2. Disclaimer
Statements regarding the Company’s future business perspectives and projections of operational and
financial results are merely estimates and projections, and as such they are subject to different risks and
uncertainties, including, but not limited to, market conditions, domestic and foreign performance in general
and in the Company’s line of business.
These risks and uncertainties cannot be controlled or sufficiently predicted by the Company management
and may significantly affect its perspectives, estimates, and projections. Statements on future
perspectives, estimates, and projections do not represent and should not be construed as a guarantee of
performance. The operational information contained herein, as well as information not directly derived from
the financial statements, have not been subject to a special review by the Company’s independent
auditors and may involve premises and estimates adopted by the management.
2
4. 1
.1 Platform of brands of reference
Arezzo&Co is the leading Company in the footwear and
accessories sector through its platform of Top of Mind brands
4
5. 1
.2 Company overview
Arezzo&Co is the reference in the Brazilian retail sector and has
a unique positioning combining growth with high cash
generation
Leading company in Controlling Development of Asset light: high Strong cash
the footwear and shareholders are the collections with operational efficiency generation and high
accessories sector reference in the sector efficient supply chain growth
with presence in all
Brazilian states
7.8 million pairs of shoes(1) Net revenues CAGR:
~11,500 models created 29.3% (2007- 1Q12)
86% outsourced production
39 years of experience in per year
499 thousand handbags(1)
the sector
ROIC of 32.5% in 1Q12 Net income CAGR: 38.2%
Lead time of 40 days (2007- 1Q12)
c.2,515 points of sale
Wide recognition
1,952 employees
7 to 9 launches per year Increased operating
11.1% market share(2)
leverage
Notes:
1. LTM as of March, 2012.
2. Refers to the Brazilian women footwear market (source: Euromonitor, IBGE and Company estimates) . Estimated for 2010.
5
6. 1
.3 Successful track record of
entrepreneurship
The right changes at the right time accelerated the Company's
development
Foundation and structuring Industrial Era Retail Era Corporate Era Industry Reference
70’s 80’s 90’s 00’s 2012
Founded in 1972 Consolidation of Focus on retail Specific brands for each
Focused on brand and industrial business model R&D and production segment
product located in Minas Gerais outsourcing on Vale dos Sinos - Expansion of distribution
1.5 mm pairs per year RS channels
and 2,000 employees Franchises expansion Efficient supply chain
Launch of new
brands Consolidate
Opening of the first Opening of the flagship leadership
shoe factory store at Oscar Freire
position
+ Merger
First store
Schutz launch Strategic Partnership
(November 2007)
Launch of the first Commercial operations
design with centralized in São Paulo
national success
Fast Fashion
concept Initial Public Offering
(February 2011)
7. .4 Shareholder structure1
1
Post-offering
Birman family Management Others
52.6% 0.2% 47.1%
Notes:
1. Arezzo&Co capital stock is composed of 88,542,410 common shares, all nominative, book-entry shares with no par value.
Shareholder structure as of March, 2012.
