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

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Table of Contents Industry Trend Information Production/Products Since 2010, the loss of patent protection has begun to facilitate the entry of a greater number of generic products into the Mexican market. In 2011 alone, three of the five highest selling products in the world lost their patent protection and by the end of 2012, a total of 60 products will be eligible for generic production in Mexico. Several multinational laboratories have implemented a variety of strategies in an attempt to counter the competition by national generic drug producers. Some, such as Pfizer, are trying to offset their losses by formulating their own generic versions of the original branded product while others, such as Novartis and Sanofi-Aventis, have purchased companies that specialize in generic drug production. The Mexican government’s decision to lift the restriction that required drug makers to operate plants in the country in order to sell their products has also had an affect on pharmaceutical production trends in Mexico. As the demand for generics continues to grow, it has also begun to attract foreign companies specializing in this segment. In 2011, Hetero Drugs, an Indian-based pharmaceutical company, entered the Mexican market and has begun working with private sector clients to produce their controlled and private label brands. Brazilian generic drug maker, Medley (which was purchased by Sanofi-Aventis in 2009), has announced that it would be entering the Mexican market in 2012 with an initial portfolio of 32 low-cost generic drugs, which will provide further competition for this sector. Another trend that may have an impact on future drug production and sales is the increase in the number of patients worldwide who are being diagnosed with diseases such as diabetes. The number of people who have been diagnosed with diabetes in Mexico, particularly type II diabetes, has grown significantly over the past several years and it is believed that more than half of the population that has this disease has still not been diagnosed. Pharmaceutical companies have therefore begun forming long-term commercial alliances to develop new diabetes products to meet the growing demand. Generics producers are also gaining ground in this area, especially with government health providers who seek lower-cost options. Sales and Inventory In general, the Latin American pharmaceutical market has grown steadily over the last several years and is projected to continue growing due to a combination of factors that include: generally stable economic conditions, ageing populations and the efforts being made by governments within the region to increase access to healthcare among the overall population. The Mexican private pharmaceutical market has solid growth fundamentals which lead us to expect sustained annual growth over the coming years. The main factors supporting this expected growth are Mexico’s demographic structure (adults represent an increasing proportion of Mexico’s total population), the increase in chronic illnesses such as diabetes and the increase in the life expectancy of the Mexican population. The combination of these factors has generated growth in the demand for healthcare services and pharmaceutical products. In addition, the government’s Seguro Popular Program has been instrumental in granting health care access to nearly 100% of the Mexican population. Despite the overall growth that we expect to continue in the pharmaceutical market, which generally benefits our wholesale distribution business, in recent years there has been a shift in the percentage of private sector pharmaceutical sales from those that are placed through wholesalers, like us, to sales that are placed directly by the manufacturers to large retail pharmacy chains and supermarket supercenters that purchase sufficiently large volumes to have direct access to the laboratories. According to IMS Health, A.G. and our internal data, private sector pharmaceutical sales that are placed through wholesalers have declined from 90% in 2007 to around 75% in 2011. A continued increase in direct sales by manufacturers to retail pharmacy chains could have a material adverse effect on our results of operation in this division. 75
Table of Contents Grupo Casa Saba has always considered Information Systems to be a key competitive factor in current competing markets. Therefore, we believe that we have been successful in using technology to help us optimize both our sales and our inventory days. Our record of on-time deliveries is in the range of 98%, which we believe is one of the best rates in the business. The use of GPRS mobile devices for our sales force has also had a positive effect in terms of sales agility and more up-to-the minute information for our sales representatives. Today, these devices work under a Windows Mobile platform. Nevertheless, we believe that in the near future a more open platform such as Android will be available, which will put downward pressure on prices that we are preparing to take advantage of. We have also recently completed the development of a new version of our Point-of-Sale System focused on government pharmacy operations. We believe that this new software solution may be one of the best in the business today, given that it has been developed with open standards that allow it to be very slim, web based, and easy to modify. We expect this to be an excellent tool for improving our position in the Government market segment in the near future. Although electronic data interchange (EDI) has been available in our market for many years, it was only recently that Government regulations for EDI have been fully implemented. This regulation not only regulates electronic transactions but it will require all Mexican business to adopt Electronic Invoicing between 2011 and 2012. Grupo Casa Saba fully complies with this regulation and has been active in the discussions related to its implementation. With respect to our non-pharmaceutical or HBCG/other products related business divisions, we believe that higher levels of economic growth are