Institutional Presentation

February/2018
Disclaimer

This release contains forward-looking statements that are exclusively related to the prospects of the business, its operating
and financial results, and prospects for growth. These data are merely projections and, as such, based exclusively on our
management's expectations for the future of the business and its continued access to capital to fund its business plan.
These forward-looking statements substantially depend on changing market conditions, government regulations,
competitive pressures, the performance of the Brazilian economy and the industry, among other factors, as well as the
risks shown in our filed disclosure documents, and are therefore subject to change without prior notice.

As a goal to maintain a correlation with the Financial Statements prepared by its external auditors, the considerations and
comments contained herein are prepared on a consolidated viewpoint of the economic group Hypera, and not necessarily
individualized by the various legal entities that compose the group.

In addition, unaudited information herein reflects management's interpretation of information taken from its financial
statements and their respective adjustments, which were prepared in accordance with market practices and for the sole
purpose of a more detailed and specific analysis of our results. Therefore, these additional points and data must also be
analyzed and interpreted independently by shareholders and market agents, who should carry out their own analysis and
draw their own conclusions from the results reported herein. No data or interpretative analysis provided by our
management should be treated as a guarantee of future performance or results and are merely illustrative of our directors'
vision of our results.

Our management is not responsible for compliance or accuracy of the management financial data discussed in this report.
which must be considered as for informational purposes only, and should not override the analysis of our audited
consolidated financial statements for purposes of a decision to invest in our stock, or for any other purpose.

2
 Agenda

Business Overview
Market Characteristics

Our Business and Strategy

Financials

3
Business overview

Consumer Branded Branded

2017 Revenue Breakdown Health Prescription² Generics³

#1 Hypera Aché NC Farma

#2 Sanofi Eurofarma Hypera

Ranking
Branded Consumer #3 GSK Sanofi Cimed
Prescription Health
41% #4 Takeda Novartis Sanofi
30%
#5 Pfizer Hypera Eurofarma

Branded
Generics Focus in Brazil Long experience
29% Key Facts

Net Rev: R$3.6 bn Fast growing/ Diversified

Gross Margin: 74.5% resilient market portfolio

4 SOURCE: Company financials; IMS Health Dec 17; Hypera.

² Ex-patents. ³ Branded Generics includes Generics and Branded Generics.
 Agenda

Business Overview

Brazilian Pharma Market

Our Business and Strategy

Financials

5
 Pharma market

2014 Trends 2019

1st United States • Aging 1st United States
• Underdeveloped health
2nd China 2nd China
system
3rd Japan • Treatments’ low levels 3rd Japan

4th Germany • Generics low 4th Germany

penetration of generics
5th France (25% of market) 5th USD36 bn
• Peak in economically
6th USD24 bn 6th France
active population
7th Italy 7th Italy

6
SOURCE: IMS Health (May 2016)
 Main markets growth

Forecasted 2016-21 CAGR

India 12%
Brazil 9%
EM 8%
USA 8%
Russia 7%
China 7%
Global 6%
UK 6%
RoW 5%
Germany 4%
Spain 3%
Italy 3%
Japan 1%
France 1%
7
SOURCE: IMS Health (Average Expected Growth)
 Local players gain market share
Value Volume
(R$) (Units)
Multinationals

35% 33% 30%

40% 39% 36%
46% 44% 42% 42%
50% 48%

65% 67% 70%

60% 61% 64%
54% 56% 58% 58%
50% 52%

2012 2013 2014 2015 2016 2017 2012 2013 2014 2015 2016 2017
8
SOURCE: IMS Health 2016
 Low levels of per capita consumption

Healthcare Expenditure per Country

(USD/year)

USA 8,745

Germany 4,811

France 4,288

Japan 3,649 7.9x

UK 3,289

Chile 1,577

Brazil 1,109

OECD 3,484

9
SOURCE: Organization for Economic Co-operation and Development (OECD), 2012
 The largest market in Latin America

Latin American Market

Mexico Argentina
9.7 bn
Locals are dominant and
3.8 bn focused in their markets
21% 8%
Brazil
24.3 bn
53%
Colombia
3.8 bn Absence of strong regional
8%
leaders
Chile
2.2 bn
5%
Others
2.3 bn
10
5%
SOURCE: Latin American Markets IMS Health (2014)
 Fast ageing of population

Population 60+
(MM people)
90 35%

34%
80

29%
30%

74
70

24% 66
25%

CAGR
2.8%
60

20%

50

19% 54
40

42
15%

14%
30
1mm
10% 29 p.y.
10%

20
8%
20 5%

10

14
0 0%

2000 2010 2020 2030 2040 2050 2060

11
SOURCE: IBGE (2010)
 Potential for higher drug consumption

Prescription Drugs Expenditure

(R$ per month / family)

