Disclaimer
The information contained here may include forward-looking information and reflects the executive office’scurrent perception and prospects for the macroeconomic environment, the industry situation, the Company'sperformance and financial results. Any statements, expectations, capacities, plans and projectionscontained here which do not describe historical facts, such as information about the dividend paymentstatement, the future course of operations, the introduction of relevant financial strategies, the investmentprogram and the factors or trends affecting the financial condition, liquidity or the operating results areconsidered forward-looking information as defined by the “U.S. Securities Litigation Reform Act” of 1995 andinvolve a number of risks and uncertainties. These results are not guaranteed to materialize. Thesestatements are based on several factors and expectations, including the economic and market conditions,level of competition in the industry and operating factors. Any changes in these expectations and factorsmay lead to real results materially different from the current expectations.
The consolidated financial information of Arezzo Indústria e Comércio S/A – Arezzo&Co presented herecomplies with the International Financial Reporting Standards – IFRS, issued by the InternationalAccounting Standards Board – IASB, based on audited financial information. The non-financial information,as well as other operating information, was not audited by the independent auditors
2
Platform of brands of reference
Arezzo&Co is the leading company in the footwear an d accessories sector through its platform of Top of M ind brands
1
4
.1 Company overview¹
Arezzo&Co is the reference in the Brazilian retail sector and has a unique positioning combining growth with high cas h generation
1Leading company in the footwear and accessories sector with presence in all Brazilian states
Controlling shareholders are the reference in the sector
Development of collections with efficient supply chain
Asset light: high operational efficiency
Strong cash generation and high growth
6.9 million pairs of shoes(1)
459 thousand handbags(1)
c.1,900 points of sale
11.1% market share(2)
38 years of experience in the sector
Wide recognition
~11,500 models created per year
Lead time of 40 days
7 to 9 launches per year
84% outsourced production
ROIC of 48% in 2Q11
1,755 employees
Net revenues CAGR: 34% (07- 2Q11(1))
Net income CAGR: 45% (07- 2Q11(1))
Increased operating leverage
Notes:1. As of June 20112. Refers to the Brazilian women footwear market (source: Euromonitor, IBGE and Company estimates) . Estimated for 2010. 5
� Founded in 1972
� Focused on brand and product
� Consolidation of industrial business model located in Minas Gerais
� 1.5 mm pairs per yearand 2,000 employees
� Focus on retail
� R&D and production outsourcing on Vale dos Sinos -RS
� Franchises expansion
� Specific brands for each segment
� Expansion of distribution channels
� Efficient supply chain
First store
Fast Fashion concept
Launch of the first design with
national success
+
Schutz launch
Launch of new brands
Merger
Commercial operations centralized in São Paulo
Strategic Partnership(November 2007)
Industry Reference Foundation and structuring Industrial Era Corporate EraRetail Era
2011…70’s 80’s 90’s 00’s
Opening of the first shoe factoryOpening of the first shoe factory
Opening of the flagship store at Oscar FreireOpening of the flagship store at Oscar Freire IPO
.2 Successful track record of entrepreneurshipThe right changes at the right time accelerated the Company's development
1
R$196.0 mn in primary offering
.3 Shareholder structure 1
(1) Arezzo&Co capital stock is composed of 88,542,410 common shares, all nominative, book-entry shares with no par value.Shareholder structure as of August, 2011.
