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

Table of Contents
With the acquisition of Drogasmil in Brazil in May 2008 and the subsequent purchase of FASA in October 2010, approximately 22% of our consolidated net sales in
2011 resulted from sales to parties located outside of Mexico. In the past, inflation has led to high interest rates and devaluations of the Peso. Inflation itself, as well as governmental
efforts to reduce inflation, has had significant negative effects on the Mexican economy in general and on Mexican companies, including us, in particular. One result of inflation in
Mexico is the decrease in the real purchasing power of the Mexican population, which can lead to a decrease in the demand for the products that we distribute and/or sell. In addition,
the Mexican government’s efforts to control inflation by tightening the monetary supply have historically resulted in higher financing costs as real interest rates have increased. Such
policies have had and could have an adverse effect on our business, financial condition and results of operations.
Brazil and, to a lesser extent, Chile have historically had high inflation and interest rates. The impact of high inflation rates and high interest in these countries could
have adverse effects in our operations in such country. Consumer demand could decrease as purchasing power declines and access to their respective credit markets could become
more difficult and at high interest rates.
In Brazil, the annual inflation rate was 6.5% in 2011, somewhat higher than the 4.5% target set by the Central Bank while annual GDP growth was 2.7%, stimulated
primarily by agriculture and internal demand which was driven by the country’s robust labor market, lower bowering costs and a reduction in the industrial production tax on select
consumer goods. Lower GDP growth can be attributed to a combination of external factors such as the Eurozone crisis as well as internal factors such as rising inflation. In 2011, the
Selic averaged 11.67%, down from its peak of 12.5% in July.
In 2011, the Chilean economy posted an annual GDP growth of 6.3%, its fastest pace since 1997 and annual inflation was 4.4%. The labor market is tight as the
unemployment rate dropped to 6.6% at the end of December, which could potentially put pressure on prices in the future, causing inflation to rise.
Introduction to Our Operations
The following table sets forth the real price increases and unit volume growth for our Private Pharma division for the years indicated:
Year Ended December 31,
2009 2010 2011
Total Mexican Private Pharmaceuticals Market:
Real Unit Price Increases (0.4%) (2.3%) (4.2%)
Growth in Units (2.5%) 0.7% 5.5%
Casa Saba Private Pharmaceutical Distribution:
Real Unit Price Increases 3.1% (5.9%) 2.3%
Growth in Units (5.8%) 3.9% (6.7%)
Market Share of Grupo Casa Saba(1): 22.9% 23.6% 20.9%
Inflation:(2) 3.6% 4.4% 3.8%
(1) Based on information from IMS Health, A.G. (Mexico) and Grupo Casa Saba’s own estimates. This market share does not include purchases made by government institutions
and sales in the private pharmaceutical market related to pharmaceutical products with the same active ingredient but are not branded by any particular laboratory (similares),
generics and, generic products that are recommended to clients by pharmacy employees at the point-of-sale or by the dispensing physician (impulse). Also includes an IMS
estimate of sales through non-wholesalers.
(2) Based on the changes in the NCPI.
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