10-19 45.4

20-29 58.6

30-39 71.4
4.4x
40-49 97.4

50-59 130.9

60-69 193.6

70+ 200.4

12
SOURCE: IBGE (Consumer Expenditure Survey 2008-09); Values readjusted by inflation (IPCA) to February 2018.
 Retail pharma market

Business Product Demand Market

Segment Category Driver Size

6.0% Patents • Innovative patent protected Physicians R$3.4B

16.0% Direct • Over-the-counter

to Consumer Consumer R$9.1B
• Nutritionals
• Related products
23.0% Trade

• Generics (API)
Pharmacist R$13.0B
• Similars

• RX with/without
Branded
prescription retention
55.0% Prescription Physicians R$31.3B
• OTX
• Dermocosmetics

13
SOURCE: IMS Health PPP Dec 2017 ,Market Size PPP LTM
 High entry barriers
• Strict Regulator Fragmented Distribution Powerful Local Brands

• Continental country
(27 states; >200mm people)
• ~70k point of sales
• 28 larger chains 1960 2016
• ~230 distributors
• All generics are branded at
retail as in most of the World
(ex-US & Canada)

• Long approval
process (3-5 years)
• Strict control of
manufacturers,
products and
retailers
14
 Retail pharma market
Pharma Retail
(% Sales) # Companies to reach 42% of market share

Larger Retailers (28) Manufacturer (6)

Smaller Retail
Chain & Larger
Independent Retail Chain

59% 41%
68.3 K POS 6.5 K POS

75 K Point of Sales *

(POS)
15 SOURCE: IMS Health World Review Conference 2017 (May 5, 2017; Dinâmicas e Perspectivas do Mercado Farmacêutico da
América Latina e do Brasil); IMS PMB-PPP February 2017; Hypera. Larger retail chains are the Abrafarma members.
 Resilient growth

CAGR 2011-16: 11.3% CAGR 2011-16: 12.3%

53.5 4.0
3.7
47.7 3.3
42.1 2.8
37.1 2.5
34.0 2.3
30.9 2.0
28.1

2011 2012 2013 2014 2015 2016 2017 2011 2012 2013 2014 2015 2016 2017
16
SOURCE: IMS Health – PMB-PPP (December 2017)
 Agenda

Business Overview

Market Characteristics

Our Business and Strategy

Financials

17
Business overview

Revenue Breakdown Market Growth

Rank Share Opportunities

• Leverage on physicians
Branded visit network
Prescription* #5 4.6%
• Launch new products
Branded Consumer with untapped demand
Prescription Health
30% • Launch new product
41%
Consumer concepts through brand
Health #1 11.1% extensions
• Improve retail space
Branded
Generics • Increase market
29% presence, especially at
retails chains
Branded 12.3%
Generics
#2 • Improve portfolio
coverage especially at
high value products

18 * Excluding patents
SOURCE: IMS Health – PMB Dec 17; Hypera – 2017
Hypera strategic development

2007 - 2010 2012 - 2015 2017 - 2020

Industry Business Pharma Shareholder

Consolidation Restructuring Focus Value

Cycle 3

Cycle 2

Cycle 1

19
Key objectives of strategic phases

Industry Business Pharma

Consolidation Restructuring Focus

2007 - 2011 2012 - 2016 2016 - 2020

• Acquisition of outstanding assets (brands/companies) at attractive valuations

1970s 1953 1959 1943 1970

20
Key objectives of strategic phases

Industry Business Pharma

Consolidation Restructuring Focus

2007 - 2011 2012 - 2016 2016 - 2020

• Developed “outstanding” Go-to-Market platform

• Operations
• Marketing
• Distribution
• Implemented successful product / market strategies
with continuous market share gains
• Successfully executed business portfolio “Churn”

21
Successfully executed business portfolio “churn”

Sale of
Cosmetics,
Condoms &
• Materially
Sale of
Home Care 41% Diapers improved
HPC 55% & Food capital
structure
100%
• Concentrated
on the most
59% attractive
Pharma 45%
Pharma
business

2010 2013 2016

22
SOURCE: Hypera (Net Revenue breakdown)
Developed the best Go-to-Market platform

• Largest and most productive

Brazilian manufacturing site
• Highest production volume
Operations • Lowest cost producer

Most Productive
Lowest Cost • Most horizontal
Best Distribution
distribution
- Mom&Pops
- Regional
Marketing Distribution
- Chains
• Most productive • Largest field
sales force at physicians force at store level
• Lowest cost media buying (>70% direct access)

23
Brazilian peers

COGS per Unit (R$)

