PGMN3 Pague Menos

Pague Menos, traded on B3 under the ticker PGMN3, is a pharmaceutical retail chain founded in 1981 by Francisco Deusmar de Queirós in Fortaleza, Ceará. Over more than four decades, the company has evolved from a neighborhood pharmacy into one of the largest chains in the country, consolidating itself as the largest drugstore chain in the North and Northeast regions and the second-largest pharmacy chain in Brazil in terms of number of stores. Since 2009, it has been the only pharmaceutical retail chain with a presence in every Brazilian state and in the Federal District, continuously expanding its network of points of sale and its logistics infrastructure. In 2020, with its initial public offering on B3, it raised funds for a new cycle of organic and inorganic expansion, later reinforced by the acquisition and integration of Extrafarma.

Pague Menos’s business model is centered on specialty retail operations focused on health and well-being. The company operates under the drugstore concept, combining sales of branded drugs, generics, over-the-counter (OTC) products and a wide range of hygiene, nutrition and beauty items, complemented by health services. As of December 31, 2025, the chain had generated gross revenue of more than R$ 16 billion and operated 1,689 stores in more than 400 Brazilian cities, serving a diverse customer base across different income brackets. The company also offers relationship, loyalty and convenience services, such as medication benefit programs, corporate plans and financial solutions tied to purchases made at its stores.

Pague Menos’s operations are organized into a single retail operating segment, but with a product and service portfolio segmented by category. Among prescription drugs, the highlights are branded medications, which include reference and similar drugs, and generic drugs, all under ANVISA regulation and specific pharmaceutical legislation. Among non-prescription products, the company sells OTC medications aimed at acute and self-diagnosable conditions, as well as herbal medicines, vitamins, vision products, health equipment, and nutrition and convenience items. The company also operates a robust hygiene, nutrition and beauty line, including shampoos, cosmetics, sunscreens, baby products and oral care items. Additionally, it offers pharmaceutical care services such as blood pressure and blood glucose measurements, rapid tests, administration of injectables, vaccination, mobile phone top-ups and home delivery, as well as specialized initiatives such as Atendimento de Medicamentos Especiais (AME – Special Medicines Care).

Within its assortment, Pague Menos has developed a significant portfolio of exclusive and private-label products, with manufacturing fully outsourced to selected partners. As of December 31, 2025, the company had approximately 1.5 thousand active private-label items, distributed across categories such as multivitamins, personal hygiene, fragrances, first aid and health accessories. These items accounted for about 6.2% of sales in fiscal year 2025, reinforcing the strategy of differentiating and enhancing the profitability of its product mix. The company also maintains AME, a unit focused on high-complexity, high value-added specialty medicines, such as oncology and fertility products, with a portfolio of more than 600 items, in addition to a multidisciplinary service platform covering the entire country.

The company has adopted an omnichannel strategy to integrate physical and digital channels, which has become a key pillar of its competitive positioning. Digital sales made via website, app, telesales and other channels already accounted for 19.4% of gross revenue in 2025, underscoring the growing importance of e-commerce and remote channels. Online orders are fulfilled exclusively from physical stores through last-mile partners, with delivery times often under two hours in a large part of the network. Pague Menos offers features such as “Click & Collect,” available in 100% of stores; “endless aisle,” which allows delivery of products not available at the originating store from another unit; the use of smart lockers for order pickup; integration with proximity delivery super apps; and a sales and relationship solution via WhatsApp with intensive use of automation and artificial intelligence.

In healthcare service delivery, Pague Menos has been consolidating the concept of an “integrated health hub.” Since 2016, the company has offered in-store clinical services under the Clinic Farma brand, which as of December 31, 2025 were present in 1,181 units. These services include basic consultations, rapid tests, administration of injectables and other pharmaceutical care initiatives, more recently expanded with telemedicine, digital prescriptions and a health services hub in its e-commerce through partner platforms. The company also operates Medication Benefit Programs (PBM) in partnership with the pharmaceutical industry and maintains agreements with more than one thousand companies and health plans, enabling discounts and payment modalities such as payroll-deducted plans, which help build loyalty among a large base of recurring customers.

The expansion and operation of the network are supported by a highly centralized logistics and inventory management infrastructure. In 2025, Pague Menos had ten distribution centers located in different states, with approximately 131 thousand m² of built area, responsible for supplying all stores in the chain, except for certain specific items such as soft drinks, ice cream and vaccines, which are delivered directly by suppliers. Inventory management is automated, based on systems that consolidate daily sales information, calculate restocking needs by store and by product, seek to reduce stockouts and balance working capital and product availability. The company uses telemetry tools and data intelligence to monitor operating indicators in real time, support purchasing, logistics and assortment decisions, and design action plans in multidisciplinary squads that bring together data and operations teams.

Pague Menos’s activities operate within a strict regulatory environment typical of the Brazilian pharmaceutical sector. The company is subject to the rules of the National Health Surveillance System, established by Law 9,782/1999, and to oversight by the Brazilian Health Regulatory Agency (ANVISA) and state and municipal health authorities. The operation of pharmacies and drugstores requires compliance with specific federal laws and regulations, such as Laws 5,991/1973, 6,360/1976, 9,787/1999, 10,742/2003 and 13,021/2014, as well as decrees and ANVISA resolutions, in particular RDC No. 44/2009. The company is also subject to municipal regulations regarding the sale of convenience products in drugstores, with some locations imposing restrictions on such sales, requiring legal measures to ensure continuity.

From a corporate governance and ESG standpoint, Pague Menos has gone through a process of institutional strengthening, especially after General Atlantic became a minority shareholder in 2015 and the company went public in 2020. The company improved its governance structures by creating committees, adopting internal policies and appointing independent members to its board of directors. On the social and environmental front, highlights include participation in social programs since the 1990s, such as its involvement in the federal Alfabetização Solidária (Solidarity Literacy) program, and recent initiatives to assess private-label suppliers based on compliance and environmental, social and governance criteria, with annual audits and action plans for continuous improvement of the value chain.

Pague Menos’s common shares, traded under the ticker PGMN3, reflect a business focused on operating a national pharmacy chain with a strong presence in the North and Northeast regions and increasing integration between brick-and-mortar retail, digital channels and healthcare services. With a base of more than 22 million active customers and a loyalty program with tens of millions of registered users, the company operates a model characterized by high transaction volume, relatively low average ticket and extensive capillarity, all typical features of large-scale Brazilian pharmaceutical retailers listed on B3.