7
Post-offering
53.6% 34.3%
Birman family Management Others
11.8% 0.4%
1
8
.4 Culture & Management: Arezzo towards 2154
Code of Ethics
� “Our behavior is a positive example for all activities and internal or external interactions; and we treat everyone with respect, equality and cooperation”
� “We properly protect the confidentiality of our information, documents, trademarks, intellectual property and cherish the proper use of our assets”
� “The Arezzo Group’s interests prevail over personal or third party interests and guide any decision-making in the company”
� “We act with fairness in our relationships with suppliers, franchisees and customers, eliminating any situation that may generate expectations of bias in the context of receipt of gifts and invitations”
� “Our suppliers are evaluated and contracted based on clear criteria and in line with our ethical standards and conduct”
� “We are committed to ensure a responsible environmental stewardship by ensuring and establishing high standards for the purposes of protecting the environment and conserving its resources”
� “We have a socially responsible conduct and do not use any resources for unethical or illegal purposes, or that violates local or international laws”
� “It is our duty to report any breach of the Code of Ethics irrespective of the public involved”
2010
2154
Meritocratic culture based on best practices makes Arezzo a company prepared to reach 2154
1
.5 Strong platform of brands
Strong platform of brands, aimed at specific target markets, enables the Company to capture growth from different income seg ments
1TrendyNewEasy to wearEclectic
FashionUp to dateBoldProvocative
16 - 60 years old 18 - 40 years old
R$ 270.00/pair
R$ 525 million R$ 194 million
PopFlat shoesAffordableColorful
12 - 60 years old
R$ 99.00/pair
R$ 10 million
DesignExclusivityIdentitySeduction
R$ 900.00/pair
R$ 7.5 million
20 - 45 years old
66.9% 24.8% 1.3% 1.0%
Brands profile
Female target market
Sales Volume 3
% Gross Revenues 4
Retail price point
Foundation 1972 1995 2008 2009
O
6
MB
18
O
1
O
14
F
268
MB
775
Notes:1. Points of sales (2Q11); O = Owned Stores; F = Franchised Stores; MB = Multi-brand Stores; EX = Exports2. % gross revenues (2010)3. Last twelve months (2Q11) gross revenues, does not include other revenues and exports (not generated by the 4 brands) except for Alexandre Birman brand, which sales volume indicated above
already includes the exports of this brand.1. % total gross revenues (last twelve months -2Q11) 9
R$ 170.00/pair
MB
499
O
10
F
1
MB
1,124
Dis
trib
utio
n ch
anne
l1 POS 1
% gross rev.2
74% 12%13% 1% 70%22% 100%
EX
-
1%
EX
-
8%
EX
-
13% 21% 66%
50% 27% 16% 7% 100%
.6 Multiple distribution channels1
10
394
213
12554²
785
Flexible platform through three distribution channe ls with differentiated strategies, maximizing the Company's profitability
Gross Revenue Breakdown (R$ mn)¹
Gross Revenues per Channel
31 owned stores being 5 Flagship stores
More than 940 cities and 1,612 multi-brands
269 franchises in more than 140 cities
Broad distribution in every Brazilian
state
Franchises Multi-brands Owned stores Others Total
Notes:1. Last twelve months (2Q11) gross revenues2. Considers external market and other revenues in the domestic market
Management
BRANDS OF REFERENCE
Customer focus: we are at the forefront of Brazilian women fashion and design
Multi-channelSourcing & LogisticsCommunication &
Marketing
SEASONED MANAGEMENT TEAM WITH PERFORMANCE BASED INCENTIVES
NATIONWIDE DISTRIBUTION STRATEGY
EFFICIENTSUPPLY CHAIN
SOLID MARKETING AND COMMUNICATION PROGRAM
ABILITY TO INNOVATE
R&D
1 2 3 4 5
12
Unique business model in Brazil 2
.1 Ability to Innovate
We produce 7 to 9 collections per year2I. Research
Creation: 11,500 SKUs / year
II. Development III. Sourcing IV. Delivery