Hy permar cas

1.9

Player 1 EMS

2.9 1.5x

Player 2 Medley

3.0 1.6x

Player 3 Teuto

3.1 1.6x

Player 4 Aché

4.1 2.1x

24
SOURCE: Companies’ Financials 2016; IMS Health PMB – Units
Brazilian peers

Productivity
R$ MM/Rep per Year

1.9

Player 1 1.2

Player 2 0.9

Player 3 0.8

25
SOURCE: IMS Health – PMB-PPP Oct 16
 Brazilian peers

EBIT Margin

Hy permar cas

32.5%

Aché

28.7%

EMS

15.8%

Eurofarma

14.1%

União Química

12.5%

26
SOURCE: Companies' Financials 2016.
Key objectives of strategic phases

Industry Business Pharma

Consolidation Restructuring Focus

2007 - 2011 2012 - 2016 2016 - 2020

• Focus on most attractive Pharma sector, leveraging on superior

competitive advantage

• Accelerate organic growth through more assertive “business

innovation”

• Further improve sales & marketing execution capabilities

27
 Concentrated on most attractive Pharma business

High
Pharma
Business
Attractiveness Accelerate growth

• Aging of population • Leverage on

• Resiliency “outstanding” platform
Low

• Untapped demand • Explore underpenetrated

markets
• Widen product offering

Low High

Competitive Position
• #1 with leadership in many markets
• Diversified portfolio
28 • Most productive Go-to-Market platform
Diversified revenue base

(Branded Presc.)

8,3%
(Consumer Health)

6,0%
Other
products 4,1%
(Branded Generic)
Top 10
59,5%
4,0% (Consumer Brands:
Health)

3,7%
~40% sales
(Branded Presc.)
3,2% (Branded Presc.)
3,2%
2,8% (Branded Presc.)
2,7%
2,5% (Consumer Health)

(Branded Presc.)
(Consumer Health)
29
SOURCE: Company data, 2017
Diversified distribution
Fragmented distribution
Hypera reaches 100% of POS in Brazil
• Continental country
(27 states; 204mm people) Direct Indirect
Channel Transfer Channel
• 28 larger chains
Order
• ~230 distributors

invoices & delivers

takes orders

Distributor
Hypera
Retailer
Warehouse
30% Distributor

36% 34%
30 75,300 Stores
SOURCE: Company Data, 2016 (Dec 17)
 Large scale production facility
Aerosol
Efervecent
Solids/ Quality Liquids
Distribution Dermo
Raw Control Semisolids
Center
Materials Injectables
R&D

Solids Penicilin
Semisolids
Liquids

R&D

323,000 m2 land 120,000 m2 constructed area 3,700 employees

31
High production capacity

Tablets,
capsules,
Injectable and
coated tablets,
ophthalmic
pills and
effervescent 45 million
10 billion

Liquids,
creams, oils,
Aerosols ointments,
lotions and
11 million jellies

276 million

32
SOURCE: Hypera, per year
 Segment the business in “Strategic Business Units” (SBUs)

Segment Name Success Factor Hyper Position Market Size

• Brand portfolio
“Direct to • Merchandising #1
R$9.1 B
Consumer” capabilities 11.1% share
Consumer Health • Media Buying

• Product
innovation
“Medical #5
• Sales Force R$31.3 B
Community” 4.6% share
Branded Prescription Productivity

• Commercial
policy flexibility #2
“Trade” • “Fast copier” R$13.0 B
12.3% share
Branded Generics • Distribution
network
33
SOURCE: IMS PMB Dec 17
New organizational structure

Consumer Branded Branded • Vertical integration of sales

Health Prescription Generics More focused field teams
• Define innovation needs
based on market insights
and business strategy

Innovation Capabilities
• Offer opportunities based
on deep knowledge of
Innovation Center global technology
(Hynova) Business Development
• Efficient innovation process
and execution
34
 Launch extensions of leading brands

Sell-out (R$ million)

CAGR
236 10.1% 128
CAGR
28.2% 82 111 21
74 CAGR 44
97
96
16.3% 27 19
63 17 17
40 183
37 172
22
8 23
39
150 192
84 88
79 80
42 150 164 159
39 41 37

2014 2015 2016 2017 2014 2015 2016 2017 2014 2015 2016 2017
Doril Doril Enxaqueca Benegrip Benegrip Multi Liquid Pills Gel Caps

35
SOURCE: IMS Health – PMB Dec 17
 Expand to existing markets in Brazil

Covered Market
Coverage1 Share Ranking
Total Share Share covered

Consumer
40%
Health² 18% 27% #1

Branded
Prescription²
22% 5% 21% #1

Branded
Generics³
48% 13% 27% #1

Total 37% 10% 26% #1

NOTES: (1) Disregarding markets with less than 3% of share; (

36 2) IMS Health PPP
(3) Average presentation price basis
 Improve POS distribution/execution
Example: OTC Category Management