necessary to increase the demand for these products; therefore, our ability to generate positive results in the coming years will depend on the improvement of general economic conditions and increases in consumer purchasing power. Socio-demographic trends have helped fuel the growth of the retail market in Brazil. As is the case in Mexico, Brazil is also experiencing similar trends in terms of the growth of the adult population, prompted by an increase in overall life expectancy. Brazilians’ average life expectancy has increased, from 68.5 years in 1995 to 72.3 years in 2009. As a result, the over-60 population in the country has increased significantly over the course of the last ten years and it is this group that is most likely to stimulate the demand for both healthcare services and pharmaceutical products in the future. In addition, older consumers are generally more affluent and have larger discretionary incomes, making them a target demographic for many manufacturers, including for over-the-counter healthcare products. Government programs, such as the “Bolsa Familia” and the “Farmacias Popular” which offer subsidized medicines have also helped stimulate demand for these products. From a socio-economic standpoint, we would also expect that the decrease in the unemployment in Brazil from 12.3% in 2004 to less than 4.7% in December 2011, combined with an increase in the average salary in the last ten years, will stimulate the consumption of ethical drugs, HBCG and Other products as the middle class continues to expand. The increase in the number people who are formally employed also means that more Brazilians are covered by private insurance. As a result, they are more likely to consult physicians when they are ill, thus broadening access to pharmaceutical products. However, as is the case in Mexico, the continued demand for these products will require a continued stable economic environment. The Chilean public health system covered nearly three quarters of the population in 2011, with health care expenditures representing 4.4% of the country’s overall GDP. As the population continues to grow and more workers are incorporated into the formal sector, government health spending is expected to keep pace with the increase. The country’s strong economic growth projections are also expected to have a positive effect on the pharmaceutical industry, which has been growing steadily since 1996. 76
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UNITED STATES SECURITIES AND EXCHAN
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TABLE OF CONTENTS PART I Item 1. Id
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Table of Contents We caution you th
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Table of Contents Year ended Decemb
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Table of Contents To the extent tha
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Table of Contents We Provide Remote
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Table of Contents We Are a Holding
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Table of Contents Today, the market
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Table of Contents Any future deprec
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Table of Contents Risk Factors Rela
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Table of Contents In August 2009, A
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Table of Contents In April of 2008,
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Table of Contents The Acquisition h
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Page 31 and 32: Table of Contents At our annual gen
Page 33 and 34: Table of Contents We distribute the
Page 35 and 36: Table of Contents In our stores, we
Page 37 and 38: Table of Contents Prior to 2008, th
Page 39 and 40: Table of Contents In 2011, we conti
Page 41 and 42: Table of Contents To better serve s
Page 43 and 44: Table of Contents ● Mexsana talcu
Page 45 and 46: Table of Contents Payments and Coll
Page 47 and 48: Table of Contents Information Techn
Page 49 and 50: Table of Contents In addition to th
Page 51 and 52: Table of Contents (3) In Mexico, ph
Page 53 and 54: Table of Contents (4) To calculate
Page 55 and 56: Table of Contents We also offer our
Page 57 and 58: Table of Contents The devaluation o
Page 59 and 60: Table of Contents (****) Associates
Page 61 and 62: Table of Contents In January 2009 w
Page 63 and 64: Table of Contents In our Retail Pha
Page 65 and 66: Table of Contents Inflation and Int
Page 67 and 68: Table of Contents With the acquisit
Page 69 and 70: Table of Contents Results of Operat
Page 71 and 72: Table of Contents Net Income. The G
Page 73 and 74: Table of Contents On March 25, 2010
Page 75 and 76: Table of Contents Grupo Casa Saba i
Page 77: Table of Contents In the event that
Page 81 and 82: Table of Contents Prior to the noti
Page 83 and 84: Property and equipment Our balance
Page 85 and 86: Labor obligations Our labor liabili
Page 87 and 88: Tax and legal contingencies We are
Page 89 and 90: FRS C-4. “Inventories” (FRS C-4
Page 91 and 92: Table of Contents As of the transit
Page 93 and 94: Table of Contents Name and Date of
Page 95 and 96: Table of Contents Employee Profit S
Page 97 and 98: Table of Contents The Chairman of t
Page 99 and 100: Table of Contents All related party
Page 101 and 102: Table of Contents Significant Chang
Page 103 and 104: Table of Contents The table below s
Page 105 and 106: Table of Contents ● ● ● ● a
Page 107 and 108: Table of Contents ● ● ● ●
Page 109 and 110: Table of Contents Directors Under t
Page 111 and 112: Table of Contents Forfeiture of Sha
Page 113 and 114: Table of Contents We are organized
Page 115 and 116: Table of Contents Ownership by non-
Page 117 and 118: Table of Contents ● Gain on sales
Page 119 and 120: Table of Contents We anticipate tha
Page 121 and 122: Table of Contents As a foreign priv
Page 123 and 124: Table of Contents Item 12. Item 12A
Page 125 and 126: Table of Contents During the review
Page 127 and 128: Table of Contents Since we are Mexi
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Table of Contents PART III Item 17.
