PFRM3 Profarma Distribuição

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 care items, cosmetics and basic care products. Throughout the 1970s and 1980s, the company expanded its customer base and consolidated partnerships with major pharmaceutical companies such as Bristol-Myers Squibb, Roche and Aché, while also expanding its corporate structure. At the turn of the 1990s, the company took relevant steps in automation and geographic expansion, with the automation of its 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.

From the 2000s onward, Profarma Distribuição adopted a growth strategy based on segment diversification, 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, increasing the number of distribution centers to 11 in 10 states. In 2005, it began distributing vaccines through Promovac, expanding its portfolio. In 2006, it held its IPO on B3, raising funds to finance expansion and becoming a pioneer among publicly listed pharmaceutical distribution companies in Brazil. Over the following years, it intensified capitalization moves and strategic partnerships, including its association with the US company Cencora (formerly AmerisourceBergen) in 2014, when it created the joint venture Profarma Specialty, 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 fronts: nationwide distribution of medicines and personal care, beauty and cosmetics 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 from the acquisition of the Drogasmil, Farmalife and Tamoio chains in Rio de Janeiro in 2013, and Drogaria Rosário in the Central-West region in 2016. In 2020, d1000 carried out its own IPO, strengthening the capital structure of the retail division. Integration between wholesale and retail operations allows the company to capture commercial, logistical and administrative synergies, especially thanks to the demand predictability of the d1000 network, optimized inventory management, shared use of infrastructure and centralized 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 customer base. As of December 31, 2024, the company operated 15 distribution centers located in Alagoas, Bahia, Espírito Santo, Distrito Federal, 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 daily deliveries and presence in more than 4,500 cities. The distributed portfolio includes reference and similar (branded) medicines, generics, over-the-counter (OTC) medicines, personal care, beauty and cosmetics products, as well as dermocosmetics. Raia Drogasil S.A. is the company’s main customer, accounting for around 14.7% of the group’s net revenue, while the 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 a track record of more than 40 years 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 care, beauty and cosmetics 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 foster customer loyalty. The d1000 network also offers pharmaceutical services, including rapid tests, vaccination and basic health checks, reinforcing its integrated pharmaceutical care proposition.

Profarma Distribuição operates within a structurally growing Brazilian pharmaceutical market, driven by population aging, increased demand for healthcare services, the advance of generic medicines and greater access by the population to treatments and wellness products. According to data from consulting firm IQVIA, pharmacy revenues 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 average for the distribution market as 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 area of operation at the end of 2024, a movement supported by organic expansion, store modernization and the physical and digital integration of sales channels.

From a regulatory standpoint, the operations of Profarma Distribuição and 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 National Health Surveillance Agency (ANVISA), in addition to specific rules such as Law No. 5,991/1973, Law No. 6,360/1976 and ANVISA board of directors’ resolutions, including RDC No. 44/2009 and RDC No. 430/2020, which deals with good practices for distribution, storage and transportation of medicines. To operate, the company needs Licenses to Operate (AFE) for its head office, branches and distribution centers, local sanitary licenses and the appointment of technical managers to 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 medicines and antimicrobials, including electronic record-keeping in the National Controlled Products Management System.

In terms of governance and social responsibility practices, Profarma Distribuição maintains institutional initiatives related to 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 healthcare ecosystem closer to entrepreneurs, universities and other innovation hubs, fostering projects related to care solutions, operational efficiency and digital integration. These initiatives are complemented by an emphasis on regulatory compliance, product traceability and structured logistics processes, relevant elements in a market where health safety, service quality 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 intensive in working capital, 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, with the retail arm featuring well-established banners and private labels, positions the group as an integrated platform in the Brazilian pharmaceutical chain, with activities focused on the domestic market and a focus on medicines, health, personal care and beauty products, pharmaceutical services and support solutions for laboratories and retail chains.