37

SOURCE: Dunhhumby Anti-flu + Decongestant - YTD Sept 16vs17 Value

 Significant R&D activity in the world

Nanotechnology Transdermal ODT Oral Films

Patches

Fixed-dose combinations Inhalers Sublingual

Extended release Quick Release Others

38
 Sell Out results 2017
Δ% 2017 vs 2016 Hypera Market “Spread”

Total 14.7% 11.3% 3.4%

Branded 19.2% 11.7% 7.5%

Prescription

Consumer 15.4% 9.5% 5.9%

Health

Branded 10.5% 11.3% -0.8%

Generics

39 Source: internal data/ IMS dec/17

 R&D – Current structure

Center for
R&D - Anápolis R&D - Hynova Pilot plant Consumer Studies

• Maintenance of • Launched in 2017 • In process of • Evaluation of the

existing structure expansion
• 190 chemists and performance of products
• Focus on improving pharmacists, 26 • Lots in semi-
and adapting the Ph.D. professionals industrial size and packaging based on
portfolio
• Laboratories for consumer acceptance
• Pharmaceuticals Medicines, Dermo
and Nutraceuticals and preference.

• State-of-the-art
equipment

Capacity
40 4 x higher
 R&D Pharmaceuticals

Hynova - Barueri

41
 R&D Dermo & Nutraceuticals
Types of products and technologies
Gels, Lotions and Séruns Sprays and Aerosols

Profile Projector - 3D Printer

Powder and
compact powder

Capsules Packaging with

exclusive design

FPS in vitro Reactors

Labspheres
42
 R&D Pharmaceuticals – development process

Concept Product
Lab Validation Pilot Tests Dossier
Validation Design

18 to 30 months(1)

43

NOTE: (1) Excluding the period of prospecting and acquisition of materials and regulatory deadline
 Business development pipeline

Short-term Mid- and Long-Term

Co
2nd Brand License-in
Acquisition development

7 22 34 10

44 # projects
 Current pipeline status
R&D Business Development
Projects Potential Revenue Projects Potential Revenue
Quantity R$ mm Quantity R$ mm

Release 52 316 Release 15 126

ANVISA ANVISA
Queue 31 301 Queue 10 235

Develop-
91 1,112 Contract 11 266
ment

Waiting
48 970 Negotiation 20 297
List

222 2,700 56 923

45

NOTE: (1) Potential revenue adjusted for risk and project phase
 Relevance of strategic partnerships

Case study: OFOLATO (Methylfolate) - RX product

• Active form of Folic Acid (7x more bioavailable)

Apr/17 May17 – Jul/16 – Oct/17

Jan/17 Mar/17
Jun/17 Sep/16

Business Found a Negotiation Diligence / Manufacture Ready to

case partner Contract Market

• Partnership with Local development company

• 1st product promoted to the doctors
• 2nd generation being developed in house
 Partnership pipeline by therapeutic area

# Projects

Gastro 14

CSN 13

OTC 11

Pain/Analgesics 11

Cardiology 8

Respiratory 6

Women's health 3

Dermatology 2

Anti-infectives 2

VMS 2

Ophthalmology 1

47
Increasing importance of innovation

Innovation Index (% Net Revenue) Target: 35%

28.0%

24.3%
23.0%

18.8%
17.2%
16.0%

2012 2013 2014 2015 2016 2017

48
SOURCE: Hypera Sell-in (% Net Revenues; products launched over the past 5 years) Dec 17
Innovation process
Approvers/Committee Process Leader
Idea Generation

Creation Order Executive Directors

Innovation
Manager
Business Case Construction

Development Order (D.O.) Innovation Committee Innovation

Management
Priorization of Orders (D.O. / N.O.) Business Committee
D.O.: R&D
Development and/or
Follow-up Committee Negociation Order
Negotiation
(N.O): Business
Development
Launch Order CEO

Launch
Preparation Product Manager
and
Project Manager
Sell – in

49 Product Strategy Review Executive Committee

 Sustained commitment to R&D

CAGR
51.1% 2.3%

2.0% 84.4

65.4
1.4%

41.0

2015 2016 2017

R&D R&D (% of Net Revenues)
51
SOURCE: Hypera
 Availability of new active substances by country

170 new
128
substances
(2010-14)
108
102
88 R&D
83 79
73
67
61 60 58
41

Business development - sourcing

USA Germany Great Britain Italy Japan Spain Canada France South Korea Mexico Polonia Brazil

Availability in December/2015
52 NOTE: New molecules launched between 2010 and 2014. Availability of molecules in 2015.
SOURCE: IMS Institute for Healthcare Informatics, Dec 2015
 Availability of new active substances by country