7
8. 1
.5 Culture & Management:
Arezzo towards 2154
Meritocratic culture based on best practices makes Arezzo a
company prepared to reach 2154
Code of Ethics
“Our behavior is a positive example for all activities and internal or external interactions; and we treat everyone with respect, equality and cooperation”
“We properly protect the confidentiality of our information, documents, trademarks, intellectual property and cherish the proper use of our assets”
“The Arezzo Group’s interests prevail over personal or third party interests and guide any decision-making in the company”
“We act with fairness in our relationships with suppliers, franchisees and customers, eliminating any situation that may generate expectations of bias in
the context of receipt of gifts and invitations”
“Our suppliers are evaluated and contracted based on clear criteria and in line with our ethical standards and conduct”
“We are committed to ensure a responsible environmental stewardship by ensuring and establishing high standards for the purposes of protecting the
environment and conserving its resources”
“We have a socially responsible conduct and do not use any resources for unethical or illegal purposes, or that violates local or international laws”
“It is our duty to report any breach of the Code of Ethics irrespective of the public involved”
2010
2154
8
9. 1
.6 Strong platform of brands
Strong platform of brands, aimed at specific target markets, enables the
Company to capture growth from different income segments
Foundation 1972 1995 2008 2009
Trendy Fashion Pop Design
Brands New Up to date Flat shoes Exclusivity
profile Easy to wear Bold Affordable Identity
Eclectic Provocative Colorful Seduction
Female
target 16 - 60 years old 18 - 40 years old 12 - 60 years old 20 - 45 years old
market
O F MB EX O F MB EX O MB O MB EX
Distribution
POS 1
channel1
18 290 877 - 19 2 1,509 - 8 783 1 18 -
%
gross 14% 73% 12% 1% 26% 1% 65% 8% 41% 59% 14% 7% 79%
rev.2
Retail price
R$ 180.00/pair R$ 285.00/pair R$ 99.00/pair R$ 960.00/pair
point
Sales R$ 23.9 million
R$ 589.1 million R$ 249.8 million R$ 8.3 million
Volume3
% Gross 2.7%
65,7% 27.8% 0.9%
Revenues4
Notes:
1. Points of sales (1Q12 LTM); O = Owned Stores; F = Franchised Stores; MB = Multi-brand Stores; EX = Exports
2. % of each brand gross revenues (2011 LTM)
3. (1Q12 LTM) gross revenues, does not include other revenues (not generated by the 4 brands)
4. % total (1Q12 LTM) gross revenues
9
10. 1
.7 Multiple distribution channels
Flexible platform through three distribution channels with
differentiated strategies, maximizing the Company's profitability
Gross Revenues per Channel
Reach about
292 franchises in 46 owned stores Broad distribution
1.200 cities and
more than 160 being 5 Flagship in every Brazilian
2,500 multi-
cities stores state
brands
Gross Revenue Breakdown – (R$ mn)¹
48% 27% 19% 6% 100%
56²
170
242
897
429
Franchises Multi-brands Owned stores Others Total
Notes:
1. (1Q12 LTM) gross revenues
2. Considers external market and other revenues in the domestic market
10
12. 2
Unique business model in Brazil
Customer focus: we are at the forefront of
Brazilian women fashion and design
1
ABILITY TO
2
SOLID MARKETING
3
EFFICIENT
4
NATIONWIDE
5
SEASONED
DISTRIBUTION MANAGEMENT
INNOVATE AND SUPPLY CHAIN TEAM WITH
STRATEGY
COMMUNICATION PERFORMANCE
PROGRAM BASED INCENTIVES
Communication &
R&D Sourcing & Logistics Multi-channel Management
Marketing
BRANDS OF REFERENCE
12
13. 2
.1 Ability to Innovate
We produce 7 to 9 collections per year
I. Research II. Development III. Sourcing IV. Delivery
Creation:
11,500 SKUs / year
Available for selection:
63% of SKUs created /
year
Stores:
52% of SKUs created / year
Activities JAN FEV MAR APR MAY JUN JUL AUG SEP OCT NOV DEC
Creation
Launch
Orders
Production
Delivery
Normal sale
Discount sale
Winter I Winter II Winter III Summer I Summer II Summer III Summer IV
Arezzo&Co fulfills the various aspirations of women, delivering on average 5 new
models per day, allowing for consistent desire-driven purchases 13
14. 2
.2 Broad media plan
The brand has an integrated and expressive communication strategy, from the
creation of campaigns to the point of sales
Presence in eletronic media and television Strong presence in printed media
+1000 exhibition on TV e 620 exhibition in cinema in 2011 150 inserts in printed media in 300 pages in 2011 (45 million readers)
+ 40 million impact 78 exhibition in fashion editorials in 1Q12
Digital communication Celebrity Endorsement Marketing Events
549k accesses to site/month 115 k Facebook fans: leader in Demi Moore Gisele Bündchen Blake Lively CRM – VIP sales
Average navigation time: 8 minutes interactions Seasonal showroom in Los Angeles near the In-store events – PA
