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transcript
OP-E0001
Publication: 12/2011
Laboratório Stiefel Brasil: rethinking the business
model
Lars Meyer Sanches
Paulo Roberto Dias1
It was a hot morning in early November 2008 in the congested megalopolis of São Paulo.
Max Ferreira, the sales and logistics director at Stiefel Brasil, had just arrived from visiting a
client and was thinking about the proposal he would give to Sandra Stefano, the company's
CEO, at the head office in three weeks. Despite its position as the leading producer of
dermatology products in Brazil, the company had been losing market share for six years. The
reports from the company’s Customer Service Center contained many complaints from
customers who couldn't find Stiefel products stocked in drugstores. To make matters worse,
three large clients had come to him complaining about problems caused by the excessive
inventories of Stiefel products they held and were threatening to stop distributing them. At
the board of directors meeting the previous week, shortly after having reported on
difficulties with meeting the budgeted levels of sales revenue, Antônio Silva, the company's
CFO, had warned of the impacts on the financial results from the high discounts offered to
clients and the very high inventories that Stiefel held in its distribution center. Antônio had
also announced across-the-board cuts in the budgets of all of departments, which would
1 This case study was developed by professor Lars Meyer Sanches, PhD and Paulo Roberto Dias, MBA. This case
study is solely for the purpose of classroom discussion and does not propose to render an opinion on managerial
effectiveness or ineffectiveness or to serve as a primary source of data.
Copyright © 2011 Insper Instituto de Ensino e Pesquisa
No part of this case study may be reproduced or transmitted by any electronic or mechanical means, including
photocopying, recording or any storage system, without the express written consent of Insper Instituto de Ensino
e Pesquisa. Violators will be subject to the sanctions set forth in articles 102, 104, 106, 107 of Federal Law 9,610 of
February 19, 1998.
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make it impossible to change the primary product packaging, a move that had long been
defended by Carlos Pereira, the company's marketing director.
Max knew the company was perfectly capable of taking advantage of the excellent
prospects for Brazil's dermatology market, but to do so the firm had to stop losing market
share. The efforts by the marketing department in recent years had led the company’s
products to enjoy an excellent reputation among dermatologists, but he knew that it was no
use to lead in prescriptions written if consumers were unable to find the products on
drugstore shelves.
The pharma market
The world pharma market ended 2007 with sales revenue of US$ 712 billion and growth
of 6.5% in relation to the previous year. The expectations for the coming years called for
annual growth in excess of 5%. The industry’s growth strategy was changing. Before
companies had sought to launch the so-called blockbusters, which consisted of innovative
products protected by patents that represented a large share of a company’s revenue. But the
extremely high investment costs, the lengthy time-to-market, the high risk that research
would not lead to the development of a revolutionary product and the impact of the patent's
expiration on results had led companies to explore new strategies. Companies began
expanding the range of their launches, which meant they had to start investments on
multiple research fronts at lower costs and to acquire the sales rights of products developed
by other laboratories.
The industry's growth had begun to be led by emerging countries, the so-called
pharmerging markets, which consisted of a group of countries whose major players were
China, Brazil, Mexico, India, Russia, South Korea and Turkey, where sales had grown by
more than 16% in 2007. This market grouping represented 13% of the world market, but
accounted for close to 23% of its total growth. This growth was leading many companies to
focus their attentions on this market, which created an investment wave and the arrival of
new laboratories in a move that became known as the pharmerging gold rush. The main driver
of this strong growth in demand for pharmaceutical products was the higher purchasing
power of the population. In Brazil, the ascension of a large contingent of the population to
the middle class, which began with the stabilization of inflation in 1994 and continued under
the Lula administration, enabled greater access to medications, driving growth in the
pharma market. Pharmaceutical products were divided into two major categories: those
available by prescription only (RX) and those freely available on pharmacy shelves known as
over-the-counter (OTC) drugs. Generic drugs, which contain the same active ingredients as
their branded counterparts, were also available (Exhibits 1 and 2).