• Fixed dose
combinations
439 73% • Extended release
• Inhalation devices
• Transdermal patches
High potential • Nano-tech
for partnering 1,651
in innovative • Quick release
products 1,212 • Sub-lingual
• ODT
• Oral films
• Others
Late stage Yes No
development or
recently launched Presence in Brazil
products

53
SOURCE: Thomson Reuters (Cortellis) and Hypera
 Growth source of Brazilian companies

3.0
-0.3
• Negative
14.6 performance of
11.9
legacy portfolio

• Growth comes
1 2 3
from new products
2012 Legacy New products 2015

CAGR -0.8% 7.9%

54 NOTE: ¹ Adjusted by inflation. ² Considers products launched before 2008. ³ Considers products launched between 2008-2015
SOURCE: IMS Health - PMB Retail
 Branded Prescription

• Drugs promoted to
Revenue Breakdown Products Physicians (OTC / RX)

Branded Consumer
• Intensify therapeutic
Strategy classes expansion
Prescription Health
41% 30%

Demand Driver • Physician prescription

Branded
Generics
29%

55
 Branded Prescription
Ranking

Ranking Company Market Share Growth YoY

#1 10.0% 16.4%

#2 6.9% 15.3%

#3 6.2% 10.9%

#4 5.0% 8.0%

#5 4.6% 14.5%

Total Market 11.3%

56
SOURCE: IMS Health – PMB-PPP Dec 17
 Branded Prescription
Productivity of medical reps team

Team size Productivity

# representatives R$ MM/Rep per Year

Player 1 Aché

2,300 1.2

Player 2 Eurofarma

1,900 0.9

Player 3 NC - Farma

1,300 0.8

750 1.9

57
SOURCE: IMS Health – PMB-PPP Oct 16
 Branded Prescription
Portfolio composition
Market Growth Growth
Relevance YoY Relevance YoY Therapeutic class examples

R$11.7bn +11% R$1.5bn +14%

Acute

• Antibiotics
+12%
Acute • Analgesics
42% Acute +12%
48% • Anti-inflammatory
Chronic

• Antihypertensive

+12% • Antidepressants
Chronic Chronic
41% +18%
33% Skincare

• Photoprotection

Skincare • Moisturizing
Skincare
+8% 20% +15%
17% • Anti-aging
MARKET HYPERA

58
SOURCE: IMS Health – PMB Dec 17
 Branded Prescription
Portfolio optimization by therapeutic classes

Main Current Future pipeline

Market share Visitation coverage
visited specialties (% R$ PF) (% of prescriptions – R$ PF) portfolio opportunities

General Practice 5% 69%

Gynecology 3% 55%

Cardiology 1% 78%

Peadiatrics 12% 74%

Dermatology 10% 85%

Psychiatry 1% 74%

Orthopaedics 11% 87%

Ophthalmics 1% 93%

59
SOURCE: IMS Health (Oct/2016); Hypera
 Success case: Addera

Developing new treatments Sell-out (MM R$)

New pharmaceutical forms/packaging:

– Family 10,000 UI CAGR
284
– Economic presentations 7,000UI 58.0%
10 Pills – 10 weeks treatment 80
224
30 Pills – 30 weeks treatment
26
• Strong efforts with Physician and Pharmacy

• Exclusive gel caps

151

169 175
72 122
36
36 29 29 30
2014 2015 2016 2017
Drops Pills Gel Caps

60
SOURCE: IMS Health – PMB Dec 17
 Success case: Alivium

Alivium demand evolution – Sell-out (MM R$)

Doctors
Growth
Recovery Media and
YoY Media
Plan Gel Caps
26% 25%
22%
16% 17% • Increased investment in POS
13%
POS
5% 33.7 33.2 34.2 • Dedicated Sell-out team – 2H17
-2% 0%
5.0 8.0
27.9 27.0 8.1
26.8 26.6
• Radio and TV Advertisements
23.9 23.8 6.1
5.4
5.1 6.1 3.2
6.5 4.0 Media
4.2 4.3

21.7 21.8 23.2 23.0

19.8 19.6 20.1 20.9 21.1

4Q15 1Q16 2Q16 3Q16 4Q16 1Q17 2Q17 3Q17 4Q17

Liquid Pills Gel Caps

61
SOURCE : IMS Health – PMB Dec 17
 Branded Prescription
2017 launches

Lisador Dip Ommax Colflex Vit

New Concept:
Omega 3 in
pediatrics
Pain & Fever 2nd half 2017 Starting in Nutracosmetics
2nd half 2017 Market
2nd half 2017

Velunid Glycare Urby

$ MM 300 Market Anti-aging Anti-aging Mask

– Cardio Portfolio Glycolic Acid in 2nd half 2017
2nd half 2017 Nanoparticles
2nd half 2017