51 k Twitter followers : category leader 30 k monthly access to Schutz‟s Blog Red Carpet Stylists Fashion Advisors
Season
14
15. 2
.2 Communication & marketing program
reflected in every aspect of the stores
Stores constantly modified to incorporate the concept of each new
collection, creating desire-driven purchases
POS materials (catalogs, packaging, among others)
Store layout & visual merchandising Flagship stores
All visual communication at stores is monitored and updated simultaneously throughout Brazil
for each new collection 15
16. 2
.2 Atmosphere of stores: differentiated
concepts for each brand
Niches and lighting
Summer – Flagship Oscar Freire Wall display Each theme is disposed in different niches
Chameleon project: constant
modification to incorporate the new
collection’s concept
Closet Essential
Sophisticated lighting
Combos
Winter – Flagship Oscar Freire Video Wall Acessories Storage Distinguished storefront Special collections
Visual merchandising:
Updates at low cost investment Jaquets and accessories Exposure of a large variety of Atmosphere of a jewelry store
Brings relevant information from Campaigns and marketing actions products Private shop experience
each collection to stores’ level Preeminence for products Selling area inventory: lower Focus on exclusivity, design and
3 main updates per year Differentiated products necessity of area for storage highly selected materials
16
17. .3 Flexible production process…
2 Production speed, flexibility and scalability to ensure Arezzo&Co‟s
expected growth based on asset light model
Sourcing Model Gains of scale
Owned factory with capacity to produce 1.2 million pairs
annually and strong relationship with Vale dos Sinos Arezzo’s size allows for large scale purchases from each
production cluster as the outsourcing represents 86% of total supplier
production
Certification and auditing of suppliers Joint purchases
In-house certification and auditing ensure quality and
Negotiation of raw material jointly with local suppliers
punctuality (ISO 9001 certification in 2008)
New Distribution Center Consolidation and improvement of distribution in national
scale
1 Reception: 100,000 units / day
2 Storage: 100,000 units / day
3 Picking: 150,000 units / day
4 Distribution: 200,000 units / day
5 Replacement of milky run strategy
17
18. .4 ...leveraged by owned stores…
2 Capturing value from the chain while developing retail know how and
brands‟ visibility
Flagship Stores Greater brand awareness coupled with operational efficiencies
Clustering higher productivity stores in main areas (mainly SP and RJ) improving
operational efficiency and profitability:
Franchise Owned
R$ 3,292 M
Annual Average
Sales per Store
2011 R$ 5,249 M
Direct costumers interaction develops retail competences which are also reflected
Arezzo – Ipanema / RJ at franchised stores
Arezzo – Cid. Jardim / SP Flagship stores ensure greater visibility and reinforce brand image
Total sales area and # of stores (sq m)
45 46
4,686 4,754
29
21 20% 20% Flagship
Standard Store
2,967
10 # stores
6 2,067 23%
1,369 19% 80% 80%
1,044 9%
12% 77%
81%
Schutz – Iguatemi / SP 88% 91%
Schutz – Oscar Freire / SP 2007 2008 2009 2010 2011 1Q12
18
19. .4 …with efficient management of the
2 franchise network...
Model allows rapid expansion with little invested capital by
Arezzo&Co and high profitability to franchisees
Successful Partnership: “Win – Win” Franchise Concentration per Operator
Intense retail training (# of Franchisees by # of Franchises)
Ongoing support: average of 6 stores/ consultant and
average of 22 visits per store/ year 4 or more
franchises
Strong relationship with and ongoing support to franchisee
IT integration with our franchises amount to more than 80%
As mono-brand stores, franchises reinforce the branding in 10%
3 franchises
each city they are located 16% 1 franchise
46%
Best Franchise in Brazil (2005) and in the sector for 7 28%
years since 2004
Excellency in Franchising Award in the last 8 years (ABF) 2 franchises
96% satisfaction of franchises1
Notes: FY2011 data
100% of on-time payments 1. 96% of the current franchisees indicated they would be interested in opening a
franchise if they did not already have one
Average payback of 39 months2 2. Annual sales of R$ 2,330 thousand + average initial investment of R$ 600 thousand
+ working capital of R$ 414 thousand
19
20. 2
.4 ...and of the multi-brand stores
Multi-brand stores widen the distribution capillarity and the brands‟
visibility, resulting in a strong retail footprint
Multi-brand stores‟ Gross Revenue¹ (R$ mn) Improved distribution and brand visibility
2,177 Greater brand capillarity
1,782 Presence in over 960 cities
# Store
Main Focus: share of wallet
Gross Revenue1
(R$ mn)
Owner’s loyalty
