Hypera Pharma reports Net Revenue of R$1,080.9 million and Operating Cash Flow growth
of 18.9% in the first quarter of 2025
São Paulo, April 23, 2025 - Hypera S.A. ("Hypera Pharma" or "Company"; B3: HYPE3; Bloomberg: HYPE3 BZ; ISIN:
BRHYPEACNOR0; Reuters: HYPE3.SA; ADR: HYPMY) announces its financial results for the 1st quarter of 2025. Financial data disclosed here are taken from the consolidated financial statements of Hypera S.A., prepared in accordance with the Brazilian Accounting Pronouncement Committee (CPC) and the International Financial Reporting Standards (IFRS) issued by the International Accounting Standards Board (IASB).
1Q25 Highlights
- Total sell-out growth of 6.9%¹, of which 6.0%² in pharmaceutical retail and 20.6%³ in Non-Retail
- Cash Flow from Operations of R$570.0 million, or 18.9% higher than 1Q24
- Reduction of 33 Days of Accounts Receivable in 1Q25, when compared to 1Q24
- Interest on Equity approval of R$184.7 million during 1Q25 (R$0.29/share)
Table 1
(R$ million) | 1Q24 | % NR | 1Q25 | % NR | Δ % |
Gross Revenue, net of Returns and Unconditional Discounts | 2,086.6 | 114.2% | 1,396.0 | 129.2% | -33.1% |
Net Revenue | 1,826.7 | 100.0% | 1,080.9 | 100.0% | -40.8% |
Gross Profit | 1,115.3 | 61.1% | 510.3 | 47.2% | -54.2% |
EBITDA from Continuing Operations | 647.8 | 35.5% | (148.5) | -13.7% | - |
Net Income from Continuing Operations | 391.5 | 21.4% | (138.8) | -12.8% | - |
Cash Flow from Operations | 479.2 | 26.2% | 570.0 | 52.7% | 18.9% |
Free Cash Flow | 318.8 | 17.5% | 348.2 | 32.2% | 9.2% |
EARNINGS CONFERENCE CALL - PORTUGUESE: 04/24/2025, 11am (Brasília) / 10am (New York)
Webcast:click here/ Phone: +55 (11) 4700-9668 ID: 864 7993 9499 Passcode: 867859
Replay: ri.hypera.com.br
EARNINGS CONFERENCE CALL - ENGLISH: (Simultaneous translation): 04/24/2025, 11am (Brasília) / 10am (New York)
Webcast:click here/ Phone: +1 (720) 707-2699 ID: 864 7993 9499 Passcode: 867859
Replay: ri.hypera.com.br/en
IR contacts
Note: (1) Sell-out PPP (Pharmacy Purchase Price) and HPP (Hospital Purchase Price), as reported by IQVIA, considers the average
purchase price by pharmacies, chains and hospitals; (2) In PPP, according to IQVIA; (3) In HPP, according to IQVIA+55 (11) 3627-4206ri@hypera.com.br
1
Operating Scenario
Hypera Pharma's total sell-out grew by 6.9%¹ in 1Q25, mainly because of: (i) the 6.0%² growth in the pharmaceutical retail sell-out, in line with the 5.8%² market growth in the categories in which the Company operates; and (ii) the 20.6%³ sell-out increase in Non-Retail, allowing Hypera Pharma to increase its market share in this segment in another quarter. In the same period, the total pharmaceutical market grew by 11.3%4, benefiting mainly from the 28.8% growth in patent- protected drugs.
It is worth noting that Hypera Pharma has important projects in its innovation pipeline to launch molecules that will no longer be protected by patents in the coming years, as well as to strengthen its operations in various categories related to chronic and preventive treatments.
Net Revenue was R$1,080.9 million in 1Q25, and did not keep pace with sell-out growth in the quarter due to the working capital optimization process announced in 2024, which seeks to increase cash generation: (i) by reducing inventories at clients and, consequently, reducing the days of accounts receivable; and (ii) by the expected increase in the Company's profitability, mainly due to the reduction in returns, discounts and discards.
With this progress, the Company expects to bring forward the conclusion of the working capital optimization process to the beginning of 2Q25, contributing to the reduction of investments in working capital as a percentage of Net Revenue and to Hypera Pharma to combine sustainable growth with Return on Invested Capital increase in the coming periods.
In this quarter, Hypera Pharma significantly reduced inventories of its products at clients, making significant progress in the working capital optimization process. The reduction in inventories at clients helped the Company: (i) to end the quarter with a reduction of 33 days in Accounts Receivable, compared to 1Q24; and (ii) to have receivables term of approximately 70 days for the sales made at the end of 1Q255 and of approximately 60 days for sales made in April.