62
 Consumer Health

Revenue Breakdown • OTC

Products • Sweeteners

Branded Consumer Strategy • Intensify brand extensions

Prescription Health
39% 30%

Demand Driver • Mass media

Branded
Generics
31%

63
 Consumer Health
Ranking

Sell-out
Growth
Ranking Company Market Share
YoY

#1 11.1% 10.1%

#2 10.9% 1.7%

#3 6.6% 8.0%

#4 4.8% 12.4%

#5 3.9% -0.1%

Total CH 9.5%

64
SOURCE: IMS Health – PMB-PPP Dec 17
 Consumer Health
Business scope

Universe Characteristics
• Safe and well tolerated
• Simple dosages
Pharmaceuticals
• Fast relief of minor symptoms
Nutra- Dermo-
ceuticals cosmetics • Ease of access
• Good distribution
Nutri-
tionals
• Wide range of options
Food Cosmetics
• Affordable prices

Self Care

Education & Knowledge

Communication POS
65
 Consumer Health
Distribution

Convert Market Share in POS space via block Verticalization of the Sales & Merchandising
exposure of brands Teams

Specialist Team CH

Focus on execution

Resources Optimization

Grow Weighted Distrib.

66
 Increased distribution

Mercado Hypera

8,600 PDVs 4,900 PDVs

Large
chains 45% of market 70% Coverage

13% Growth 15% Growth

13,600 PDVs 7,100 POS

Mid-
sized 27% of market 76% Coverage

chains
16% Growth 23% Growth

67
SOURCE: IQVIA – PMB Sept’17
 Category Management - 2017

Already implemented

All pharmacies in chain

Whole North region

Pilot stores

8 stores

9 stores

2 stores

68
 Category Management - future

Roll-Out Drogasil
Roll-Out chains with pilot stores
Extrafarma Brasil

69
 Underdeveloped markets in Brazil

Supplements

Niche market, underdeveloped in the

Pharma channel

Probiotics

Great potential market:

US$2.2 Billion

R$440 Million in Brazil: Chewable Weight Chocolate w / Flavored Cholesterol

for kids Loss Antioxidants for kids
Diarrhea and colic only Probiotics

70
SOURCE: IMS PMB – Sept’17 – PPP / Mintel – Vitamins, Minerals and Suplements – US – Sept’ 17
 Initiatives – OTC self-service exposure

Mid-sized chains & independent stores – Challenge: OTC exposure

Current situation

• 56% of stores with behind-the-counter

exposure
• OTC accounts for 41% of self-service
and only 12% of space
• High presence of OTC in POS means
greater growth
• High presence: + 15% Growth(2)
• Average/Low presence: + 6%
Growth(2)

71 NOTE:(2) High / Very High> 30% POS Value; Average / Low / Very Low: <30% POS Value
SOURCES: Close Up Outlook 2017; Quintiles IMS World Review 2017
 Initiatives – Increased media coverage: Globo package

Vignettes and Commercials

throughout the 2018 program

Increased coverage and

frequency

Reapplication bonus throughout

programming

72
SOURCE: Internal data
 Consumer Health
2017 Launches

Maracugina Merthiolate Clean Tamarine Kids

Biotônico (New Flavours) Zero-Cal Flavours Adocyl

73
 Branded Generics

Revenue Breakdown • Generics (Large Chains)

Products • Similars (Independent)

Branded Consumer Strategy • Defend & grow selectively

Prescription Health
41% 30%

Demand Driver • Pharmacist recommendation

Branded
Generics
29%

74
 Branded Generics
Outstanding position with solid evolution

Similars & Generics

Market CAGR
Companies Share 2014-17

#1 25.2% 10.8%

#2 12.3% 10.3%

#3 7.7% 17.2%

#4 7.5% 7.8%

#5 6.6% 23.9%

75
SOURCE: IMS Health – PMB - PPP Dec 17
 Micro-Marketing: opportunities by region/channel
Market share in value/covered markets, Branded Generics and Generics

Region Channel

Highest growth
37.2%
2017: 31.8%
33.8%
South
28.5%
28.4%
26.5% 26.0%

20.2%

South Midwest Southeast Northeast North Large chains Mid-sized chains Independent

76

SOURCE: IMS Health - PMB Sep / 17; Value = Average PF of presentation

 Performance evolution in large chains
Market share in value/covered markets, Generics

21.6%

19.6%

LTM Sept/16 LTM Sept/17

77
SOURCE: IMS Health - PMB Sept/17; Value = Average price of presentation
 Opportunity to "modernize" the portfolio
Weight of the portfolio, in value

