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Grupo Casa Saba Announces Sales and Operating Income Increased 14.05% and 13.45%, Respectively
Date:7/28/2008

Financial Highlights:

(All figures are expressed in millions of Mexican pesos as of December 31, 2007. Comparisons are made with the same period of 2007, unless otherwise stated. Figures may vary due to rounding practices. "bp" stands for basis points)

- Sales for the quarter totaled $6,959.41 million

- Gross income increased 34.45%

- Gross margin for the quarter was 10.64%

- Quarterly operating expenses as a percentage of sales were 7.19%

- The operating margin for the quarter was 3.46%

- Net profit for the quarter reached $210.09 million

- Cash and cash equivalents at the end of the quarter was $315.42 million

MEXICO CITY, July 28 /PRNewswire-FirstCall/ -- 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 second quarter of 2008.

QUARTERLY EARNINGS

NET SALES

During the second quarter, GCS's sales were $6,959.41 million, an increase of 14.05%.

Sales for our Private Pharma division grew 13.62% during the second quarter of 2008, due to the consolidation of investments made within the sector over the past several months, including the most recent acquisition of Drogasmil Medicamento e Perfumeria, S.A.(1), a Brazilian pharmacy chain.

Sales in our Health, Beauty, Consumer Goods, General Merchandise and Others division rose 10.52% compared to the second quarter of 2007. This growth was primarily the result of the acquisition of new lines of consumer products that we distribute on an exclusive basis.

Sales in our Government Pharma division increased 58.91% due to a significant increase in the number of units sold, primarily to PEMEX.

Publication sales decreased 1.31% as a result of lower unit sales. This decrease was due to the fact that Citem stopped distributing some publications that that did not meet our minimal profitability requirements.

The sales mix did not change significantly this quarter. Private Pharma sales represented 83.70% of total sales (compared to 84.02% during the second quarter of 2007), while Government Pharma accounted for 3.92% (versus 2.82% during the second quarter of 2007). Health, Beauty, Consumer Goods, General Merchandise and Other represented 9.21% (compared to 9.50% in the second quarter of 2007) and Publications made up the remaining 3.17% (versus 3.66% during the second quarter of 2007).

SALES BY DIVISION

PRIVATE PHARMA Sales in our Private Pharma division rose 13.62% during the second quarter of 2008, as a result of the consolidation of investments that were made within the sector during the past several months. This includes the most recent acquisition of Drogasmil Medicamento e Perfumeria, S.A.(2), a Brazilian pharmacy chain.

Sales reached $5,825.07 million and represented 83.70% of the Group's total sales.

GOVERNMENT PHARMA

Sales in our Government Pharma division grew 58.91% due to a significant increase in the number of units sold, primarily to PEMEX.

Government Pharma sales reached $273.04 million during 2Q08 and accounted for 3.92% of our total sales.

HEALTH, BEAUTY, CONSUMER GOODS, GENERAL MERCHANDISE AND OTHER

Sales in our Health, Beauty, Consumer Goods, General Merchandise and Other division increased 10.52% versus the second quarter of 2007, primarily as a result of the acquisition of new lines of exclusively distributed consumer products.

PUBLICATIONS

Publication sales decreased 1.31% as a result of lower unit sales. This decrease was due to the fact that Citem stopped distributing some publications that that no longer met our minimal profitability requirements.

This division's participation as a percentage of total sales went from 3.66% in 2Q07 to 3.17% in the second quarter of 2008.

GROSS INCOME

During the second quarter of the year, Grupo Casa Saba's gross income increased 34.45% to reach $740.63 million. The company's gross margin improved as a result of the recent investments, to reach 10.64%.

OPERATING EXPENSES

Operating expenses reached $500.13 million, an increase of 47.58% compared to the second quarter of 2007. This was due to the investments that were made over the past several months. Operating expenses represented 7.19% of our total sales.

OPERATING INCOME

Operating income continued to grow. This quarter, it rose 13.45%, to reach $240.50 million. The operating margin was 3.46%, 1 b.p. lower than the 3.47% margin registered in the second quarter of 2007.

OPERATING INCOME PLUS DEPRECIATION AND AMORTIZATION

Operating income plus depreciation and amortization for 2Q08 was $259.07 million, an increase of 9.61% compared to the second quarter of 2007. Depreciation and amortization for the period was $18.57 million, 23.81% lower than in the second quarter of 2007.

CASH AND CASH EQUIVALENTS

Cash and cash equivalents at the end of the second quarter of 2008 was $315.42 million.

COMPREHENSIVE COST OF FINANCING

During the second quarter of 2008, GCS's comprehensive cost of financing (CCF) was $47.66 million due to an increase in the amount of interest income paid. This interest came, in large part, from the long-term loan related to the Brazilian acquisition.

OTHER EXPENSES (INCOME)

During the second quarter of 2008, the Company registered an income of $21.16 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 second quarter, tax provisions were $3.91 million. These provisions included $39.57 million in income tax and -$35.66 million in deferred income tax.

NET INCOME

GCS's net income for the second quarter was $210.09 million, an increase of 15.92% compared to the second quarter of 2007. The net margin for the period was 3.02%, 5 b.p. higher than the net margin obtained during the second quarter of 2007.

WORKING CAPITAL

During the second quarter of 2008, our accounts receivable days were virtually the same at 60.6 days (they were 60.2 days in the second quarter of 2007). In addition, our accounts payable days increased 1.3 days compared to 2Q07, to reach 48.0 days. Finally, our inventory days were 53.9 days, 1.5 more days than in 2Q07.

1 The acquisition took place on May 15, 2008.

2 The acquisition took place on May 15, 2008

Contacts:

GRUPO CASA SABA IR Communications:

Rodrigo Echagaray, IRO Jesus Martinez Rojas

+52 (55) 5284-6672 +52 (55) 5644-1247

rechagar@casasaba.com jesus@irandpr.com

Alejandro Sadurni, CFO

asadurni@casasaba.com


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SOURCE Grupo Casa Saba
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