It is important to mention that the working capital optimization process has no impact on sell-out performance in the short or in the medium term, on the shareholder remuneration and on the planned investments in marketing, innovation and production capacity increase.
Hypera Pharma declared Interest on Equity of R$184.7 million in 1Q25 (R$0.29/share), and invested R$640.9 million in marketing, innovation and in the increase of its production and distribution capacity.
In 1Q25, the Company strengthened its product portfolio with important launches, especially the line extensions of important brands in Analgesics, Sun Protection and Gastroenterology. In this quarter, total investment in Research and Development was R$126.3 million6.
Hypera Pharma is the only pharmaceutical player with a relevant participation in all the retail market segments and present in practically every point of sale in Brazil, with an irreplicable portfolio of leading brands. The combination of these attributes with the strength and resilience of the brand portfolio and the contribution of the innovation pipeline make the Company the pharmaceutical industry best prepared to capture the growth opportunities in the Brazilian pharmaceutical market in the coming years.
Note: (1) Sell-out PPP (Pharmacy Purchase Price) and HPP (Hospital Purchase Price), as reported by IQVIA, considers the average purchase price by pharmacies, chains and hospitals; (2) In PPP, according to IQVIA (3) In HPP, according to IQVIA; (4) In PPP (Pharmacy Purchase Price) and HPP (Hospital Purchase Price), as reported by IQVIA, excludes Therapeutic Class Z, Infant Formulas and MECE Market for Diagnostic Tests; (5) Average receivables term for sales made in March/2025; (6) Considers the R&D expenses and the amount capitalized as intangible assets. Excludes the effect of the Lei do Bem and the R&D amortization
2
Earnings Discussion
Income Statement
Table 2
(R$ million) | 1Q24 | % NR | 1Q25 | % NR | Δ % |
Net Revenue | 1,826.7 | 100.0% | 1,080.9 | 100.0% | -40.8% |
Gross Profit | 1,115.3 | 61.1% | 510.3 | 47.2% | -54.2% |
Marketing Expenses | (262.2) | -14.4% | (367.2) | -34.0% | 40.0% |
Selling Expenses | (215.2) | -11.8% | (262.2) | -24.3% | 21.9% |
General and Administrative Expenses | (71.1) | -3.9% | (86.2) | -8.0% | 21.2% |
Other Operating Revenues (Expenses) | 15.2 | 0.8% | (19.6) | -1.8% | - |
Equity in Subsidiaries | (2.6) | -0.1% | (1.2) | -0.1% | -54.7% |
EBIT from Continuing Operations | 579.4 | 31.7% | (226.0) | -20.9% | - |
Net Financial Expenses | (205.6) | -11.3% | (195.2) | -18.1% | -5.1% |
Income Tax and CSLL | 17.7 | 1.0% | 282.4 | 26.1% | 1492.0% |
Net Income from Continuing Operations | 391.5 | 21.4% | (138.8) | -12.8% | - |
Net Income from Discontinued Operations | (2.6) | -0.1% | (2.3) | -0.2% | -11.9% |
Net Income | 388.9 | 21.3% | (141.1) | -13.1% | - |
EBITDA from Continuing Operations | 647.8 | 35.5% | (148.5) | -13.7% | - |
3
Net Revenue
Graph 1
Gross Revenue, net of Returns and
Unconditional Discounts (R$ mm)
Δ 1Q25 vs 1Q24
-33.1%
2,086.6
1,396.0
1Q24 | 1Q25 |
Graph 2
Net Revenue (R$ mm)
Δ 1Q25 vs 1Q24
-40.8%
1,826.7 | |
1,080.9 | |
1Q24 | 1Q25 |
Table 3
(R$ million) | 1Q24 | 1Q25 | Δ % |
Gross Revenue, net of Returns and Unconditional Discounts | 2,086.6 | 1,396.0 | -33.1% |
Promotional Discounts | (108.6) | (207.1) | 90.6% |
Taxes | (151.3) | (108.0) | -28.6% |
Net Revenue | 1,826.7 | 1,080.9 | -40.8% |
Gross Revenue, net of Returns and Unconditional Discounts, totaled R$1,396.0 million in the quarter, while Net Revenue reached R$1,080.9 million.
Gross Revenue, net of Returns and Unconditional Discounts, and Net Revenue did not keep pace with the growth in sellout due to the acceleration of the working capital optimization process, which seeks to increase cash generation by reducing inventories at clients and, consequently, the days of accounts receivable.