188 234 Rapid expansion at low investment and risk
56 Important sales channel for smaller cities
47
Sales team optimization: internal team and commissioned
2010 2011 1Q11 1Q12 sales representatives
Multi-brand stores
Notes:
1. Domestic market only 20
21. 2
.4 Large capillarity and scale of store
chain
Mono-brand store chain with high capillarity, reaching more than 160
cities and well-positioned among the retail companies
Points of sale (1Q12)
Size and average sales per mono-brand stores - 2011
290 franchises +
Brand
Average size Net Revenue/ m2 Total GDP³: 5% 18 owned stores +
(m2) (R$ 000s) Stores 1,2 A&C¹: 4%
4 outlets +
5 61 354 328 877 multi-brand clients
133 244 432 GDP³: 18%
A&C¹: 17%
1,904 9 167
2 franchises +
1,031 7 336
19 owned stores +
2.513 8 145 1 outlet +
263 17 104 1,509 multi-brand clients
Points of sale – average size : new stores are increasing
GDP³: 7% 8 owned stores
network average size A&C¹: 7% GDP³: 55%
A&C¹: 57% 783 multi-brand clients
85 80 GDP³: 15% 1 owned store +
57 sq m sq m A&C¹: 15% 18 multi-brand clients
sq m
TOTAL
2010 2011 new stores 2012 new stores 292 franchises +
Source: IBGE, Companies’ Reports; number of stores according to latest data provided by the Companies 40 owned stores +
Notes:
1. Considers only monobrand stores of Arezzo and Schutz; 6 outlets +
2. For Hering, considers only Hering Store chain stores;
3. 2008 data; 2.177 multi-brand clients
4. Net Revenue (assuming that sales taxes and deduction = 30% of gross revenues);
5. Considers Arezzo + Schutz, except for outlets, handbags’ stores and Schutz franchise; = 2,515 points of sales 21
22. 2
.5 Seasoned and professional
management team
Anderson Birman
Internal Auditing
Marco Coelho
Schutz and Alexandre
Arezzo and Ana Capri Industrial Supply Chain Strategy and IT Financial HR
Birman
Anderson Birman
Alexandre Birman Cisso Klaus Marcio Jung Kurt Richter Thiago Borges Raquel Carneiro
Claudia Narciso
Highly qualified management team
Name Years of Years
Title experience at Arezzo
Anderson Birman
39 39 Stock option plan for key executives
CEO
Alexandre Birman
COO
16 16 Performance based compensation package for all
Thiago Borges
employees
12 4
CFO and Investor Relations Officer
Cisso Klaus
46 8
Independent business units for each brand but unified
Director – Industrial officers (Industrial, Logistics, Financial and HR) for the
Claudia Narciso
23 13
whole company
Director – R&D
Kurt Ritchter 31 10
Director – Strategy and IT
Marcio Jung
27 7
Director – Supply Chain
Marco Coelho
40 29
Director – Internal Auditing
Raquel Carneiro
12 2
Director – HR 22
23. 2
.6 Corporate governance
Board is composed by 8 members being 4 appointed by controlling shareholders
Board of directors
Name Experience Name Experience
Title Title
Tarpon’s partner since 2003, member of the Board of Directors of
Anderson Birman Arezzo’s CEO since its foundation, with over 39 years of Pedro Faria Direcional Engenharia, Omega Energia Renovável, Cremer and
Chairman of the Board experience in the industry Board Member Comgás
Alexandre Birman Arezzo’s COO and founder of Schutz, with 16 years of Eduardo Mufarej Tarpon’s partner since 2004, member of the Board of Directors of
Vice-Chairman of the Board experience in the industry Board Member Tarpon, Omega Energia Renovável and Coteminas
Founder and CEO of “Ethos Desenvolvimento Humano e
José Murilo Carvalho President of the Attorney’s Association of Minas Gerais, José Bolonha
Organizacional“; Board member of the Inter-American Economic
Board Member Board Member of the Brazilian Bar Association Board Member and Social Council (UN, WHO)
CEO of Bahema Participações, board member of Pão de CEO of Grupo Boticário (largest franchise company in Brazil) and
Guilherme A. Ferreira Açúcar, Banco Signatura Lazard, Eternit, Tavex and Rio
Artur N. Grynbaum
Vice-President at Abihpec (Brazilian Association of Industries in the
Independent Board Member Bravo Investimentos Independent Board Member
field of Personal Hygiene, Perfumes, and Cosmetics )
Committees
Audit Committee Strategy Committee People Committee
Ana Luiza Franco* (Coordinator) Pedro Faria (Coordinator) José Bolonha (Coordinator)
Members: Members:
Members:
Anderson Birman, Alexandre Birman, Guilherme A. Pedro Faria and Alexandre Birman
Jose Murilo and Guilherme A. Ferreira
Ferreira and Arthur N. Grynbaum
*Mrs Franco is former partner at Machado Meyer Law firm in Brazil
and currently acts as member for corporate risk and audit
committees in various relevant companies in the country. 23
25. 3
.1 Social upward mobility driving internal
consumption
Income growth and job creation lead to rapid social upward mobility and
increasing internal consumption
Brazil experiences an accelerated process of social upward migration...