Arezzo&Co fulfills the various aspirations of wome n, delivering on average 5 new models per day, allowing for consistent desire-driv en purchases
Available for selection: 4,600 SKUs / year
13
Stores: 3,100 SKUs / year
Creation
Launch Orders
Production
Delivery
Normal sale
Discount sale
Winter I Winter II Winter III Summer I Summer II Summer III Summer IV
Activities JAN FEV MAR APR MAY JUN JUL AUG SEP O CT NOV DEC
.2 Communication & marketing reflected in every aspect of the store…Stores constantly modified to incorporate the conce pt of each new collection, creating desire-driven purchases
2
All visual communication at stores is monitored and updated simultaneously throughout Brazil for each new collection
Flagship storesStore layout & visual merchandising
14
POS materials (catalogs, packaging, among others)
.2 ...allied with a broad media plan
Arezzo&Co promotes its brands through unique and wi despread campaigns in different media outlets
2Strong presence in printed media
117 insertions in printed media on 225 pages
Continuous insertions in fashion editorials
206 exhibitions in fashion editorials
Digital communication
423k visits / month to Arezzo website and 96k to Sc hutz website
Presenting electronic media and television
15
343 showings on TV and 620 in cinemas
.3 Flexible production process2
16%
84%
16
Arezzo’s size allows for large scale purchases from each supplier
Production speed, flexibility and scalability are a ble to ensure Arezzo&Co’s expected growth
Owned factory with capacity to produce 1.2 million pairs annually and strong relationship with Vale dos Sinos production cluster
Flexible supply model Gains of scale
Joint purchasesCertification and auditing of suppliers
In-house certification and auditing ensure quality and punctuality (ISO 9001 certification in 2008)
Negotiation of raw material jointly with local suppliers
Supply Profile Simultaneous consolidation and distribution in nati onal scale
Outsourced production
Owned plant
Reception: 60,000 units / day
Storage: 60,000 units / day
Separation: 100,000 units / day
Invoicing and labeling: 150,000 units / day
Distribution: 200,000 units / day
12
3
4
5
.4 ...leveraged by owned stores…
Multiple distribution model allows for capturing th e value in the chain while widening distribution capillarity and b rands’ visibility
2GREATER BRAND AWARENESS AND VISIBILITYCOUPLED WITH OPERATIONAL EFFICIENCIES
Owned stores strategy
17
Anacapri Schutz Arezzo Alexandre Birman
� Allows direct contact with consumer
� Main consumption centers (mainly SP and RJ)
� High profitability with great operational efficiency� Benchmark for franchisees
� Flagship stores ensure greater visibility and reinforce brand image
Total sales area (m²)
1,044 1,3692,067
2,967
2007 2008 2009 2010
6974
6878
2007 2008 2009 2010
Average sales area / store (m²)
2
4 or more franchises
1 franchise
2 franchises
3 franchises
41%
13%
32%
14%
18
.4 …with efficient management of the franchise network...Model allows rapid expansion with little invested c apital by Arezzo&Co and high profitability to franchisees
Successful Partnership: “Win – Win” Franchise Concentration per Operator
Average payback of 39 months2
100% of on-time payments
96% satisfaction of franchisees1
Excellency in Franchising Award in the last 8 years (ABF)
Best Franchise in Brazil (2005) and in the sector for 7 years since 2004
(# of Franchisees by # of Franchises)� Intense retail training
� Ongoing support: average of 10 stores/ consultant and average of 22 visits per store/ year
� Strong relationship with and ongoing support to franchisee
Notes: FY2010 data1. 96% of the current franchisees indicated they would be interested in opening a
franchise if they did not already have one2. Annual sales of R$ 2,330 thousand + average initial investment of R$ 433 thousand