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Table of Contents INDEX TO CONSOLID
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Table of Contents REPORT OF INDEPEN
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Table of Contents ATTESTATION REPOR
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Table of Contents Grupo Casa Saba,
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Table of Contents Grupo Casa Saba,
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Table of Contents NOTES TO THE CONS
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Table of Contents a) Through an ass
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Table of Contents Proforma condense
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Table of Contents 3. Significant ac
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Table of Contents The errors accoun
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Table of Contents Investments in as
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Table of Contents Effective 2011, t
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Table of Contents The Company recog
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Table of Contents The Group has cre
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Table of Contents In addition, the
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Table of Contents Foreign currency
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Table of Contents 8. Derivative fin
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Table of Contents 10. Goodwill, int
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Table of Contents At December 31, 2
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Table of Contents On January 25 and
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Table of Contents 13. Other payable
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Table of Contents 15. Foreign curre
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Table of Contents On December 18, 2
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Table of Contents c) Tax loss carry
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Table of Contents All significant t
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Table of Contents On December 7, 20
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Table of Contents ● ● For real
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Table of Contents 22. Differences b
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Table of Contents ii) For Mexican F
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Table of Contents At December 31, 2
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Table of Contents 23. Reconciliatio
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Table of Contents 24. Supplementary
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Table of Contents g) Quantitative a
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Table of Contents ● In October 20
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Table of Contents Page Representati
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CREDIT AGREEMENT (THIS “AGREEMENT
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(k) To the best of its knowledge, F
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(aa) Any and all funds used by it t
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“Authorized Officer” shall mean
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“Drawdown” shall mean each draw
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“Interest Payment Date” has the
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“Share Pledge Agreement” shall
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(g) The Lenders shall credit the am
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(e) If the Borrower defaults with a
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(iii) concurrently with the deliver
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(j) Maintenance of Property. The Bo
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(ii) To the extent permitted by the
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(ii) date thereof; Liens imposed by
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ARTICLE THIRTEEN. Conditions Preced
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(xxii) neither the execution of the
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(i) Insolvency. (i) If the Borrower
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(b) If as a result of the amendment
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(B) The Chilean Collateral Agent. (
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(iii) Neither the Chilean Collatera
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(h) Effective Term. Unless revoked
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(c) effective. Absent written notic
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This Credit Agreement is executed i
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The Chilean Collateral Agent: HSBC
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(c) If the Central Bank of Mexico s
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Joint and Several Obligations. (a)
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(k) Material Adverse Effect. If the
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Exhibit 4.3 SUMMARY OF THE IRREVOCA
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(6) defend, at its own cost and exp
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(5) the balance remaining after the
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In addition, articles Three, Four a
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(j) deliver, within five (5) days f
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Governing Law and Jurisdiction. Thi
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Servicios Corporativos Doctorgen, S
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Exhibit 12.2 CERTIFICATION I, Juan
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FORM 20-F Grupo Casa Saba, S.A.B. de C.V.

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