(Millions of people)
Class A/B 13 (8%) 20 (11%) 31 (16%) +18 mi
(2003-14E)
Class C 66 (37%)
93 (49%) +47 mi
113 (56%) (2003-14E)
Class D 47 (27%)
46 (24%)
40 (20%)
Class E 49 (28%)
30 (16%) 16 (8%)
2003 2008 2014E
Classes A/B: monthly income above R$4,808 | Class C: monthly income between R$1,115 and R$4,408 | Class D: monthly income between R$768 and R$1,115 | Class E: monthly income below R$768
...Resulting in a significant rise of consumer goods consumption, including Footwear and Apparel
(Consumption growth as a result of the upward mobility in social classes; indexed 100 = class D/E)
Food, Drinks and
1.0x 1.7x 3.3x 5.4x
Cigarettes
Electronics
1.0x Class 1.9x Class 4.4x Class 10.1x Class
and Furniture Footwear and
D/E C B A apparel have
Footwear and
1.0x 2.3x 5.4x 12.6x the largest
Apparel
growth
Prescription/OTC drugs 1.0x 1.9x 4.3x 9.3x potential
Hygiene and
1.0x 2.3x 5.3x 11.2x
Personal Care
25
Source: IBGE, FGV, LCA, Bain & Co., BCG, Roland Berger
26. 3
.2 Brazilian footwear market overview
Arezzo&Co has a significant stake of the the women footwear market
and has consistently increased its market share
Footwear consumption (2009) Arezzo&Co‟s market share1
Others
11.1%
Kids 4%
13% 8.6%
8.1%
37%
Sports
Men 17%
4.7%
2007 2008 2009 2010
Women 29% Footwear market (R$ bn)
footwear
+8%
+4% +6%
Income Class
Class A
Class D/E 17%
6% 35.4
32.9
29.7 31.0
33% 44%
9.0 9.5 10.3
8.6
Class B
Class C
2007 2008 2009 2010
Total footwear Women footwear
Source: IBOPE Inteligência (Pyxis), Satra, World Bank, ABICALÇADOS, IEMI, MTE, MDIC, / SECEX, IBGE
Note: 1. Based on Euromonitor research and IBOPE Inteligência (Pyxis). Estimated market share, which includes both Arezzo and Schutz 26
27. 3
.3 Global Industry
Brazil is a major shoe producer with a competitive cost of women leather
shoes for the domestic market
CHINA
Lead time: 120 to 150 days
Production (pairs): 10.000 mi
ITALY
Cost (FOB): US$ 16/pair
Lead time: 70 days
Cost (DDP): US$ 40/pair
Production (pairs): 202 mi
Cost (FOB): US$ 26/pair
Cost (DDP): US$ 38/pair INDIA
Lead time: 160 days
Production (pairs): 2.000 mi
Cost (FOB): US$ 15/pair
Cost (DDP): US$ 23/pair
VIETNA
Lead time: 120 to 150 days
Production (pairs): 682 mi
Cost (FOB): US$ 15/pair
Cost (DDP): US$ 23/pair
BRAZIL
Lead time: 40 days
Production (pairs): 894 mi
Cost (without taxes ): US$
19/pair
Cost (w/ taxes ): US$ 29/pair
Note:
DDP: delivered duty paid
Source: Abilcalçados, Assintecal, Arezzo&Co FOB: free on board
27
28. 3
.4 Brazilian footwear industry Overview
Arezzo&Co mainly sources its products in the South of Brazil, the world‟s
largest footwear manufacturer cluster, specialized in women leather shoes
Brazilian Shoes Production (2010)
Vale dos
South
894 South Region Region
Sinos
(RS)
million
Production - # pairs (million) 302 ~187
pairs
Export - # pairs (million) 32 ~20
Export - (million USD) 733 ~455
Jobs (thousand) 130 ~81
Other Main producer Companies 3.400 ~2.000
66 States
7% Sports Expertise in the production of women leather shoes