+ working capital of R$ 414 thousand
1,6461,612
1,364
1,573
.4 ...and of the multi-brand stores2
Multi-brand stores
19
Multi-brand stores’ Gross Revenue¹ (R$ mn) IMPROVED DISTRIBUTION AND BRAND VISIBILITY
� Greater brand capillarity
� Rapid expansion at low investment and risk
� Important sales channel for smaller cities
� Presence in over 940 cities
Multi-brand stores widen the distribution capillari ty and the brands’ visibility, resulting in a strong retail footprint
Notes:1. Domestic market only
84108
134
1H10 1H11 2009
188
2010
Gross Revenue1 (R$ milhão) # Store
.4 Large capillarity and scale of store chain…Store chain with high capillarity, reaching more th an 140 cities and well-positioned among the retail companies
2
20
Size and average sales per exclusive stores - 2010
BrandAverage size
(m2)Net Revenue/ m2
(R$ 000s)Total
Stores 1,2
50 324 289
130 154 347
2,050 9 134
1,067 7 277
2,557 8 123
316 20 57
5
268 franchises + 11 owned stores + 3 outlets +775 multi-brand clients
1 franchise + 10 owned stores +1124 multi-brand clients
Points of sale (1Q11)
TOTAL
6 owned stores499 multi-brand clients
1 owned store +18 multi-brand clients
269 franchises + 28 owned stores + 3 outlets +1,612 multi-brand clients= 1,912 points of sales
Source: IBGE, Companies’ Reports; number of stores according to latest data provided by the CompaniesNotes:1. Considers only owned stores (Arezzo and Schutz) and Arezzo franchises;2. For Hering, considers only Hering Store chain stores;3. 2008 data;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;
Geographic distribution vs. GDP
N
NE
MW
SE
S
Region Arezzo&Co 1 GDP3
4%
20%
7%
54%
15%
5%
13%
9%
56%
17%
Arezzo and Ana CapriSchutz and Alexandre
BirmanIndustrial Supply Chain Strategy and IT Financial
Alexandre Birman Cisso Klaus Marcio Jung Thiago BorgesKurt Richter
HR
Raquel Carneiro
Marco Coelho
Internal Auditing
Anderson Birman
Claudia Narciso
.5 Seasoned and professional management team2
Anderson Birman
Years at Arezzo
38
15
3
12
9
6
7
28
1
Years of experience
38
15
11
22
30
26
45
39
11
NameTitle
Anderson BirmanCEO
Alexandre BirmanCOO
Thiago Borges CFO and Investor Relations Officer
Claudia NarcisoDirector – R&D
Kurt RitchterDirector – Strategy and IT
Marcio Jung Director – Supply Chain
Cisso KlausDirector – Industrial
Marco CoelhoDirector – Internal Auditing
Raquel CarneiroDirector – HR
Highly qualified management team
21
� Stock option plan for key executives
� Performance based compensation package for all employees
� Independent business units for each brand but unified officers (Industrial, Logistics, Financial and HR) for the whole company
.5 Corporate governance
After the offering, the Board is composed by 8 memb ers being 2 appointed by Tarpon, 4 by the controlling sharehold ers and 2 independent members
2Name ExperienceTitle
Anderson BirmanChairman of the Board
Arezzo’s CEO since its foundation, with over 38 years of experience in the industry
Alexandre BirmanVice-Chairman of the Board
Arezzo’s COO and founder of Schutz, with 15 years of experience in the industry
Pedro FariaBoard Member
Tarpon’s partner since 2003, member of the Board of Directors of Direcional Engenharia, Omega Energia Renovável, Cremer and Comgás
Eduardo MufarejBoard Member
Tarpon’s partner since 2004, member of the Board of Directors of Tarpon, Omega Energia Renovável and Coteminas
José Murilo CarvalhoBoard Member
President of the Attorney’s Association of Minas Gerais
Board Member of the Brazilian Bar Association
José BolonhaBoard Member
Founder and CEO of “Ethos Desenvolvimento Humano e Organizacional"
Board member of the Inter-American Economic and Social Council (UN, WHO)
Guilherme A. FerreiraIndependent Board Member
CEO of Bahema Participações, board member of Pão de Açúcar, Banco Signatura Lazard, Eternit, Tavex and Rio Bravo Investimentos
