FORM 20-F Grupo Casa Saba, S.A.B. de C.V.

Table of Contents
In addition to the U.S. Dollar, we now face currency exchange risk versus the Chilean peso (CLP), the Euro and the Chilean Development Unit (or UF by its Spanish
acronym). As part of the acquisition, we assumed certain CLP, Euro and UF-denominated liabilities by which we could be adversely affected in the event that any of these currencies
appreciate against the Peso. Nonetheless, the asset accounts and future revenues would have the opposite effect under such a scenario. In the event that any of these currencies
depreciates against the Peso, the opposite would hold true. For the year ended December 31, 2011, 89.1% of our total debt that is subject to foreign exchange fluctuations was CLPdenominated,
9.8% was denominated in UFs, 1.1% was U.S. dollar-denominated and 0.1% was denominated in Euros. We cannot assure you that fluctuations in any of the currencies
used in the countries where we have operations will not adversely affect our financial results in the future.
Severe devaluation or depreciation of the Peso may also result in the disruption of the international foreign exchange markets. This may limit our ability to transfer or
to convert Pesos into U.S. Dollars and other currencies for the purpose of making timely payments of principal and interest on any non-Peso-denominated debt we may incur in the
future, which could, in turn, affect our ability to obtain foreign services and products. Devaluation or depreciation of the Peso against the U.S. Dollar may also adversely affect U.S.
Dollar prices for our securities on the Mexican Stock Exchange, including the Ordinary Shares and, as a result, will likely affect the market price of the ADSs. Such fluctuations would
also affect the conversion value of any cash dividends paid on the Ordinary Shares in Pesos into U.S. Dollars.
Effects of Economic and Governmental Factors on Our Results of Operations
The majority of our operations and assets are located in Mexico. As a consequence, our results of operations may be significantly affected by the general condition
of the Mexican economy, Mexican inflation, interest rates and political developments in Mexico. With the acquisition of Drogasmil and FASA, our operations in the countries where we
now have a presence may be significantly affected by the general conditions of these economies. See “Item 3. Key Information—Risk Factors Relating to Economic and Political
Developments”.
Economic Situation
In 2005, the Mexican economy benefited from sharp increases in oil prices and global economic recovery. As a result, the Mexico’s GDP for the year grew by 3.0%,
annual inflation was 3.3% and the interest rate on 28-day CETES averaged 9.2%. During 2006, Mexico’s GDP grew 4.8% mainly as a result of presidential, congressional and state
elections, which enhanced extraordinary spending and a continued increase in oil prices. Inflation was 4.1% and the interest rate on 28-day CETES averaged 7.2%. During 2007, the
Mexican economy proved resilient in the face of a downturn in the U.S. economy. GDP growth was 3.3%, inflation was 3.8% and the interest rate on 28-day CETES averaged 7.2%. In
response to the worldwide economic downturn, in 2008 Mexico’s GDP growth was cut in half, declining to 1.6%, inflation rose to 6.5% and the interest rate on 28-day CETES averaged
7.7%. In 2009, the Mexican economy continued to be affected by the global economic crisis. GDP declined by 6.5% while the average interest rate on the 28-day CETES fell to
5.4%. Inflation, however, decreased to 3.6%. In 2010, the Mexican economy gained strength, posting a GDP growth of 5.5% stemming from increased production and the demand for
exports brought on in large part by increased industrial activity in the United States. The interest rate on 28-day CETES averaged 4.40% as a result of national monetary policies that
were in line with the trends in the global economy, and the inflation rate was 4.40%. During 2011, despite lower GDP growth (3.9%), a record drought that has fueled farm prices and
greater volatility in the peso/dollar exchange rate, the Mexican economy was relatively stable given that overall annual inflation rate fell to 3.8% and the interest rate for the 28-day CETE
averaged 4.2%.
For each of the years ended on December 31, 2006 and 2007 approximately 99% of our consolidated net sales resulted from sales to parties located within Mexico.
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