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Stiefel
Founded in Germany in 1847 to produce medicinal soaps, the family-based business
moved to New York in 1910 and later, in 1977, to southern Florida, where its head office was
established. The company had factories in the United States, Mexico, Brazil, Singapore,
Ireland and Pakistan (Exhibit 3), over 3,000 employees and research and development
facilities in various locations. In 2007, its operations in over 30 countries on all five continents,
as well as through representatives and distributors in another 70 countries, generated global
revenue of US$ 906 million. Stiefel specialized in the dermatology market with both RX and
OTC products, selling flagship products such as Clindoxyl for acne, Olux E for dermatitis and
Soriatane for psoriasis. The company had grown consistently in recent years under the
leadership of Charles Stiefel, an executive know for his boldness and passion for the family
business. In view of its leading position in a highly profitable segment, its strong recall
among dermatologists and the drying up of the launch pipeline of major companies in the
pharma industry, the Stiefel family had to fend off several acquisition bids by larger
laboratories.
Stiefel launched its operations in Brazil in 1971, with a plant in São Paulo that produced a
line of RX products called Ethical. In 1995, it created its Consumer line of OTC products. In
1999, the company inaugurated a modern plant in the city of Guarulhos in the São Paulo
metropolitan area that had sufficient production capacity to support its sales growth over the
next ten years (Exhibit 4).
The strategy of Stiefel Brazil was to cultivate and maintain strong relationships with
dermatologists, beginning with their residencies. The company supported schools by buying
books and computers and sponsoring conferences. Reaching a leading position in Brazil's
dermatology segment was the result of many years of offering innovative, high-quality
products and cultivating these close relationships with dermatologists, who were responsible
for writing the initial prescriptions. Until 2002, Stiefel held 13% of the market in terms of
sales revenue (Exhibit 5). In contrast with many healthcare segments, the dermatology
segment did not suffer from government intervention. This allowed companies in the
segment to obtain higher returns than those operating in segments characterized by strong
governmental intervention. In other segments, already in the 1980s and resumed in 1999, the
government regulated the retail prices of medicines. To maintain its leadership in the
segment, Stiefel competed with other dermatology companies, including La Roche-Posay,
Galderma and Mantecorp. However, the arrival of major competitors such as Roche, Bayer
Schering and Procter&Gamble also represented a serious threat to its leadership.
Marketing and Innovation at Stiefel Brazil
Stiefel produced two major product lines: Ethical and Consumer (Exhibit 6). The Ethical
line of products was prescribed by dermatologists, with the most popular of these the
SunMax line of sunscreen products, the Vitanol line of retinoic acid and Clindoxyl line of acne
products. Although they did not require a prescription, sales of the Consumer product line
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were also influenced by dermatologists, with this line’s most popular products consisting of
the sunscreen lotion Spectraban, the moisturizer Hidrafil and the skincare line Clariderm.
Stiefel adopted the care package concept, which meant it offered a line of complementary
products capable of meeting all the needs of a specific treatment. Stiefel’s products were sold
in drugstores at prices around 15% above the market average. Although the percentage of
revenue it invested in R&D was similar to that of its competitors, there were internal
concerns of the company’s ability to accompany its largest competitors in terms of the launch
of innovative products at the pace required by the market. There were also complaints about
the quality of the packaging, which often were crumpled when they arrived on pharmacy
shelves. In the past few years, returns accounted for close to 1% of sales, and the main
reasons cited were damage to packaging during transport and the fact that products had
exceeded their expiration dates.
Distribution channels
Product availability at points of sale was as important as recommendations by physicians.
Initial purchases of the Consumer product line were also influenced by subjective criteria
such as brand recall, packaging design and exclusive space for products on drugstore shelves.
Pharmacy attendants were also important influencers of consumer opinions.
Drugstore chains
Stiefel directly served Brazil’s major drugstore chains, such as Droga Raia, Drogasil and
Drogaria SP, as well as many other chains. These chains sought to work with low inventory
levels (on average 30 days of consumption for all products) and valued the high level of
service offered by laboratories. Their main service criteria were reliability (on-time delivery
of quantities ordered) and delivery lead time. Other highly valued aspects were Point-of-
sales activities, such as having personnel to assist clients (dermatology consultants), offering
promotional packages, purchasing exclusive space, promoting product kits and advertising
products in pharmacy pamphlets. Although Stiefel’s products represented only a small
portion of the pharmacies’revenues, the chains benefitted from the customers with high
purchasing power attracted who purchased other products on impulse. A typical
dermatology prescription listed four products with an average cost of R$ 300.00 (around
US$ 150). However, since the purchasing decisions of Brazilian consumers were strongly
influenced by price, the chains had to offer competitive prices. For this reason, they exerted
great pressure on laboratories and had no qualms about purchasing from distributors if they
were able to obtain more competitive prices. It was common for buyers to hold “auctions” in
final days of a month to decide from which supplier they would buy. In the case of Stiefel’s
products, in unusual situations, distributors would sell to chains at even an 18% discount,
while Stiefel sold products with an 8% discount. This practice allowed pharmacy chains to
significantly increase their margins.