22
Artur N. GrynbaumIndependent Board Member
CEO of Grupo Boticário (largest franchise company in Brazil) and Vice-President at Abihpec (Brazilian Association of Industries in the field of Personal Hygiene, Perfumes, and Cosmetics )
.1 Social upward mobility driving internal consumptionIncome growth and job creation lead to rapid social upward mobility and increasing internal consumption
3
24
2003
46 (24%)
30 (16%)
40 (20%)
16 (8%)
47 (27%)
49 (28%)
+18 mi(2003-14E)
+47 mi(2003-14E)
2014E2008
31 (16%)20 (11%)13 (8%)
66 (37%)93 (49%)
113 (56%)
...Resulting in a significant rise of consumer good s consumption, including Footwear and Apparel(Consumption growth as a result of the upward mobility in social classes; indexed 100 = class D/E)
Source: IBGE, FGV, LCA, Bain & Co., BCG, Roland Berger
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$768
Class
D/EClass
CClass
BClass
A
Food, Drinks and Cigarettes
Electronicsand Furniture
Footwear and Apparel
Prescription/OTC drugs
Hygiene and Personal Care
5.4x
10.1x
12.6x
9.3x
11.2x
Footwear and apparel have the largest growth potential
3.3x
4.4x
5.4x
4.3x
5.3x
1.7x
1.9x
2.3x
1.9x
2.3x
1.0x
1.0x
1.0x
1.0x
1.0x
Class C
Class A/B
Class D
Class E
Brazil experiences an accelerated process of social upward migration... (Millions of people)
25
.2 Brazilian footwear market overview 3
+4% +6%
Footwear market (R$ bn)+8%
2007 2008 2009 2010
29.7 31.032.9
35.4
8.6 9.0 9.5 10.3
2007 2008 2009 2010
Total footwear Women footwear
4.7%
8.1%8.6%
11.1%
Footwear consumption
Arezzo&Co has a significant stake of the the women fo otwear market and has consistently increased its market share
Arezzo&Co’s market share 1
Source: IBOPE Inteligência (Pyxis), Satra, World Bank, ABICALÇADOS, IEMI, MTE, MDIC, / SECEX, IBGENote: 1. Based on Euromonitor research and IBOPE Inteligência (Pyxis). Estimated market share, which includes both Arezzo and Schutz
Kids13%
2009
Men17%
Sports37%
WomanFootwear
37%2009
Class C33% Class B
44%
Class A17%Class D/E
6%
IncomeClass
689.5 717.4779.6
3.6 3.74.1
2008 2009 2010
Apparent consumption - # pairs (million)
Per capita consumption - # pairs
+4%+9%
+3% +11%
252.7
238.2
232.3
2010 2009 2008
26
.3 Brazilian footwear industry Overview3Brazilian Footwear Production
Leather Footwear Production(# pairs – million)
+6%+3%
Vale dos Sinos – Main Characteristics
Production - # pairs (million) 302
Exports - # pairs (million) 32
Exports (US$ million) 733
Employees (‘000) 130
Producers (‘000) 3.4
Source: ABICALÇADOS, IEMI, MTE, MDIC, / SECEX, IBGE
816 814 894
10,2339,455
12,340
2008 2009 2010
# Pairs (million) Value (US$ million)
-8%31%
0%+10%
Rubber55%
Leather28%
Sports10%
Other7%
2010
Arezzo&Co’s outsourced production is mainly located at Vale dos Sinos region, a Brazilian footwear cluster in Rio Grande do Sul State:
.4 Growth fundamentals3
Inventory management
Increase operational efficiencies and margins
Improve store productivity
Expand distribution footprint
Capitalize on strong growth fundamentals in Brazil
Key value drivers
27
Net income (R$ mm) Net margin (%)
CAGR 05-2Q11: 44%
Net income (R$ mn) and net margin (%)
9 1017
22
49
2005 2006 2007 2008 2009 2010 2Q11(1)
65
76
7%7%
9%
6%
12%11%
12%
(1) 2Q11 (Last twelve months)
.1 Operational and financial highlights4Gross Revenues – Domestic Market and Exports Market s (R$ mn)
29
272.9348.6
402.6 468.8662.5
23.119.7
56.944.2
50.4
1H10 1H11 2008 2009 2010
Exports Market Domestic Market
24.4%
296.0
368.4459.6
513.0
712.9
41.3%
14.0%
39.0%
27.7%
-14.4%
-22.4%
16.4%
11.6%
.1 Operational and financial highlights4Gross Revenues per Channel (R$ mn) – Domestic Market
30
Notes:1. Others: other sales’ channels in the Domestic Market.2. SSS Owned Stores (Sell out); SSS Franchisees (Sell In).
