2Q18 and

1H18 Results

Conference call

July 27, 2018

9:30 a.m. (Eastern Time)

10:30 a.m. (Brasilia Time)

2

This presentation contains statements that can represent expectations

about future events or results. These statements are based on certain

suppositions and analyses made by the company in accordance with its

experience, with the economic environment and market conditions, and

expected future developments, many of which are beyond the company’s

control. Important factors could lead to significant differences between

real results and the statements on expectations about future events or

results, including the company’s business strategy, Brazilian and

international economic conditions, technology, financial strategy,

developments in the footwear industry, conditions of the financial market,

and uncertainty on the company’s future results from operations, plans,

objectives, expectations and intentions – among other factors. In view of

these aspects, the company’s results could differ significantly from those

indicated or implicit in any statements of expectations about future

events or results.

Disclaimer

3

Basis for the distribution of dividends – 1H18 R$

Net profit for the period 221,862,014.69

( - ) Tax incentives reserve (90,896,778.07)

Legal reserve calculation basis 130,965,236.62

( - ) Legal reserve – 5% (6,548,261.83)

Basis for the dividend for the period up to June 30, 2018 124,416,974.79 1

( - ) 1st interim dividend (90,731,045.64) 1

Balance of dividends payable, 2Q18 33,685,929.15 1

Total dividends proposed by management 33,685,929.15 1

Mandatory dividends (R$124.416.974,79 x 25%) 31,104,243.70

Dividend proposed in addition to the minimum mandatory 93,312,731.09

Sum 124,416,974.79

1 Dividend will be paid “ad referendum” of the Annual General Meeting that will examine the balance sheet and financial

statements for the 2018 fiscal year.

Dividends

4

Dividends

Dividend proposed

DividendDate

approved

Ex-dividend

date

Date of start

of payment

Gross amount

R$

Gross amount

per share R$Net amount R$

Net amount per

share R$

Dividend 1 e 2 Apr. 26, 2018 May 8, 2018 May 23, 2018 90,731,045.64 0.100570903 90,731,045.64 0.100570903

Dividend 1 Jul. 26, 2018 Aug. 7, 2018 Aug. 22, 2018 33,685,929.15 0.037418208 33,685,929.15 0.037418208

Soma 124,416,974.79 0.137989111 124,416,974.79 0.137989111

1 Dividend approved “ad referendum” of the Annual General Meeting that will examine the balance sheet and financial statements

for the 2018 fiscal year.

2 Amount per share adjusted to the split approved at the Extraordinary General Meeting of April 23, 2018.

5

Receita bruta

Consolidada

Domestic market: R$ 416.5 million 0.6%

Exports: R$ 127.9 million 5.0%

Exports: US$ 35.5 million (6.4%)

Lucro líquido

ConsolidadoR$ 65.8 million (28.4%)

EBITR$ 62.2 million 8.7%

Margin 13.9% 0.9 p.p.

Câmbio Positive impact: R$ 13.9 million

VolumeDomestic market: 24.7 million pairs 2.4%

Exports: 8.3 million pairs (10.5%)

Preço médio

Domestic Market R$ 16.86 (1.7%)

ExportsR$ 15.49 17.3%

US$ 4.30 4.6%

Highlights 2Q18 (YOY 2017)

Exchange

Gross revenue

per pair

Net profit

EBIT

Volumes

Gross revenue

6

Gross sales revenue

– Domestic Market (DM) and exports

Analysed by effect of volume, mix and gross revenue per pair

536.0 530.5 544.49.8 (7.5) (12.8) 5.0

13.9

0

100

200

300

400

500

600

Grossrevenue -

2Q17

Volumeeffect - DM

Mix/Grossrevenue perpair effect -

DM

Volumeeffect -Exports

Mix/Grossrevenue perpair effect -

Exports

Grossrevenue

without FXeffect

FX effect -Exports

Grossrevenue -

2Q18

R$

millio

n

Average US dollar: 2Q17 = R$3.2137 / 2Q18 = R$3.6056 - ∆ 12.2%

7

Performance

– Compound average growth rate (CAGR):

R$ million 2Q08 2Q09 2Q10 2Q11 2Q12 2Q13 2Q14 2Q15 2Q16 2Q17 2Q18 CAGR

Gross revenue 286.9 371.7 391.0 307.2 412.6 504.7 488.7 462.1 499.2 536.0 544.4 6.6%

Change Y-o-Y 29.6% 5.2% (21.4%) 34.3% 22.3% (3.2%) (5.4%) 8.0% 7.4% 1.6%

Net profit 42.4 57.3 38.0 36.9 59.5 66.2 72.4 86.8 93.0 92.0 65.8 4.5%

Change Y-o-Y 35.2% (33.7%) (3.1%) 61.4% 11.2% 9.4% 19.8% 7.2% (1.1%) (28.4%)