88
10%
Other producer regions:
Rubber
487 Southeast Northeast
Southeast Region Northeast Region
55% Region Region
Leather
253
Production - # pairs (million) 189 Production - # pairs (million) 399
28%
Export - # pairs (million) 9 Export - # pairs (million) 102
Export - (million USD) 152 Export - (million USD) 595
Jobs (thousand) 90 Jobs (thousand) 126
Companies 4.000 Companies 627
Source: Abilcalçados, Assintecal, Arezzo&Co
Expertise in the production of men leather shoes Expertise in the production of sports shoes
28
30. 4
.1 Solid growth fundamentals
Key drivers of growth
Store openings in 2011 – 38 out of 38
Expand distribution footprint Store openings in 2012E – increase from 40 to 58
Same store expansion in 2011 and 2012 – 615 out of 1000 sq m already expanded
Store remodeling: Schutz new store format significantly improving sales productivity
Store productivity increase
Same store sales of 11,4% (sell out - owned stores) and 11,3% (sell in – franchises)
and additional upsides
IT integration between our franchises: about 80% of our stores network in the same platform
Gross margin expansion: 100bps in 2011
Increase operational
Ebitda margin expansion: 60bps in 2011
efficiencies and margins
Net income CAGR reached 47% (2005-2011) and net margin rose by 7p.p. in the same period
Revenue growth post-expansion SG&A as % of Net Revenue and Gross Margin
40.5% 40.5% 41.5%
99%¹
AFTER 37.7%
BEFORE
27.0%
70m2 26.2%
24.3%
24.7%
34m2
Store area
¹ Comparison between the sales of Schutz store at Morumbi Shopping: 2008 2009 2010 2011
Results from August/10 to March/11 and August/11 to March/12
Gross margin SG&A (% of net revenue)
30
31. .2 What‟s new for 2012
4
Key drivers of growth
Opening of 58 stores in 2012:
• 11 owned stores
Expanding Footprint • 47 franchises
Webcommerce: Schutz and Anacapri started marketing a wide range of models to Brazil
Brand assessment:
GTM Arezzo • Reevaluation of Arezzo’s current distribution and supply model in Brazil
• Solid planning of brand growth for the next years
Anacapri Gross
Consistent sales growth since 2010 Revenue
Anacapri (R$ million)
Focus on new store format 21,6
Consolidation 4,1
Widening distribution platform for franchises 2,6 1,9
2010 2011 1Q11 1Q12
Alexandre Birman Concentration on brand’s strengthening
Internationalization
Structuring brand’s internationalization out of NY
31
34. 5
.2 Operational and financial highlights
Key highlights
1Q12 Net Revenue decreased by 16.4% year-over-year
1Q12 ended with 338 store chain and Sales area expansion of 23% year-over-year
Strong Gross Revenue growth, especially in the Schutz brand that increased by 36.7% in 1Q12 comparing to 1Q11
Net Revenues (R$ mn) Number of Stores (R$ mn) and Total Area (sq m - „000)
CAGR 07-11: 36.8% Area CAGR 07- 11: 16.3%
678.9 23.2% 21.9%
21,6
571.5 17.7% 21.4
17.6 12.5% 17.6
412.1 13.2%
367.1 18.8% 13.3 14.9
38.7%
338 11.7 334
296 296
+42 263 +38
46 237 +33 29 45
193.8 12.3% 29 214 +26 21
-26.3% 6 +23 10
89.4% 267 292 242 267 289