Owned StoresFranchises
SSS²
25.8%42.4%
15.6%19.1%
28.9%3.7%
17.6%29.1%
1
144.4 179.4260.9
358.783.6107.8
133.7
188.4
43.358.7
70.4
110.0
1.72.8
3.7
5.4
1H10 1H11 2009 2010
Other-Domestic Market Owned Stores Multi-Brand Retail Store Franchises
37.5%
40.9%
56.2%
35.6%
28.9%
24.3%
272.9348.6
468.8
662.541.3%
24.4%
237.9290.8
193.8
367.1412.1
571.5
1H10 1H11 2007 2008 2009 2010
89.4%
12.3%
38.7%
22.2%
4
31
.2 Operational and financial highlights
Key highlights
Strong growth for the main brands in first half of the year
The first half 2011 ended with 300 store chain and Sales area expansion of 13.6% year-over-year
1S11 Net Revenues increased by 22.2% year-over-year (38.7% 2010/ 2009)
Number of Stores (R$ mn) and Total Area (m² - ‘000)
CAGR 07-10: 43.4%
Net Revenues (R$ mn)
248 269208 227 242 267
25 316 10 21
29
15.8 18.0
11.7 13.3 14.9
17.6
1H10 1H11 2007 2008 2009 2010
Owned Stores Franchises Sales Area
273 300263+27
+23214
13.6%
237296
+26+33
13.2%12.5%
17.7%
Area CAGR 07-10: 14.4%
4Gross Profit (R$ mn) and Gross Margin (%)
32Notes:1. Adjusted for interest on shareholders’ equity and goodwill amortization
.3 Operational and financial highlights
Net Income (R$ mn) and Net Margin (%)
EBITDA (R$ mn) and EBITDA Margin (%)
100122 138
167
232
42.2% 42.0%
37.7%40.5% 40.5%
1H10 1H11 2008 2009 2010
27
39
22
49
65
11.4%
13.3%
6.1%
11.8% 11.3%
1H10 1H11 2008 2009 2010
4049
42
61
95
17.0% 16.9%
11.5%
14.7%
16.7%
1H10 1H11 2008 2009 2010
33
4 .4 Operational and financial highlights
Cash Conversion Cycle (R$ thousand)
Cash Flows From Operating Activities (R$ thousand)
Cash flows from operating activities 2Q10 2Q11 Growth or Spread (%)
1H10 1H11 Growth or Spread (%)
Income before income taxes 22,200 30,345 8,145 37,907 51,666 13,759 Depreciation and amortization 559 961 402 1,167 1,840 673 Other (45) (4,395) (4,350) 49 (6,263) (6,312)
Decrease (increase) in current assets / liabilities 11,848 22,814 10,966 (6,579) 10,747 17,326
Trade accounts receivable 41,805 42,262 457 21,742 23,896 2,154 Inventories (7,920) (3,114) 4,806 (17,190) (18,837) (1,647) Suppliers (20,170) (13,629) 6,541 (2,065) 8,528 10,593 Change in other current assets and liabilities (1,867) (2,705) (838) (9,066) (2,840) 6,226
Change in other non current assets and liabilities (718) (907) (189) 1,880 (1,171) (3,051)
Tax and contributions (1,224) (5,974) (4,750) (2,080) (8,340) (6,260)
Net cash generated by operating activities 32,620 42,844 10,224 32,344 48,479 16,135
Summary of Investments (R$'m)
2Q10 2Q11 Growth or Spread (%)
1H10 1H11 Growth or Spread (%)
CAPEX - total 4.0 3.6 -10.0% 6.5 7.3 12.3%
Stores – expansion 2.1 2.1 0.0% 3.8 4.3 13.2%
Corporate 1.0 1.2 20.0% 1.7 2.5 47.1%
Others 0.9 0.2 -77.8% 1.0 0.5 -50.0%
Capex (R$ million)
#days R$ '000 #days R$ '000
70 92,934 81 139,003 11
Inventory 29 38,395 40 67,699 11
Accounts Receivable 61 81,548 63 108,576 2
(-)Accounts Payable 20 27,009 22 37,272 2
Cash Conversion Cycle1H10¹ 1H11¹ Change
(in days)
34
4 .4 Operational and financial highlights
Cash Position and Indebtness 2Q10 1Q11 2Q11
Cash and cash equivalents 48,957 187,293 199,339
Total Debt 42,677 33,586 32,276
Short Term Debt 21,998 12,813 12,547
As % of Total Debt 51.5% 38.1% 38.9%
Long Term Debt 20,679 20,773 19,729
As % of Total Debt 48.5% 61.9% 61.1%
Net Debt (6,280) (153,707) (167,063)
EBITDA LTM 79,178 98,930 104,200
Net Debt / EBITDA LTM -0.08x -1.55x -1.60x
Indebtedness (R$ ‘000)
Indebtedness totaled R$32.3 million in 2Q11 versus R$33.6 million in 1Q11
Long-term debt relevance stood at 61.1% in 2Q11 ver sus61.9% in 1Q11
Indebtedness policy remained conservative, with low weighted-average cost of Company's total debt
36
.1 Key performance indicatorsASummary of Results 2Q10 2Q11
Growth or spread (%)
1H10 1H11 Growth or spread (%)
Net Revenue 125,302 152,240 21.5% 237,912 290,835 22.2%
Gross Profit 53,597 65,708 22.6% 100,350 122,153 21.7%
Gross Margin 42.8% 43.2% 0.4 p.p. 42.2% 42.0% -0.2 p.p.