The reduction in Net Revenue at a higher level than the reduction in Gross Revenue, net of Returns and Unconditional Discounts, is mainly the result of the increase in Promotional Discounts to boost sell-out growth in generics, as also observed in recent quarters. It is important to mention that the level of Promotional Discounts in 1Q24 was significantly lower than the quarterly average of R$215.6 million over the last 12 months.
4
Gross Profit
Graph 3
Gross Profit (R$ mm)
Δ 1Q25 vs 1Q24
-54.2%
1,115.3 | |
510.3 | |
1Q24 | 1Q25 |
Graph 4
Gross Margin (%)
Δ 1Q25 vs 1Q24
-13.9 p.p.
61.1% 47.2%
1Q24 | 1Q25 |
Table 4
(R$ million) | 1Q24 | % NR | 1Q25 | % NR | Δ % | Δ p.p. |
Gross Profit | 1,115.3 | 61.1% | 510.3 | 47.2% | -54.2% | -13.9 p.p. |
Gross Profit was R$510.3 million in the quarter, with a reduction in Gross Margin of 13.9 percentage points when compared to 1Q24. The reduction in Gross Margin is mainly a result of the change in the mix of products sold and lower operating leverage due to the working capital optimization process that began in 2024, which resulted in a decrease in Net Revenue in this quarter, mainly in categories that have a Gross Margin higher than the Company's average.
5
Marketing Expenses
Table 5
(R$ million) | 1Q24 | % NR | 1Q25 | % NR | Δ % |
Marketing Expenses | (262.2) | -14.4% | (367.2) | -34.0% | 40.0% |
Advertisement and Consumer Promotion | (75.6) | -4.1% | (141.5) | -13.1% | 87.3% |
Trade Deals | (39.2) | -2.1% | (63.8) | -5.9% | 62.5% |
Medical Visits, Promotions and Others | (147.4) | -8.1% | (161.9) | -15.0% | 9.8% |
Marketing Expenses grew 40.0% in 1Q25 and totaled R$367.2 million. The growth in Marketing Expenses at a higher level than the growth in sell-out in the quarter is mainly the result of: (i) the reduction in Marketing Expenses by 2.2% in 1Q24, compared to 1Q23, when sell-out in the pharmaceutical retail market grew 7.6%, according to IQVIA; and (ii) the increase in investments in Advertising and Consumer Promotion and Trade Deals, in line with the Company's strategy of boosting the sell-out growth of its portfolio of brands, especially through greater investment in digital media.
Selling Expenses
Table 6
(R$ million) | 1Q24 | % NR | 1Q25 | % NR | Δ % |
Selling Expenses | (215.2) | -11.8% | (262.2) | -24.3% | 21.9% |
Commercial Expenses | (130.5) | -7.1% | (163.0) | -15.1% | 24.9% |
Freight and Logistics Expenses | (45.0) | -2.5% | (52.9) | -4.9% | 17.7% |
Research & Development | (39.7) | -2.2% | (46.3) | -4.3% | 16.6% |
Selling Expenses grew by 21.9% in 1Q25, higher than the sell-out growth, mainly because of the increase in Commercial Expenses, which totaled R$163.0 million, in line with the quarterly average of R$162.8 million over the last 12 months.
General and Administrative Expenses & Other Operating Revenues / Expenses, Net
Table 7
(R$ million) | 1Q24 | % NR | 1Q25 | % NR | Δ % |
General & Administrative Expenses | (71.1) | -3.9% | (86.2) | -8.0% | 21.2% |
Other Operating Revenues (Expenses) | 15.2 | 0.8% | (19.6) | -1.8% | - |
General and Administrative Expenses amounted to R$86.2 million in 1Q25, an increase of 21.2%. The growth in General and Administrative Expenses is mainly a consequence of the 11.9% reduction in these expenses in 1Q24, compared to 1Q23, due to the lower level of payroll expenses related to the administrative teams and the reduction in consultancy expenses in that period. Compared to 1Q23, the growth in General and Administrative Expenses in 1Q25 was 6.7%.
6
EBITDA from Continuing Operations
Graph 5
EBITDA (R$ mm)
647.8
(148.5) | |
1Q24 | 1Q25 |
Graph 6
EBITDA Margin (%)
35.5%
-13.7% | |
1Q24 | 1Q25 |
Table 8 - EBITDA from Continuing Operations
(R$ million) | 1Q24 | % NR | 1Q25 | % NR | ∆ % |
EBITDA from Continuing Operations | 647.8 | 35.5% | (148.5) | -13.7% | - |
EBITDA from Continuing Operations was negative by R$148.5 million in 1Q25, mainly as a result of the working capital optimization process that started in 2024, which resulted in: (i) a 33.1% reduction in Gross Revenue, net of Returns and Unconditional Discounts in this quarter, with the aim of reducing inventories at clients and, consequently, the days of accounts receivable; and (ii) a reduction in Gross Margin due to the change in the mix of products sold and lower operating leverage.
