Operating Income and Net Income Increased 8.2% and 29.5%, Respectively MEXICO CITY, Feb. 28 /PRNewswire-FirstCall/ -- Grupo Casa Saba ("Saba," "GCS," "the company" o "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 fourth quarter of 2006. All figures are expressed in millions of pesos as of December 31, 2006. Variations presented compare the period with the same period in 2005, unless otherwise stated. Figures may vary due to rounding practices. "bp" stands for basis points. NET SALES During the fourth quarter of 2006, Grupo Casa Saba sales decreased 0.83% when compared to the same 2005 quarter. The decline mainly reflects a high comparison base for Private Pharma sales and lower sales to the government, as well as health and beauty products. It's worth mentioning that during 2005's fourth quarter, and particularly during month of December that year, special season sales took place and triggered a double-digit growth in the period. In December 2006, the Private Pharma market did not offer the same conditions to reach the sales volumes registered in 2005, affecting the growth rate of our main division, Private Pharma. Sales of Publications and Food Products rose 12.48% and 8.33%, respectively. The increases reflect a good acceptance of our catalogs of products in the different markets where we operate. SALES BY DIVISION PRIVATE PHARMA During 2006's fourth quarter sales in our Private Pharma divisions rose 0.90%. This modest growth reflects a high comparison base, particularly in December. Special end of season sales in the last month of 2006 could not match those of 2005, as the market for private pharmaceuticals did not offer the conditions to reach December 2005 sales. Even when December was a difficult month in terms of comparison for this division, the positive performance of the national private pharmaceuticals market in terms of values, allowed quarter sales to reach $5,616.53 million, while its percentage to total sales increased to 85.19% in 4Q06 from 83.73% in 4Q05. GOVERNMENT PHARMA Sales of our Government Pharma division, which include sales to government institutions, whether federal or state, decreased 26.59%, as sales to Petroleos Mexicanos (PEMEX) declined. Lower sales to PEMEX stem from an internal modification applied by the institution to their subrogation scheme of pharmaceutical products. With sales decreasing, the percentage to total sales of this division also declined from 4.63% in 4Q05 to 3.43% in 4Q06. HEALTH, BEAUTY, CONSUMER GOODS, GENERAL MERCHANDISE AND OTHER Mainly as a result of lower sales of health and beauty products, sales from this division, which include products other than pharmaceuticals and publications, declined 7.79% during 2006's fourth quarter. The reduction in health and beauty products sales stems mainly from the decision made by some of our clients not to buy these type of products from GCS. Conversely, food products sales had a good performance, increasing 8.33% with respect to 4Q05. As a percentage to total sales, the sales reduction in this division affected its contribution to total sales, declining from 8.92% in 4Q05 to 8.28% in 4Q06. PUBLICATIONS Citem's which is GCS' subsidiary that distributes publications nation wide (mainly magazines), increased sales by 12.48% from 4Q05. The increase stems from a better distribution of products by type of client in the different niches where it operates, along with a greater acceptance and demand for year-end editions. As a result, the division's percentage to total sales grew from 2.73% in 4Q05 to 3.10% in 4Q06. GROSS INCOME Grupo Casa Saba's gross income during the fourth quarter of 2006 decreased 3.97% from the same 2005 period. Lower sales and greater discounts offered contributed to this decrease. The increase in discounts stems from the strong competition that prevails in all channels of the private pharmaceutical market. OPERATING EXPENSES The operating expenses of the Group as a percentage to total sales decreased by 87 b.p. to 5.43%. Operating expenses performance during the fourth quarter of 2006 was influenced by storage and route efficiency programs, as well as by corporate and administrative expense savings schemes. Total operating expenses for the Group declined 14.46% from 4Q05, or $60.59 million. OPERATING INCOME Given that the reduction in expenses was proportionately above the lower gross income, GCS's operating income increased 8.18% from 4Q05. As a percentage of total sales, operating income of the Group represented 5.45% in 4Q05 and closed at 5.94% in 4Q06. OPERATING INCOME PLUS DEPRECIATION AND AMORTIZATION Depreciation and amortization in 4Q06 decreased 56.79% from 4Q05, as the Group's computer equipment stopped depreciating a few months ago and a goodwill registered in the fourth quarter of 2005 was not registered in 4Q06. Operating income plus depreciation and amortization in 4Q06 increased 0.35% from the same previous quarter, amounting to $413.12 million. CASH AND CASH EQUIVALENTS Cash and cash equivalents in 4Q06 totaled $616.38 million pesos, representing a 17.09% decreased from 4Q05. The decline in the cash position owes to higher investment in working capital of the Group. COMPREHENSIVE COST OF FINANCING The comprehensive cost of financing (CCF) in the fourth quarter generated an income of $6.45 million, 109.18% above the income in 4Q05. This growth mainly stems from a gain during the fourth quarter in our monetary and exchange rate positions, compared to a losses registered in 4Q05. OTHER EXPENSES/INCOME Other expenses/income in 4Q06 totaled $125.54 million, as a result of transportation equipment sales, third-party services and others. TAX PROVISIONS Tax provisions for 4Q06 increased 85.60% from 4Q05. The relationship between tax provisions and income before taxes represented 18.39% in 4Q05 and closed at 24.40% in 4Q06. NET INCOME GCS' net income in 4Q06 increased 29.45%, or $89.93 million, to $395.34 million. Net income as a percentage of total sales increased from 4.59% in 4Q05 to 6.00% 4Q06. WORKING CAPITAL During the fourth quarter of 2006, account receivables measured in terms of days increased from 2005 by 0.3 days to 55.3 days. Inventory days also grew by 3.50 days to 60.8 days. Account payables, conversely, decreased by 0.90 days to 52.2 days. DATASOURCE: Grupo Casa Saba, S.A. de C.V. CONTACT: Jorge Sanchez, Investor Relations, +011-52-55-5284-6672, or , or Jesus Martinez Rojas, IR Communications, +011-52-55-5644-1247, or , or Alejandro Sadurni, CFO, , all of Grupo Casa Saba Web site: http://www.casasaba.com/

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