# of competitors
(Branded and Generics) Neo Química Profitability

1 2%

2–5 17%

6 – 10 25%

> 10 55%

Focus: 1st to market and markets with high entry barriers

78
SOURCE: IMS Health - IMS PMB Sep / 17
 Key strategic initiatives – Branded Generics

• Improve distribution performance (~ 50% of the market)

• Improve commercial execution

• Strengthen brand and sub-brands

• Accelerate of launches through R&D and BD (+ 20 SKUs in 2018)

79
 Branded Generics
Leadership in main molecules

Similars Generics

Neosoro
Losartan
1st product 1st generics market
by units

Torsilax
4th biggest market
1st
3rd
Sildenafil
generics market

Doralgina Orlistat
5th OTC market 5th generics market

80
SOURCE: IMS Health - PMB
 Branded Generics
Channel opportunities

Market
Relevance

33% 23%
Large
chains

Mid-sized 21% 25%

chains

Independent retail 46% 53%

81
SOURCE: IMS Health - ED
 Branded Generics
Regional opportunities
Market Share
21.5%

17.5%

14.0% 14.4%
14.5%

9.3%

SOUTH MIDWEST SOUTHEAST NORTHEAST NORTH

82
SOURCE: IMS Health – PMB-PPP LTM Jun/16
 Branded Generics
Well-known brand with loyal consumers

AVG
Brand awareness and use leaders¹

Knows 96% 87%

Tried 80% 68%

Uses Regularly 54% 44%

Uses frequently 27% 24%

Brand with lowest level of rejection

83 ¹ Average of 5 largest competitors

SOURCE: Nationwide quantitative survey
 Branded Generics
2017 Launches

Escitalopram Metoprolol Succinate Furosemide

Biggest “controlled drugs” market 2nd generic version of the market 2nd generic version of the market
Launched in 2016 Launched in 2016 Launched in 2016
Reference: Lexapro Reference: Selozok Reference: Lasix

Nebivolol Sotalol Neolefrin

2nd generic version of the market Line extension Biggest OTC-Similar market
1st half 2017 1st half 2017 Launched in 2017
Reference: Nebilet Reference: Sotacor Reference: Naldecon
84
 Agenda

Business Overview

Market Characteristics

Our Business

Financials

85
Financial highlights

Net Revenues EBITDA Net Income

R$ bn R$ mm R$ mm

CAGR CAGR CAGR

9% 10,5% 49% 1.112
1,222
3.6 1,092
3.3
950
3.0 912
2.8
675

338 346

2014 2015 2016 2017 2014 2015 2016 2017 2014 2015 2016 2017

86
 4Q17 Results

R$ million 4Q16 4Q17 ∆

Net Revenue 877.9. 100.0% 1,032.7. 100.0% 17.6% - .

Gross Profit 639.7. 72.9% 769.3. 74.5% 20.3% 1.6 p.p.

Operating Expenses (372.6) 42.4% (423.6) 41.0% 13.7% 1.4 p.p.

Depreciation and Amortization 19.0. 2.2% 18.8. 1.8% -0.8% -0.4 p.p.

EBITDA 286.1. 32.6% 364.5. 35.3% 27.4% 2.7 p.p.

Financial Result 7.0. 0.8% 3.9. 0.4% -43.9% -0.4 p.p.

Taxes (61.9) -7.0% 112.6 10.9% - 17.9 p.p.

Net Income (Continuing Op.) 212.3 . 24.2% 462.2. 44.8% 117.7% 20.6 p.p.

Discontinued Operations (408.1) -46.5% (16.9) -1.6% -95.9% 44.9 p.p.

Net Income (195.8) -22.3% 445.3. 43.1% 27.4% 65.4 p.p.

87
 2017 Results

R$ million 2016 2017 ∆

Net Revenue 3,228.1. 100.0% 3,638.5. 100.0% 12.7% - .

Gross Profit 2,394.8. 74.2% 2,711.7. 74.5% 13.2% 0.3 p.p.

Operating Expenses (1,367.2) -42.4% (1,551.7) -42.6% 13.5% -0.2 p.p.

Depreciation and Amortization 64.2. 2.0% 72.5. 2.0% 13.0% - .

EBITDA 1,091.8. 33.8% 1,232.5. 33.9% 12.9% 0.1 p.p.

Financial Result (192.1) -6.0% 53.4. 1.5% - 7.5 p.p.

Taxes (188.3) -5.8% (101.9) -2.8% -45.9% 3.0 p.p.

Net Income (Continuing Op.) 647.2. 20.0% 1,111.5. 30.5% 71.5% 10.5 p.p.

Discontinued Operations 530.6. 16.4% (146.5) -4.0% - -20.4 p.p.

Net Income 1,177.7. 36.5% 964.9. 26.5% -18.1% -10.0 p.p.

