PFRM3

Profarma Distribuição, traded on B3 under the ticker PFRM3, is a Brazilian group with more than six decades of operations in the healthcare sector, focused on pharmaceutical distribution and retail. Founded in 1961 by Manoel Birmarcker in downtown Rio de Janeiro, it began its operations as a distributor of medicines and health and wellness products, including personal hygiene items, cosmetics and basic care. Throughout the 1970s and 1980s, the company expanded its customer base and consolidated partnerships with major pharmaceutical manufacturers such as Bristol-Myers Squibb, Roche and Aché, while also expanding its corporate structure. At the turn of the 1990s, the company took important steps in automation and geographic expansion, with the automation of the Rio de Janeiro distribution center in 1997 and the acquisition of KF Distribuidora in São Paulo in 1999, strengthening its presence in one of the country’s main pharmaceutical markets.

Starting in the 2000s, Profarma Distribuição adopted a growth strategy based on diversification of segments, logistical capillarity and access to the capital markets. In 2002, it entered the specialties segment, supplying medicines and hospital products to private clinics and hospitals. In 2004 and 2007, it advanced in the Northeast with the opening of distribution centers in Bahia, Pernambuco and Ceará, in addition to the acquisition of Dimper in Rio Grande do Sul, raising the number of distribution centers to 11 across 10 states. In 2005, it began distributing vaccines through Promovac, expanding its portfolio. In 2006, it carried out its IPO on B3, raising funds to finance its expansion and becoming a pioneer among publicly traded pharmaceutical distribution companies in Brazil. Over the following years, it intensified capitalization moves and strategic partnerships, including an association with US-based Cencora (formerly AmerisourceBergen) in 2014, when it created the Profarma Specialty joint venture, which was later sold and fully discontinued in 2022, marking the group’s exit from the specialties segment.

Profarma Distribuição’s current business model is based on an integrated platform that combines two complementary lines of business: nationwide distribution of medicines and personal hygiene, beauty and cosmetic products, and pharmaceutical retail through the d1000 network. Distribution, the main segment in terms of revenue, accounts for approximately 95% to 96% of consolidated net revenue, playing a central role in cash generation and operating results. The retail front, organized under d1000 Varejo Farma, was structured through the acquisition of the Drogasmil, Farmalife and Tamoio chains in Rio de Janeiro in 2013, and Drogaria Rosário in the Midwest in 2016. In 2020, d1000 carried out its own IPO, strengthening the capital structure of the retail division. Integration between the wholesale and retail operations allows the company to capture commercial, logistical and administrative synergies, notably the demand predictability of the d1000 network, optimized inventory management, shared use of infrastructure and the centralization of corporate processes.

In distribution, Profarma acts as a link between the pharmaceutical industry and retail, concentrating purchasing, warehousing, logistics, credit management and commercial service for a broad client base. As of December 31, 2024, the company operated 15 distribution centers located in Alagoas, Bahia, Espírito Santo, the Federal District, Goiás, Mato Grosso, Minas Gerais, Paraíba, Paraná, Pernambuco, Rio de Janeiro, Rio Grande do Norte, Rio Grande do Sul and São Paulo (Itapevi and São Carlos), with around 150,000 m² of storage area. This structure supports service to approximately 50,000 customers per month, with around 26,000 deliveries per day and presence in more than 4,500 cities. The distributed portfolio includes branded reference and similar drugs, generics, over-the-counter (OTC) medicines, personal hygiene, beauty and cosmetic products, as well as dermocosmetics. Raia Drogasil S.A. is the company’s main customer, accounting for about 14.7% of the group’s net revenue, while other customers do not individually reach 10% of total revenue.

In retail, Profarma Distribuição controls the d1000 network, made up of the Drogasmil, Farmalife, Tamoio and Rosário banners, brands with more than 40 years of history in their regions. As of December 31, 2024, the network had 276 stores distributed across the state of Rio de Janeiro, the Federal District and the state of Mato Grosso. The stores sell medicines, personal hygiene, beauty and cosmetic items, convenience products, dermocosmetics and a set of exclusive brands developed in partnership with third parties, such as Nº21, GOnutri, Bem Básico, Mise, Bonnevi, Dfresh, Mini Moon, Polimix and Wissen. These exclusive brands comprise more than 300 items in over 80 categories and are treated internally as a strategic pillar, both for their margin contribution and for their ability to build loyalty among the customer base. The d1000 network also offers pharmaceutical services, including rapid tests, vaccination and basic health checks, reinforcing its value proposition as an integrated pharmaceutical care solution.

Profarma Distribuição operates within a Brazilian pharmaceutical market undergoing structural growth, driven by population aging, rising demand for healthcare services, the advance of generic drugs and greater access to treatments and wellness products. According to data from consultancy IQVIA, pharmacy revenue in Brazil reached R$ 220.9 billion in 2024, while the distribution market, the channel in which Profarma positions itself as one of the main players, reached R$ 88.3 billion, with double-digit growth. In this context, the company reported revenue growth above the distribution market average measured by ABAFARMA, reaching around 24.6% market share in the fourth quarter of 2024. In retail, the d1000 network posted a 12.6% market share in its operating area at the end of 2024, a movement supported by organic expansion, store modernization and physical–digital integration of sales channels.

From a regulatory standpoint, Profarma Distribuição’s operations and those of its subsidiaries are subject to a broad regulatory framework at the federal, state and municipal levels. The distribution and retail sale of medicines and health products are mainly regulated by the Ministry of Health and the Brazilian Health Regulatory Agency (ANVISA), as well as specific rules such as Law No. 5,991/1973, Law No. 6,360/1976 and ANVISA board resolutions, including RDC No. 44/2009 and RDC No. 430/2020, which addresses good practices for the distribution, storage and transport of medicines. To operate, the company needs Operating Authorizations (AFE) for its headquarters, branches and distribution centers, local sanitary permits and the appointment of technical managers with the Regional Pharmacy Councils. The group does not handle substances subject to special control and therefore, in its current operations, does not depend on a Special Authorization, although it must comply with specific rules for the sale of controlled and antimicrobial medicines, including electronic records in the National System for the Management of Controlled Products.

In terms of governance and social responsibility practices, Profarma Distribuição maintains institutional initiatives aligned with its role in the healthcare sector. In 2006, it created the Profarma Institute for Social Responsibility, focused on supporting children and adolescents in vulnerable situations in the regions where the group operates, through partnerships with charitable institutions. The company is also developing an innovation hub, Próton, launched in 2023, aimed at bringing the health ecosystem closer to entrepreneurs, universities and other innovation hubs, fostering projects related to care solutions, operational efficiency and digital integration. These initiatives are combined with an emphasis on regulatory compliance, product traceability and structured logistics processes, key elements in a market where sanitary safety, quality of service and risk management are central components of corporate activities.

Profarma Distribuição’s presence on B3, through PFRM3 shares, is associated with a business model that is working-capital-intensive and relies on logistical efficiency and scale, in a sector considered less sensitive to economic cycles than other consumer segments. The combination of the distribution segment, which dominates revenue and profit, and the retail arm with established brands and private labels positions the group as an integrated platform in the Brazilian pharmaceutical chain, with operations concentrated in the domestic market and focused on medicines, health, hygiene and beauty products, pharmaceutical services and support solutions for laboratories and retail chains.