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Distributors
Because of the large number of drugstores in Brazil (over 60,000), Stiefel sold around 75%
of its volume through a group of distributors that were responsible for reselling products to
many independent pharmacies located nationwide. The distributors worked with an average
mark-up of 5%, in comparison with the average mark-up of 30% of chains. Since each
pharmacy was visited by several distributors, price was a crucial criterion for sales.
Moreover, since most pharmacies kept low inventory levels, distributors were expected to be
able to replenish products quickly, which forced them to maintain minimum levels of all
products in inventory. To obtain competitive resale prices, distributors used part of their
monthly budgets to speculate. Like pharmacy chains, distributors waited until the end of the
month and claimed they were overstocked (which was not always true for all products) in
order to secure more discounts from laboratories. When they were able to secure favorable
prices, they would buy large quantities of products, which allowed them to go several
months without making additional purchases. In addition to discounts, distributors could
also extend their payment terms.
To take advantage of taxes with different rates set by state governments, such as the Taxes
on Goods and Services (ICMS) state tax, distributors maintained warehouses in various
states, with the locations where distributors received deliveries from laboratories varying in
accordance with the tax benefits. While the average ICMS tax rate for the industry was 18%
of the product price, depending on the state, distributors could enjoy a deferred tax credit of
between 8% and 12%. Although most customers were located in states in the Southeast
region, such as São Paulo, the revenue of laboratories was very high in states like Goiás and
Espírito Santo, which offered significant tax incentives (Exhibit 7). These tax incentives led to
benefits that corresponded to approximately 4% of a product's price, already considering the
additional logistics costs.
In the past few years, competition intensified among the main distributors as each sought
to become market leader. In some cases, they even sold medicines with negative margins in
order to gain market share. It was common for distributors to offer drugstore chains more
competitive prices than the actual laboratories. Moreover, sale representatives at distributors
were encouraged to place products at any sales point. As a result, it was easy to find
dermatology products in small grocery stores (“mercadinhos”). In addition to these two
distribution channels, Stiefel also sold directly to institutional clients, such as medical
cooperatives and government agencies. However, this latter channel accounted for just 2% of
the company’s total sales volume.
The impression shared by Stiefel’s more than 300 clients was that of an excellent company
with exceptional products but that had difficulties in delivering products on time and was
suffering from the entry of new competitors that could launch a greater number of products
and were more concerned with influencing consumers at the point of sale. In a conversation
with one physician, Max heard her compare Stiefel with soap-opera actors like Antônio
Fagundes and Fernanda Montenegro, who were very popular, consistent and never got their
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lines wrong, but who were also nearing retirement. Meanwhile, she compared La Roche-
Posay with Reynaldo Gianechini and Gisele Bündchen, who were much younger, more
promising and a lot sexier. Since 2000, La Roche-Posay has been investing heavily in creating
unique packaging, securing the best positions at the most important points of sale and
providing training to pharmacy assistants. It had closed deals with various drugstores to
secure exclusive space on shelves and maintain promotional materials in establishments,
efforts that would ensure La Roche-Posay a higher share of direct sales to drugstores than
Stiefel.
Sales and Logistics Department
The sales department was managed by the chief Sales and Logistics Operations officer,
Max Ferreira, a young executive born in the interior region of the state of São Paulo. Since he
was 15 years old, Max had taken an interest in sales. He began selling cars and had a
promising career in pharmaceutical laboratories. During his years in the pharmaceutical
industry, Max had built a strong reputation among many distributors and drugstore chains.
He had recently graduated with honors from an executive MBA program in São Paulo.
