Business

Genomma Lab Strategizes to Hone Focus on Key Brands with Asset Divestiture

MEXICO CITY, May 6, 2024 – Genomma Lab Internacional, S.A.B. de C.V. (BMV: LABB) ("Genomma Lab" or "the Company"), recognized as a leading entity in the pharmaceutical and personal care product sectors within Mexico and increasingly acknowledged globally, has announced an update on its strategic move to streamline operations by shedding "non-core" assets. This pivot is designed to bolster the company's focus on its mainline brands and businesses, fortifying its market position.

Gibart, S.A. de C.V., a full-fledged subsidiary owned by Genomma Lab, is at present in possession of a minority equity interest in Grupo Comercial e Industrial Marzam, S.A.P.I de C.V. ("Marzam"), which the company categorizes as a "non-core" asset.

For several months, Marzam has been the recipient of acquisition proposals for a majority share ownership by external corporate entities. These proposals have come from a reputable international group and one of the preeminent logistics companies within Mexico's domestic borders. However, these propositions were met with indifference by the primary shareholder of Marzam, Moënch Cooperatief, U.A.

In a monumental development, Mr. Luis Doporto Alejandre has executed a definitive contract confirming his commitment to a significant capital contribution to Marzam. This financial boost aims to consolidate Marzam's foothold within the wholesale pharmaceutical distribution sphere and to leverage emerging market prospects.

In conjunction with the agreement, Gibart has given its consent for the capital infusion into Marzam and anticipates reducing its shareholding subsequent to the fulfillment of the stipulated prerequisites. This decisive step is in line with Genomma Lab's wider strategic vision to offload select "non-core" assets, thereby allowing it to sharpen its concentration on the company's foundational goals and business growth.

The fruition of this arrangement is dependent on the satisfaction of standard procedural conditions. Upon the realization of these conditions, Gibart will relinquish its status as a shareholder within Marzam, effectively marking a new chapter in the company's history.

Furthermore, Gibart has explicitly reserved all rights to enforce them to secure full payment with respect to this transaction, ensuring its interests are protected till the very end of the process.

About Genomma Lab Internacional

Genomma Lab Internacional, S.A.B. de C.V. stands out as one of the most dynamically growing companies within the pharmaceutical and personal care product industries across Latin America. Commanding respect through its vast portfolio of premium brands, Genomma Lab not only sells but also develops and markets an extensive range of products. Notably, numerous brands in their repertoire have attained leadership status regarding sales and market share.

Genomma Lab is powered by a robust business methodology that synergizes a novel product development process, consumer-centric marketing strategies, widespread retail distribution networks, coupled with an operating model for their supply chain that emphasizes low costs and impressive flexibility. For additional insights, the public is encouraged to visit www.genommalab.com.

The company's financial instruments are traded publicly on the Mexican Stock Exchange and can be located using the ticker symbol "LABB" (Bloomberg: LABB:MM).

Safe Harbor Statement: Caution Regarding Forward-Looking Statements

This report may consist of certain forward-looking declarations candidly reflecting the company's management perspective regarding its expected performance and prospective undertakings. Forward-looking utterances, fundamentally prospective in nature, often embody words such as "believe," "foresee," "presume," or similar terminology; these predict or suggest future outcomes or strategies and are susceptible to risks, assumptions, and uncertainties.

Readers are advised to exercise caution and not to place undue faith in these forward-looking statements, which are inherently speculative and encased solely within the context and date of their articulation. It is pertinent to acknowledge that actual results could dramatically differ from those posited by these forward-looking claims.

A Spectrum of Risk Factors and Uncertainties

Delineated risks and sources of uncertainty encompass, but are not isolated to, the overarching impact of the COVID-19 pandemic—its spread, duration, governmental measures, delay incurred, disruptions within the supply chain, and the effect on the company's capacity to sustain business continuity plans amidst the public health crisis.

Economic fluctuations also pose a challenge, such as currency exchange rate variations and interest rate shifts. The competitive landscape can be exacting, given technological progress and new, sophisticated products introduced by competitors. The intricate process of developing fresh products, the execution of strategic company maneuvers, business amalgamations, and asset divestments all introduce potential sources of difficulty.

Manufacturing challenges, potential for delay, either internal to the company or widespread across the supply chain, considerable adverse litigation or regulatory action, and unfolding changes in relevant laws and regulations—including taxation—all can exert substantial influence on the company's operational viability and prospects.

Equally impactful are shifts in consumer spending and behaviour patterns, along with the instability of global economies, the precariousness of legal systems, and the sovereign risk they embody.

A comprehensive listing and elaboration of these risks, uncertainties, and factors can be located in the company's filings with the Bolsa Mexicana de Valores, which is accessible for a more thorough examination by stakeholders and interested parties.

In conclusion, any prospective predictions made within this announcement are valid solely as of the release date. Genomma Lab firmly commits not to update or reassess these forward-looking statements, barring the emergence of new information, unforeseen future events, or any other significant developments.

Genomma Lab Internacional, S.A.B. de C.V. concludes the report with a reminder of the source of this update, attributing the foundational information and ensuing analysis to the expertise and resources of the company at large.

With the increasing global interdependence and the rapid evolution of the healthcare sector, this recent move by Genomma Lab serves to underscore the company's commitment to strategic growth and adaptability to changing market circumstances. By choosing to concentrate on their core offerings and streamline their portfolio, Genomma Lab is positioning itself for future success, ensuring it can effectively respond to both consumer demand and industry challenges with agility and resilience.

This strategic divestiture initiative demonstrates Genomma Lab's clear-eyed recognition of the need to simplify its operations to continue thriving in a competitive market. As the company refocuses its energies and investments on the brands and products that form the cornerstone of its business, we can expect to see a more efficient and targeted approach to market domination within its sector, both nationally and in the broader international arena.

The company has not only cast a decisive vision towards future growth but also revealed its determination to navigate the intricacies of market dynamics with precision and considered actions. The anticipated consolidation of Marzam under the aegis of capital infusion led by Mr. Luis Doporto Alejandre marks a milestone in the company's trajectory and promises robust strides in the pharmaceutical distribution industry.

In conclusion, these recent developments reflect Genomma Lab's strategic focus and adaptability, which are crucial to sustaining its growth and leadership in the fiercely competitive pharmaceutical and personal care industries. By divesting non-core assets and reinforcing its flagship brands, Genomma Lab is forging a path toward a more streamlined and potent market presence, underpinned by operational excellence and a commitment to innovation.