14.7 10.9 208 227
1Q11 1Q12 2007 2008 2009 2010 2011 1Q11 1Q12 2007 2008 2009 2010 2011
Owned Stores Franchises Total Area
34
35. 5
.3 Operational and financial highlights
Gross Profit (R$ mn) and Gross Margin (%) Adjusted¹ EBITDA (R$ mn) and EBITDA Margin (%)
40.7% 41.6% 40.5% 40.5% 41.5% 17.3%
16.7%
281.4 15.0%
14.0% 14.7% 117.7
231.6
95.5
166.8
60.5
56.4 67.2 22.7
20.7
8.0
14.7
1Q11 1Q12 2009 2010 2011 1Q11 1Q12 2009 2010 2011
Adjusted¹ Net Income (R$ mn) and Net Margin (%)
16.1
13.5%
11.8%
11.3% 91.6
10.6%
10.0%
64.5
48.7
16.1
14.7
5.3
10.9
Notes:
1Q11 1Q12 2009 2010 2011 1. Adjusted by R$ 8.0 million non-recurring expense related to the termination of
the commercial agreement entered into with the former supply agent
35
36. 5
.4 Operational and financial highlights
Cash Conversion Cycle (R$ thousand) Capex (R$ million)
1Q11 1Q12 Change Growth or Growth or
Cash Conversion Cycle Sumary of investments 1Q11 1Q12 2010 2011
#days (R$'000) #days (R$'000) (in days) spread (%) spread (%)
106 164,520 99 183,568 -7 Total Capex 3,738 17,337 363.8% 15,513 30,239 94.9%
Inventory¹ 66 64,585 59 66,099 -7 Stores - expansion and reforming 2,206 13,578 515.5% 8,018 23,352 191.2%
Accounts Receivable² 92 150,836 90 173,595 -2 Corporate 1,313 3,553 170.6% 5,772 6,082 5.4%
Others 219 206 -5.9% 1,723 805 -53.3%
(-) Accounts Payable¹ 52 50,901 50 56,126 -2
¹ Days of COGs
² Days of Net Revenues
Cash Flows From Operating Activities (R$ thousand)
Growth or Growth or
Cash flows from operating activies 1Q11 1Q12 2010 2011
spread spread
Income before income taxes 21,321 15,636 (5,685) 89,289 125,452 36,163
Depreciation and amortization 879 1,417 538 2,670 4,058 1,388
Others (1,868) (4,129) (2,261) 1,735 (10,475) (12,210)
Decrease (increase) in current assets / liabilities (12,068) 9,975 22,043 (48,404) (47,302) 1,102
-
Trade accounts reveivable (18,366) 5,994 24,360 (29,170) (47,118) (17,948)
Inventories (15,723) (8,579) 7,144 (27,657) (8,518) 19,139
Suppliers 22,157 18,840 (3,317) (330) 8,542 8,872
Change in other current assets and liabilities (136) (6,280) (6,144) 8,753 (208) (8,961)
Change in other non current assets and liabilities (263) (700) (437) (291) (147) 144
Tax and contributions (2,366) - 2,366 (24,542) (28,548) (4,006)
Net cash generated by operating activities 5,635 22,199 16,564 20,457 43,038 22,581
36
37. 5
.4 Operational and financial highlights
Indebtedness (R$ thousand)
Indebtedness 1Q11 4Q11 1Q12
Indebtedness totaled R$30.8 million in 1Q12 versus
R$38.7 million in 4Q11
Cash 187,293 173,550 166,741
Total indebtedness 33,586 38,659 30,844
Short term 12,813 20,885 14,059
Long-term debt relevance stood at 54.4% in 1Q12 versus As % of total debt 38.1% 54.0% 45.6%
46.0% in 4Q11
Long term 20,773 17,774 16,785
As % of total debt 61.9% 46.0% 54.4%
Net debt (153,707) (134,891) (135,897)
Indebtedness policy remained conservative, with low
weighted-average cost of Company's total debt EBITDA LTM 98,930 117,729 111,662
Net debt /EBITDA LTM -1.6x -1.1x -1.2x
37