Max’s structure included the recently hired national sales manager, Pedro Marcondes, who
supervised four regional account managers who were responsible for product sales. There
were also district managers who managed some 80 sales representatives spread nationwide
(Exhibit 14). The representatives were responsible for promoting products at dermatologists
and clients (distributors and drugstore chains) and many of them had worked at the
company for decades. There was a tradition of promoting the sales representatives with the
most years of service as account managers or district managers. As a result, Stiefel’s
representatives and most of its employees were very proud to work for the company and
were very committed. The account managers had a low fixed salary and an aggressive
variable compensation policy tied to monthly sales targets. Although they often complained
about the constant lack of products, they usually met their sales target. One of the ways they
found to meet their targets was to expand their client portfolio, offering additional discounts
or extending payment terms. Some even resorted to making emotional pleas: “Help me out.
Just buy a little bit more this month. If I don’t reach my target, I’ll have problems here at the
company.” They were required to make sales projections for each of the company’s 90 SKUs
and complained a lot about the difficulties in forecasting sales that fluctuated so much
(Exhibit 8). The forecasts made by the account managers were consolidated by the Logistics
Operations Department and used to determine the volume of products to be manufactured.
Besides the managers in the Sales Department, Max was also responsible for the Logistics
Department. To head up this department he hired a young executive named Roberto
Guimarães who was concluding his Executive MBA at Insper. The challenges Roberto faced
were enormous.
All of Stiefel’s clients were served by the factory distribution center in the city of
Guarulhos. However, because of tax incentives, many clients wanted to receive products at
their own distribution centers, and the fact that they were located in states far from São
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Paulo resulted in long travel times (Exhibit 7). Considering the time required to process (two
days) and dispatch (three days) orders, and depending on the travel time agreed upon in the
Service Level Agreement (SLA), it was not unusual for clients to wait more than ten days to
receive their orders. Almost 50% of monthly orders were processed during the last five days
of the month (Exhibit 9), which overloaded the logistics team and led to the payment of
overtime hours. In addition to these additional costs, the lack of handling and freight
capacity made on-time delivery more problematic and made it difficult for the company to
follow the procedures recommended by the Risk Management area, which was charged with
reducing the incidence of theft during transport.2
There was also enormous pressure to reduce distribution costs. The higher number of
small clients increased the number of split orders, which increased personnel needs in the
picking3 operations, leading to higher payroll costs. The number of overtime hours had been
growing at a rate of 10% per year. Although on the one hand the alternative of using
standardized shipping boxes filled with a high number of primary packages chosen by the
Manufacturing Department had benefits, on the other hand, the excess space between the
individual products in boxes made them less resistant and increased the loss rate from
damage to products and packaging, particularly during the long journeys on the poorly
maintained roads outside of the state of São Paulo (Exhibit 10). The standardized boxes also
increased the need for piece-picking (opening boxes and separating individual products). To
make matters worse, Roberto also struggled with excessive costs from holding high
inventories at the distribution center (Exhibit 11).
There were many products with sufficient inventory to meet the sales projected for the
next two years, which required a larger storage area and generated constant product losses
due to deterioration, since the average expiration date was 24 months and most clients
would not accept products with expiration dates shorter than 12 months. At the same time,
due to pressure from colleagues in the Sales Department, Roberto constantly requested
changes in the factory’s production schedule to minimize product shortages. He also
monitored the forecasting accuracy (Exhibit 12) and the frequent discrepancies between the
forecasts made by the regional account managers and the volume produced by the plant. The
higher prices charged by freight operators at the end of the month and the constant flow of
returns due to expiration or problems with orders were also serious problems. In April, the
number of returns was even worse than usual. Robert often complained about the lack of
reliable data upon which to base decisions and the fact that many of the company’s
departments lacked formal processes.
2 In Brazil, the incidence of theft of high value added cargo was very high, which forced companies to not only
pay for cargo insurance but also to adopt special measures, such as limiting the quantity of products carried by
each vehicle and traveling only during the daytime. According to the National Freight and Logistics Association
(NTC), in 2007, R$ 735 million in goods was stolen during transport in Brazil, which corresponds to 0.3% of
the country's GDP.
3 Picking refers to separating the products ordered by customers, a process that usually requires a large number
of employees.
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Manufacturing
João Sanches, the chief manufacturing officer, was an experienced pharmacist in charge of
the entire production department. João complained about the serious impacts that the
constant forecasting errors made by the Sales Department had on his operations: “My plant
isn’t flexible enough to change the production line at just any time! You should tell the
people in marketing to stop increasing the number of products I have to produce. We have
many restrictions imposed by ANVISA.4 We have a long response time and must ensure the
factory’s peak operational efficiency in order to offset the low utilization rate of our lines.”
