0.24% 
  19,284 
  0.26% 
  2,366
  13.98%
  
 
  Operating income plus Depreciation and Amortization
  276,873 
  3.99% 
  290,340 
  3.91% 
  13,466
  4.86%
  
 
   
  
  
  
  
  
  
  
 
   Minority Interest
   
   
  1,439
  0.02%
  1,439
  0.00%