In addition, it should be noted that the Company did not change its main initiatives to support its sustainable sell-out growth during the working capital optimization process, which resulted in an increase in marketing, sales, general and administrative expenses and, consequently, an increase in the share of these expenses as a percentage of Net Revenue, contributing negatively to EBITDA from Continuing Operations and EBITDA Margin.
7
Net Financial Expenses
Table 9
(R$ million) | 1Q24 | % NR | 1Q25 | % NR | Δ R$ |
Financial Result | (205.6) | -11.3% | (195.2) | -18.1% | 10.4 |
Net Interest Expenses | (178.0) | -9.7% | (188.4) | -17.4% | (10.4) |
Cost of Hedge and FX Gains (Losses) | (3.3) | -0.2% | 16.7 | 1.5% | 20.0 |
Other | (24.3) | -1.3% | (23.5) | -2.2% | 0.8 |
The Financial Result was negative by R$195.2 million in 1Q25, R$10.4 million less than in 1Q24. This variation is mainly the result of the positive impact of the exchange rate variation on the Suppliers and Assignment of Receivables balances and the lower gross debt spread.
Net Income
Table 10
(R$ million) | 1Q24 | % NR | 1Q25 | % NR | Δ % |
EBIT from Continuing Operations | 579.4 | 31.7% | (226.0) | -20.9% | - |
(-) Net Financial Expenses | (205.6) | -11.3% | (195.2) | -18.1% | -5.1% |
(-) Income Tax and Social Contribution | 17.7 | 1.0% | 282.4 | 26.1% | 1492.0% |
Net Income from Continuing Operations | 391.5 | 21.4% | (138.8) | -12.8% | - |
(+) Net Income from Discontinued Operations | (2.6) | -0.1% | (2.3) | -0.2% | -11.9% |
Net Income | 388.9 | 21.3% | (141.1) | -13.1% | - |
EPS | 0.62 | - | (0.22) | - | - |
EPS from Continuing Operations | 0.62 | - | (0.22) | - | - |
Net Income from Continuing Operations decreased in the quarter, as a result of the reduction in EBIT from Continuing Operations due to the working capital optimization process that began in 2024.
8
Cash Flow (Continuing and Discontinued Operations)
Graph 8
Cash Flow from Operations (R$ mm)
Δ 1Q25 vs 1Q24
90.8
570.0 479.2
1Q24 | 1Q25 |
Graph 9
Free Cash Flow (R$ mm)
Δ 1Q25 vs 1Q24
29.5
318.8 | 348.2 |
1Q24 | 1Q25 |
Table 11
(R$ million) | 1Q24 | 1Q25 |
Cash Flow from Operations | 479.2 | 570.0 |
Capital increase in subsidiaries/associates | (0.5) | 0.0 |
Purchase of Property, Plant and Equipment | (78.6) | (147.4) |
Purchase of Intangible Assets | (81.8) | (62.4) |
Sale of Property, Plant and Equipment | 0.5 | (12.0) |
(=) Free Cash Flow | 318.8 | 348.2 |
The Company recorded the highest Cash Flow from Operations in its history in a first quarter, even with the reduction in EBITDA from Continuing Operations. Cash Flow from Operations was R$570.0 million in 1Q25, or 18.9% higher than in the same period of the previous year, benefiting mainly from progress in the working capital optimization process.
The growth in Cash Flow from Operations helped the Company to continue investing significantly in innovation and in expanding its production capacity and to achieve free cash flow of R$348.2 million in the quarter, 9.2% higher than in 1Q24.
9
Net Debt
Table 12
(R$ million) | 12/31/2024 | 03/31/2025 |
Loans and Financing | (9,380.0) | (9,294.8) |
Notes Payable | (17.3) | (17.5) |
Gross Debt | (9,397.4) | (9,312.3) |
Cash and Cash Equivalents | 1,739.3 | 1,740.1 |
Net Cash / (Debt) | (7,658.0) | (7,572.2) |
Unrealized Gain/Loss on Debt Hedge | 156.9 | 78.5 |
Net Cash / (Debt) After Hedge | (7,501.1) | (7,493.7) |
The company ended 1Q25 with Net Debt after Hedge of R$7,493.7 million, compared to R$7,501.1 million at the end of 2024.
10