Local suppliers also suffered from the frequent changes to orders and were often unable to
meet Stiefel’s requests in a timely fashion, which caused line stoppages and last-minute
reprogramming of production. In the case of international suppliers, the problem was even
worse, with products taking months to arrive and suffering from ANVISA delaying the
release of lots at airports. To mitigate the effects from the fluctuations in forecasting and to
lower inventory levels, João asked his team to make their own sales forecasts and use them
to plan production and purchasing. Moreover, to boost line efficiency, João prioritized the
production of large batches, which meant less time lost with setting up the lines.
Finances
The Finance Department received annual sales revenue targets from the company’s global
executives and was responsible for calculating the budget for operating expenses and for
preparing the managerial income statement (Exhibit 13). The Finance Department also was
responsible for setting product prices and breaking down the revenue expectations for
establishing the quotas of the regional account managers. These numbers were approved by
the executives at Stiefel Latin America and if a country was not achieving good results, they
would be modified over the course of the year to ensure that regional targets were met
(Brazil accounted for 70% of the company’s Latin American revenues). The department
struggled with the lack of data and often warned the Sales Department that it should shorten
the average payment term. The department was also responsible for reporting to the head
office the reasons why the company did not meet its targets in any given month.
The turnaround challenge
In early 2007, Sandra Stefano was hired to head up Stiefel Brazil and lead a turnaround
process that would stop the market-share losses that had been occurring over the previous
six years and take advantage of the prospects for growth in the Brazilian market. Although
young, Sandra had worked for 20 years at a large laboratory recognized in the segment for
its high-quality executives. Sandra had a reputation for being a direct, results-oriented
4 The National Sanitary Surveillance Agency (ANVISA) is the governmental agency charged with regulating the
industry. Before a product can be sold, ANVISA requires detailed information on the production process, which
includes the formula used, an explanation of the productive process and the size of the production lot. Changes to
any of these factors require authorization by the agency, which can take years to secure.
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executive capable of making tough decisions. She seemed to be the right person for the
challenge. After a few months, Sandra began changing the company’s organizational
structure (Exhibit 14): She hired Max Ferreira, who she had worked with previously. On his
first day, she took him aside and said: “I’m giving you the authority to make whatever
changes you think are necessary for us to stop losing market share, but we have to meet our
target for this fiscal year (which ends in March 2009).”
To better understand the situation, Max decided to visit some clients. One of the larger
clients reacted with astonishment upon seeing Stiefel’s sales director: “What are you doing
here? Did you want to sell something? I have 120 days of your products in stock and I still
haven’t received payment for the R$ 200,000 in expenses I incurred because I had to
incinerate a pile of your expired products!” When Max asked the account manager who had
accompanied him about the high inventory (Exhibit 15), he was told the tactic helped long-
term sales since it generated “shelf pressure”: distributors would push the stock to
drugstores, which in turn would boost sales. Upon returning to his office, Max thought
about how to best resolve the problem of Stiefel’s shrinking market share: “How can I
increase sales if my clients are overstocked and distributor discounts, which should be 12%
at most, are often 15% of the sales price? Then there’s the matter of reaching the sales
revenue target. I’m going to call Roberto and Pedro to help me to put together a proposal for
Sandra.”
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Exhibit
Exhibit 1 – Evolution of Brazil's pharmaceutical industry
Source: IMS Health.
Exhibit 2 – Breakdown of social classes in Brazil
A Class: over 30 minimum wages
B Class: from 15 to 30 minimum wages
C Class: from 6 to 15 minimum wages
D Class: from 2 to 6 minimum wages
E Class: under 2 minimum wages
Note: the minimum monthly wage in 2007 was R$ 380.00, or US$ 182.00
Source: IMS Health.
US$ 10.8B US$ 12.2B US$ 13.4B
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Exhibit 3 – Location of Stiefel's operations in 2008
Source: Stiefel.
HEAD OFFICE
Sales Operations
Plants
R&D
Offices and other
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Exhibit 4 – History of Stiefel in Brazil
Source: Stiefel.
