15th Annual Latin America Conference – Citigroup

New York - March 28 – 29, 20074th quarter and 2006 earnings

Footwear industry, domestic market andexports

3

Production and consumption

In million pairs Brazil

2002 2003 2004 2005 2006 Var. %

Production 642 665 755 725 686 (5,4%)

Imports 5 5 9 17 19 11.8%

Exports 164 189 212 190 180 (5.3%)

Apparent consumption 483 481 552 552 525 (4.9%)

Consumption per capita 2.79 2.83 3.02 2.98 2.81 (5.7%)

Market share by volume – domestic 20.7% 19.5% 21.2% 18.6% 19.1% 50pb

Market share by volume – exports 9.8% 14.3% 13.7% 14.6% 17.5% 290pb Source: Decex, Abicalçados from 2002 to 2005; and IBGE for 2006.

4

Gross revenue (R$ million)

394 461574

697907

1,276

1,5251,353 1,392

1998 1999 2000 2001 2002 2003 2004 2005 2006

CAGR: 17.1%2.9%

5

Sales volume (in million pairs)

100 94116 102 100

16 27

2928

116 121

145130 132

32

2002 2003 2004 2005 2006

Domestic Exports

6

Average price (R$)

7.410.3 11.1 11.4 12.0

10.1

11.2 8.2 6.6 6.0

7.8

10.510.5

10.4 10.6

2002 2003 2004 2005 2006

Domestic Exports

7

Own brands

8

Main licencings

4T06 and 2006 Earnings

10

2006 highlights

Gross revenue 2.9% upSales volume 1.3% higher and average price 1.5% higherDomestic revenue (86.5% of gross revenue) growth: ~2,9% with volume 2.1% lowerExports (13.5% of gross revenue) 15% higher in US dollars, on volume 13.9% higher and average price in Us dollars 1.1% higher Gross profit 11% higher, with gross margin increasing from 41.5% to 44.7% of net salesAdjusted EBITDA 19% higher, at R$317 mn, with margin 28.8% (vs, R$266.7 mn, 25%)Adjusted net income 31.3% higher, at R$ 256.1 mn, margin 23.2% (vs. R$ 195.1 mn, 18.3%)Dividends of R$ 128 mn, pay-out of 50% and dividend yield of 6%Net cash as of December 31, 2006 at R$379 mn, 14% up

11

Main financial and economic indicators

(R$ mn) 4Q05 4Q06 Var.% 2005 2006 Var.%Gross Revenues 398.4 483.5 21.4% 1,352.9 1,392.4 2.9%

Domestic 345.2 424.3 22.9% 1,169.6 1,204.0 2.9% Exports 53.2 59.2 11.3% 183.3 188.4 2.8%

Net Sales 316.3 382.0 20.8% 1,068.0 1,102.9 3.3% Gross Profit 147.8 190.0 28.5% 443.6 493.0 11.1% Adjusted EBITDA 105.2 126.5 20.3% 266.7 317.3 19.0% Net Financial Result 2.3 (4.4) n.s. (0.2) 22.5 n.s.Adjusted Net Income 78.8 96.2 22.1% 195.1 256.1 31.3% EPS (R$ per share) 0.79 0.96 22.1% 1.95 2.56 31.3% Sales Volume (million pairs) 38.1 42.0 10.2% 130.3 131.9 1.3% Average Price (R$) 10.45 11.50 10.0% 10.39 10.55 1.5%

Adjusted Margins – as a % of net sales 4Q05 4Q06 Var.(bps) 2005 2006 Var.(bps) Gross 46.7% 49.7% 300 41.5% 44.7% 320 EBITDA 33.3% 33.1% (20) 25.0% 28.8% 380 Net 24.9% 25.2% 30 18.3% 23.2% 490

Main Financial and Economic Indicators

12

Some indicators with variation YoY

Gross revenue, adjusted Ebitda and adjusted net income - year-on-year changes, %

-100%

0%

100%

200%

300%

400%

1Q04/1Q03 2Q04/2Q03 3Q04/3Q03 4Q04/4Q03 1Q05/1Q04 2Q05/2Q04 3Q05/3Q04 4Q05/4Q04 1Q06/1Q05 2Q06/2Q05 3Q06/3Q05 4Q06/4Q05

Gross sales revenue Adjusted Ebitda Adjusted Net Income

13

Raw material cost

-

1,000

2,000

3,000

4,000

Jan-04 May-04 Oct-04 Feb-05 Jul-05 Nov-05 Mar-06 Aug-06 Dec-06-

1.00

2.00

3.00

4.00

Plastifying oils (R$'000) PVC resin (R$'000) Our COGS in raw materials - (R$) per pair