R$ million 2Q08 2Q09 2Q10 2Q11 2Q12 2Q13 2Q14 2Q15 2Q16 2Q17 2Q18 CAGR

Advertising

expenses19.8 19.8 19.9 20.0 28.5 26.7 26.2 21.3 25.1 25.9 23.8 1.8%

% of net revenue 9.1% 6.7% 6.5% 8.2% 8.6% 6.6% 6.6% 5.6% 6.2% 5.9% 5.3%

8

440.1 446.12.3 6.9 (0.8) 0.4 (2.8)

0

50

100

150

200

250

300

350

400

450

500

Net salesrevenue -

2Q17

Increase ingross revenue

- DM

Increase ingross revenue

- Exports

Reintegra Increase insales returnsand taxes on

sales

Increase indiscountsgranted to

clients

Net salesrevenue -

2Q18

R$ m

illio

n

5.5% 0.6%

Net sales revenue

0.6%

Increase in Exports revenue = R$ 6.1 mn / 5.0%

(35.9%) 14.8%

Increase in deductions from sales = (R$ 2.4 mn) / 2.5%

9

197.9 196.36.0 (2.5) (2.6) (2.5)

0

50

100

150

200

250

Gross profit -2Q17

Increase in netsales revenue

Increase rawmaterials

Increasepersonnel costs

Increase othercosts

Gross profit -2Q18

R$ m

illio

n

Increase COGS = (R$ 7.6 mn) / 3.1%

2.4% 5.5%

Gross profit

1.4% 2.7%

10

EBIT

57.2

62.2

(1.6) 2.1 0.4

4.1

0

10

20

30

40

50

60

70

EBIT - 2Q17 Increase grossprofit

Advertising andpublicity

Operatingexpenses

Other operatingincome /expenses

EBIT - 2Q18

R$ m

illio

n

(8.1%) (0.4%)

Decrease operating expenses = R$ 6.6 mn / (4.7%)

11

Net financial revenue (expenses)(R$ ‘000) 2Q17 2Q18 Change % Change R$

Interest received from clients 670 611 (8.8%) (59)

Revenue from cash investments 44,736 35,810 (20.0%) (8,926)

Other financial revenues 753 1,429 89.8% 676

Subtotal 46,159 37,850 (18.0%) (8,309)

Costs of financings (2,290) (2,957) 29.1% (667)

Cofins and PIS taxes on Financial revenues (2,290) (1,849) (19.3%) 441

Other financial expenses (963) (1,045) 8.5% (82)

Subtotal (5,543) (5,851) 5.6% (308)

Net financial revenues (expenses) (1) 40,616 31,999 (21.2%) (8,617)

Revenue from FX derivatives – BM&FBovespa 1,472 1,607 9.2% 135

Foreign exchange gains 9,941 31,113 213.0% 21,172

Subtotal 11,413 32,720 186.7% 21,307

Op, expenses on FX derivatives – BM&FBovespa (3,194) (30,171) 844.6% (26,977)

Expenses of FX variation (5,707) (26,479) 364.0% (20,772)

Subtotal (8,901) (56,650) 536.4% (47,749)

Net gain (loss) on FX variations (2) 2,512 (23,930) (1,052.6%) (26,442)

Adjustments to present value (APV) 16,186 11,693 (27.8%) (4,493)

Financial result – APV (3) 16,186 11,693 (27.8%) (4,493)

Net financial revenues (expenses) (1) + (2) + (3) 59,314 19,762 (66.7%) (39,552)

12

92.0

65.8

5.0 (39.6)

8.4

0

20

40

60

80

100

120

Net profit - 2Q17 Increase EBIT Net financial result Taxes Net profit - 2Q18

R$ m

illio

n

(66.7%)

Net profit

8.7%

(34.3%)

Decrease Net profit = (R$ 26.2 mn)

13

Receita bruta

Consolidada

Domestic market: R$ 922.6 million 4.3%

Exports: R$ 285.5 million 5.0%

Exports: US$ 83.4 million (2.6%)

Lucro líquido

ConsolidadoR$ 221.9 million (15.9%)

EBITR$ 182.6 million 9.4%

Margin 18.4% 0.8 p.p.

Câmbio Positive impact: R$ 20.5 million

VolumeDomestic Market: 54.2 million pairs 6.2%

Exports: 19.2 million pairs (4.9%)

Preço médio

Domestic market R$ 17.04 (1.8%)

ExportsR$ 14.84 10.4%

US$ 4.33 2.4%

Highlights 1H18 (YOY 2017)

Exchange

Gross revenue

per pair

Net profit

EBIT

Volumes

Gross revenue

14

Gross sales revenue

– Domestic Market (DM) and exports

Analysed by effect of volume, mix and gross revenue per pair

1,156.91,187.6 1,208.155.1 (17.4) (13.3) 6.3 20.5

0

200

400

600

800

1.000

1.200

1.400

Grossrevenue -

1H17

Impactvolume - DM

Mix/Grossrevenue perpair effect -

DM

Impactvolume -Exports

Mix/Grossrevenue perpair effect -

Exports

Grossrevenue

without FXeffect

FX effect -Exports

Grossrevenue -

1H17

R$

millio

n

Average US dollar: 1H17 = R$3.1783 / 1H18 = R$3.4247 - ∆ 7.8%

15

Performance

– Compound average growth rate (CAGR):