1971 – Launches
operations in the Santo
Amaro district of
São Paulo
1995 – Opens new
offices in the Vila
Olímpia district of São
Paulo
1996 – Begins
construction of new plant 2007 – Begins turnover of
executive team
1995 – Launches new
Consumer product line
1999 – Opens new
plant in Guarulhos
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Exhibit 5 – Market share in Brazil's dermatology segment
Competitors Market Share
Nov/2005 Nov/2006 Nov/2007
TOTAL 100.0% 100.0% 100.0%
STIEFEL 10.0% 9.8% 8.8%
MANTECORP I Q FARM 6.4% 6.5% 6.7%
GALDERMA 7.7% 7.0% 6.2%
LA ROCHE POSAY 4.0% 5.0% 5.9%
MEDLEY 4.0% 4.6% 5.3%
BAYER SCHERING PH 5.6% 5.2% 4.6%
EUROFARMA 4.0% 4.4% 4.6%
PROCTER&GAMBLE 4.4% 4.6% 4.5%
ROCHE 3.9% 4.2% 4.3%
EMS PHARMA 2.9% 3.7% 4.1%
Source: IMS Health.
Exhibit 6 – Photograph of Stiefel Brazil's products
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Exhibit 7 – Breakdown of Stiefel Brazil’s sales by state
% Net Rev: Net Sales percentage
Km: distance from factory in kilometers
SLA: Service Level Agreement
Source: Stiefel.
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Exhibit 8 – Stiefel Brazil’s Monthly Sell-in vs. Sell-out
Source: IMS Health.
Sell-in: Stiefel´s sales to client
Sell-out: Sales by Stiefel´s client
Exhibit 9 – Percentage of Stiefel Brazil’s sales over the month
(Nov. 2006 vs. Nov. 2007)
Source: Stiefel
-
200.000
400.000
600.000
800.000
1.000.000
1.200.000
1.400.000
Sell in
Sell out
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Exhibit 10 – Condition of Brazil's Highways
São Paulo State Privatized Highway
Government owned Highway in the Northeast Region
Government owned Highway in the Midwest Region
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Exhibit 11 – Stiefel Brazil’s monthly inventory and net sales
Source: Stiefel.
Exhibit 12 – Stiefel Brazil’s forecasting accuracy
% of SKU´s with forecasting errors between – 20% and 20%
Source: Stiefel.
-
500.000
1.000.000
1.500.000
2.000.000
2.500.000
3.000.000
Apr 06
May
06
June
06
July
06
Aug
06
Sep 06
Oct
06
Nov
06
Dec 06
Jan
07
Feb 07
Mar
07
Apr 07
May 07
June
07
July 07
Aug
07 Sep
07
Oct
07 Nov
07 Dec
07
-
1.000.000
2.000.000
3.000.000
4.000.000
5.000.000
6.000.000
7.000.000
8.000.000
9.000.000
10.000.000
Finished product inventory (US$) Sales revenue (US$)
Sales Inventory
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Exhibit 13 – Typical income statement of industry companies
Net sales price 100
Direct costs 30
Production costs 10
Raw materials and
packaging 15
Logistics 5
Gross margin 70
Indirect expenses and taxes 50
Net margin 20
Note: Figures do not exactly match those of Stiefel.
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Exhibit 14 –Stiefel Brazil’s Organizational Chart, 2008
Latin America Chief
Executive Officer
Chief Manufacturing
Officer João Sanches Brazil Chief Executive
Officer Sandra Stefano
HR ManagerChief Sales and Logistics
Officer Max Ferreira
Chief Marketing
Officer Carlos Perreira
Chief Financial Officer
Antonio Silva
Chief Legal
Officer
Medical
Manager
10 District
Managers
National Sales
Manager Pedro Marcondes
Sales and Logistics
Manager Roberto Guimarães
Training
Manager
4 Regional Account
Managers
80
Sales Representatives
R&D VP
Chief R&D Officer
IT Manager
National Demand
Manager
Global
Manufacturing VP
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Exhibit 15 – Average inventory of Stiefel Brasil's products in distribution channels
Source: Laboratórios Stiefel.
Benchmark
Days of coverage
100
78
67
88
6259
71
71
78
86
61
72
30
45
60
75
90
Jan 07 Feb 07 Mar 07 Apr 07 May 07 Jun 07 Jul 07 Aug 07 Sep 07 Oct 07 Nov 07 Dec 07