14

Sales expenses – advertisings

99.8

94.490.8

8.2% 8.8% 8.2%

2004 2005 2006

Advertising expenses (R$ mn) As a % of net sales

15

Sales expenses

Advertising expenses (R$ mn) and net sales, %

11.819.9 25.6

42.5

24.0 21.9 24.5 24.014.6 15.9

21.7

38.64.3%

9.5%7.8%

10.7%9.6%

10.8%

8.2% 7.6%6.4%

8.1%7.3%

10.1%

1Q04 2Q04 3Q04 4Q04 1Q05 2Q05 3Q05 4Q05 1Q06 2Q06 3Q06 4Q06

Advertising expenses Net sales, %

16

Adjusted Ebitda

Adjusted Ebitda (R$ mn) and adjusted Ebitda margin, %

127105

33.3% 33.1%

4Q05 4Q06

Adjusted Ebitda Adjusted Ebitda margin, %

17

Adjusted Ebitda

Adjusted Ebitda (R$ mn) and adjusted Ebitda margin, %

317267

25.0%

28.8%

2005 2006

Adjusted Ebitda Adjusted Ebitda margin, %

18

Extraordinary events in the financial statements in 2006

Non-recurring income: other operational incomeRecovery in the courts PIS/COFINS levies (June 2006) - R$11,9 mnRecovery in the courts payments to the social security system INSS (December 2006) - R$5,6 mn

Non-recurring expenses: selling expensesRescissions of contracts with sales representatives – R$12 mn

New depreciation criteria: it was revised the useful life of machinery and equipments to ten years, to equalize with IFRS, from January 2007 on. For the purposes of the IFRS accounts it was backdated and recalculated based on useful life since acquisition, for each asset. Conciliation with International Accounting Practices (IFRS): main differences in 2006:

BR GAAP IFRSAdjusted EBITDA: R$ 317.3 mn R$ 319.5 mnAdjusted net income: R$ 256.1 mn R$ 257.6 mnShareholders´ equity: R$ 979.0 mn R$ 1.050.3 mn

19

Adjusted net income

-3%

14%

45%

31% 31%

-35% -36%-24%

-60%

-40%

-20%

0%

20%

40%

60%

1Q05 2Q05 3Q05 4Q05 1Q06 2Q06 3Q06 4Q06**

12-month result: change year-on-year

Debt, Tax benefits, Dividends and Capex

21

Debt

Net cash of R$ 379.3 million in 31/Dec/06

510.8638.2 654.0 698.0 658.1

150.9

152.8 153.1215.6

169.927.2

26.3 27.1

58.4 108.9

31/Dec/05 31/Mar/06 30/Jun/06 30/Sep/06 31/Dec/06

Cash and cash equivalents Long Term debt Short term debt

22

Cost of debt

Cost of debt in 31/Dec/06

17%

60%23%

IGP-M Fixed rate (7.5% to 10.5% p.a.) TJLP

23

CAPEX – Capital Expenditure

20.8

57.9

27.5

40.6

12.2 10.0

2002 2003 2004 2005 2006 2007** Forecast

Capital expenditure(R$ mn) 4T05 4T06 2005 2006Industrial buildings and plant 1.3 0.9 16.6 2.2 Machinery and equipment 2.2 1.5 20.2 6.3 IT equipment & software 0.1 0.5 2.2 1.3 Other capital expenditure (1) 0.5 1.0 1.6 2.4 Total capital expenditure 4.1 3.9 40.6 12.2 (1) includes investments in vehicles, aircraft, real state, utensils, brands and patents

24

Tax benefits

Expiration Expirationdate date

Sobral - CE Sobral - CE ICMS - PROVIN FEB / 2019 Reduction 75% 2012 PROAPI - EXPORTS SEP / 2011 Fortaleza - CE

Crato - CE Reduction 75% 2010 ICMS - PROVIN SEP / 2022 Crato - CE PROAPI - EXPORTS JAN / 2014 Reduction 75% 2016

Fortaleza - CE Teixeira de Freitas - BA* ICMS - PROVIN APR / 2025 Reduction 75% 2016

Bahia Project * Pre-operational projectTeixeira de Freitas - BA

ICMS SEP / 2022EXPORTS MAY / 2021

Type of benefit Type of benefit

State Tax Benefits Federal Tax Benefits

25

Dividends paid

2004 2005 2006Total dividends R$ 64.1 mn R$ 81.2 mn R$ 128.3 mn# of shares outstanding 100,000,000 100,000,000 100,000,000

0.64150.8118

1.2826

2.0% 3.6% 5.6%

31.8%41.5%

50.0%

2004 2005 2006

Dividend per share Dividend yied (cash yield) Pay-out (accrual)

Guidance

27

Guidance

Gross revenue in 1H07 superior than in 1H06 and higher than 2006 over 2005 (>2.9%)Sales volume in 1H07 slightly higher than in 1H06Average price in 1H07 higher than 1H06 due to higher added value product mixCapex R$ 10 mn in 2007, including the new plant in Bahia (5% of current installed capacity of 176 mnpairs per year)Advertising expenditure between 8% to 9% of net sales in 2007

28

Investment highlights

Rigid management discipline (costs and expenses reduction)Strategy for higher added value products mix with lower costStrategy for lower added value products (State of Bahia new plant)Differentiation and more personality in the products Sustainability and sustainable design orientedSales restructuring for domestic market and the project Improving sales managementInternational strategyGlobalization of brands: Melissa and Ipanema GBMarketing new actions: alternative media, market niches, market segmentation, focus on traders and points of salesConstant development of new technologies: GrendeneTechRaw material management and use of alternative materialsHuman resources new actions: Grendene Academy, IDP, management model earning-oriented

Growth focus with profitability to maximize shareholders return