R$ million 1H08 1H09 1H10 1H11 1H12 1H13 1H14 1H15 1H16 1H17 1H18 CAGR

Gross revenue 618.2 743.2 847.6 699.3 908.1 1,108.3 1,104.2 1,100.6 1,065.8 1,156.9 1,208.1 6.9%

Change Y-o-Y 20.2% 14.1% (17.5%) 29.8% 22.0% (0.4%) (0.3%) (3.2%) 8.5% 4.4%

Net profit 83.4 121.6 84.9 100.4 141.5 168.5 168.9 223.7 236.6 263.7 221.9 10.3%

Change Y-o-Y 45.8% (30.1%) 18.2% 41.0% 19.1% 0.2% 32.4% 5.8% 11.5% (15.9%)

R$ million 1H08 1H09 1H10 1H11 1H12 1H13 1H14 1H15 1H16 1H17 1H18 CAGR

Advertising

expenses37.2 38.5 38.3 38.7 58.4 59.5 52.5 45.2 47.5 47.0 45.3 2.0%

% of net revenue 7.7% 6.4% 5.6% 6.9% 8.0% 6.7% 5.9% 5.0% 5.4% 4.9% 4.6%

16

950.3991.937.7 25.3 (11.4) (0.4) (6.0) (3.6)

0

200

400

600

800

1.000

1.200

Net salesrevenue -

1H17

Increasegross

revenue -DM

Increasegross

revenue -Exports

Exports taxincentive

Reintegra Increase insales returnsand taxes on

sales

Increase indiscountsgranted to

clients

Net salesrevenue -

1H18

R$ m

illio

n

9.9% 3.6%

Net sales revenue

4.3%

Increase export revenue = R$ 13.5 mn / 5.0%

(8.9%) 8.4%

Increase deduction from sales = (R$ 9.6 mn) / 4.6%

17

445.0 455.541.7 (9.0) (11.9) (10.3)

0

100

200

300

400

500

600

Gross profit -1H17

Increase in netsales revenue

Increase rawmaterials

Increasepersonnel costs

Increase othercosts

Gross profit -1H18

R$ m

illio

n

Increase COGS = (R$ 31.2 mn) / 6.2%

4.1% 11.4%

Gross profit

4.4% 6.0%

18

EBIT

166.9

182.610.5 1.7 (5.4) 8.9

0

20

40

60

80

100

120

140

160

180

200

EBIT - 1H17 Increase grossprofit

Advertising andpublicity

Operatingexpenses

Other operatingincome /expenses

EBIT - 1H18

R$ m

illio

n

(3.6%) 2.4%

Decrease operating expenses = R$ 5.2 mn / (1.9%)

19

Net financial revenue (expenses)(R$ ‘000) 1H17 1H18 Change % Change R$

Interest received from clients 1,113 1,120 0.6% 7

Revenue from cash investments 96,800 69,667 (28.0%) (27,133)

Other financial revenues 1,779 3,301 85.6% 1,522

Subtotal 99,692 74,088 (25.7%) (25,604)

Costs of financings (5,143) (5,342) 3.9% (199)

Cofins and PIS taxes on Financial revenues (4,814) (3,582) (25.6%) 1,232

Other financial expenses (1,928) (2,076) 7.7% (148)

Subtotal (11,885) (11,000) (7.4%) 885

Net financial revenues (expenses) (1) 87,807 63,088 (28.2%) (24,719)

Revenue from FX derivatives – BM&FBovespa 16,782 10,740 (36.0%) (6,042)

Foreign exchange gains 18,769 48,285 157.3% 29,516

Subtotal 35,551 59,025 66.0% 23,474

Op, expenses on FX derivatives – BM&FBovespa (6,848) (34,036) 397.0% (27,188)

Expenses of FX variation (16,443) (44,064) 168.0% (27,621)

Subtotal (23,291) (78,100) 235.3% (54,809)

Net gain (loss) on FX variations (2) 12,260 (19,075) (255.6%) (31,335)

Adjustments to present value (APV) 36,427 28,353 (22.2%) (8,074)

Financial result – APV (3) 36,427 28,353 (22.2%) (8,074)

Net financial revenues (expenses) (1) + (2) + (3) 136,494 72,366 (47.0%) (64,128)

20

263.7

221.9

15.7 (64.1)

6.6

0

50

100

150

200

250

300

Net profit - 1H17 Increase EBIT Net financial result Taxes Net profit - 1H18

R$ m

illio

n

(47.0%)

Net profit

9.4%

(16.4%)

Decrease net profit = (R$ 41.8 mn)

21

Thank You!