88
Net Debt Reduction
(R$ million)

Debt Profile Net Debt / EBITDA

3.9x
3.1x
3Q17
3T15 4Q17 2.9x
2.6x
Gross Debt (658.3) (676.0)
Cash 1,400.6 1,522.1 1.5x
Net Cash 742.3 846.1

-0.7x -0.7x
2011 2012 2013 2014 2015 2016 2017

89
 Dividends & Capital Reduction 2017
R$1.95

R$ per share

R$1.30 Capital Reduction

30%

R$ 0.65 Dividends
R$ 0.50

Paid in 2016 Paid in 2017

Capital Reduction: R$821.9 mn

Dividend Paid: R$316.2 mn R$409.8 mn

90 ¹ Paid in Feb 24, 2017.

² Paid in July 3, 2017.
 Dividends/IOC

R$ per share
R$0.92
CAGR
36%
42%

R$0.65

R$0.50
R$0.92

R$0.60²
R$0.50

2016 2017 2018

Dividend Yield: 1.9% 2.4% 2.7%

91 NOTE: It considers the dividends paid in the respective periods; Dividend Yield calculated based on the average share price in the 12
months prior to payment.
 ROE – Return on Equity

14.0%

7.2%

2016 2017

92 NOTE: ROE calculation is a result of the division of Continuing Operations Consolidated Net Income by the Consolidated Shareholders' Equity
quarterly average.
 Company’s Main Tax Shields (1/4)

Tax Shield Summary

Expense for
R$ Million Tax Rate Cash Value* Origin
Tax only
- Acquisitions; Amortizable for tax purporses only
Goodwill 597 34% 203
- It does NOT impact the P&L, only the Cash Flow

Income Losses 1,083 - Negative pretax due to Goodwill amortization

- Withholding tax from Financial Income

Recoverable Taxes 326
- Credits from Acquisitions

Total 1,612

* Cash impact sum of tax shields

Possible analysis
impacts P/E EV/EBITDA Returns Cash flow Net income

93 Source: Hypera
¹ Federal tax credits are usable to pay any federal tax payment
 Company’s Main Tax Shields (2/4)

Goodwill Amortization Expense for Tax Purposes only

It does NOT impact P&L
Reason • Acquisitions (R$ million) 4Q17
(R$ million) 4Q17
2018 452

• Reduces Pretax for Tax Purposes only (i.e. an extra 2019

2018 145
452
Effect
expense for tax calculation)
• Difference between P&L and Fiscal Authorities 2019
Total 145
597
calculation is deffered Total 597
Tax Rate 34%
Tax Rate 34%
Tax Shield
Tax Shield 203
203
Information • Earnings Release (Table with Remaining Goodwill
source Amortization for Tax Purposes)

Possible analysis
impacts P/E EV/EBITDA Returns Cash flow Net income

94
Source: Hypera
 Company’s Main Tax Shields (3/4)

Tax Credits from Income tax losses carry-forward Tax Credit

• Lower pretax due to goodwill
Reason
amortization December 30 ,
(R$ Thousand) 2017
• It is actually an Tax credit (not
another expense as goodwill 1,082,869
Effect amortization) 61,777
• It pays up to 30% of Federal 29,346
taxes due in a given year 59,826
22,795
139,991
Information
• Explanatory Note 23(a) –
Quarterly Financial 1,396,604
source
Statements

Possible analysis
impacts P/E EV/EBITDA Returns Cash flow Net income

95
Source: Hypera
 Company’s Main Tax Shields (4/4)

Recoverable Taxes Tax Credit

• Withholding tax from financial
Reason investments
• Tax credits from acquisitions

• It is actually a Tax credit (not

another expense as Goodwill December 30, 2017
Effect Amortization)
• Can be used to offset Federal tax
payments 168,314
175,763
158,301
• Balance sheet (Recoverable 502,378
Information Taxes)
source • Explanatory Note 13 – Quarterly
Federal Taxes¹ 326,435
Financial Statements

Possible analysis
impacts P/E EV/EBITDA Returns Cash flow Net income

96
Source: Hypera; it includes continuing and discontinued operations
Ownership and listings

Ownership structure Listings

• Sao Paulo Stock Exchange: - HYPE3
- BRHYPEACNOR0

Controlling • Indexes with Hypera:

Founder
Group
20% 35%

Free Float
Maiorem
65%
15%

• Ibovespa Index Ranking³: 30/58

• Trade volume¹: 3.1 MM shares/day

• ADR (HYPMY)²: 6.9 MM shares outstanding

¹ January 09, 2017 LTM • Market Cap³: R$22.72 B (USD7.02 B)

² January 09, 2017
97 ³ January 09, 2017
SOURCE: B3; Hypera