EBITDA¹ 23,019 28,289 22.9% 40,395 49,024 21.4%
EBITDA¹ Margin 18.4% 18.6% 0.2 p.p. 17.0% 16.9% -0.1 p.p.
Net Income 16,772 24,039 43.3% 27,142 38,767 42.8%
Net Margin 13.4% 15.8% 2.4 p.p. 11.4% 13.3% 1.9 p.p.
Operating Indicators 2Q10 2Q11 Growth or spread (%)
1H10 1H11 Growth or spread (%)
# of pairs sold (in Thousands) 1,309 1,562 19.3% 2,545 2,994 17.6%
# of handbags sold (in Thousands) 66 103 56.0% 135 182 34.8%
# of employees 1,430 1,755 22.7% 1,430 1,755 22.7%
Number of Stores 273 300 9.9% 273 300 9.9%
Owned Stores 25 31 24.0% 25 31 24.0%
Franchises 248 269 8.5% 248 269 8.5%
Outsourcing (as % of Sales) 81.5% 83.6% 2.1 p.p. 80.3% 83.6% 3.3 p.p.
SSS² (Franchises – sell-in) 32.4% 24.2% 42.4% 19.1%
SSS² (Owned Stores – sell-out) 29.0% 19.2% 25.8% 15.6%
37
.2 Balance Sheet - IFRSAAssets 2T10 1T11 2T11 Liabilities 2T10 1T11 2T11
Current assets 183,429 419,920 389,423 Current liabilities 65,626 103,256 79,068 Cash and cash equivalents 44,139 6,809 3,261 Loans and financing 21,998 12,813 12,547 Short-term investments 4,818 180,484 196,078 Trade accounts payable 27,009 50,901 37,272 Trade accounts receivable 81,548 150,836 108,576 Dividends and interest on equity capital payable - 11,964 7,177 Inventories 38,395 64,585 67,699 Other liabilities 16,619 27,578 22,072
Taxes recoverable 7,921 8,889 6,196 Other receivables 6,608 8,317 7,613 Non-current liabilities 27,902 30,069 26,365
Loans and financing 20,679 20,773 19,729
Non-current assets 51,217 60,977 63,117 Related parties 2,367 2,079 762
Long-term assets 22,477 22,025 21,785 Other liabilities 4,856 7,217 5,874 Financial investments 103 96 66
Taxes recoverable 1,360 3,774 3,170 Equity 141,118 347,572 347,107 Deferred income and social contribution taxes 16,855 14,440 13,432 Capital 21,358 40,917 40,917 Other receivables 4,159 3,715 5,117 Capital reserve 71,019 238,086 238,086
Investments - - - Income reserves 25,069 37,779 37,779 Property, plant and equipment 16,840 22,134 22,904 Proposed additional dividends - 16,062 - Intangible assets 11,900 16,818 18,428 Retained Earnings 23,672 14,728 30,325
Total assets 234,646 480,897 452,540 Total liabilities and shareholders’ equity 234,646 480,897 452,540
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.3 Income Statement - IFRSAIncome statement - IFRS 2Q10 2Q11 Growth (%) 1H10 1H11 Gr owth (%)
Net operating revenue 125,302 152,240 21.5% 237,912 290,835 22.2%Cost of sales and services (71,705) (86,532) 20.7% (137,562) (168,682) 22.6%
Gross profit 53,597 65,708 22.6% 100,350 122,153 21.7%Operating income (expenses): (31,137) (38,380) 23.3% (61,122) (74,969) 22.7% Selling (21,865) (26,476) 21.1% (42,009) (52,000) 23.8% Administrative and general (11,305) (11,967) 5.9% (21,393) (23,390) 9.3% Other operating income, net 2,033 63 -96.9% 2,280 421 -81.5%
Income before financial results 22,460 27,328 21.7% 39,228 47,184 20.3%Financial income (expenses) (260) 3,017 -1260.4% (1,321) 4,482 -439.3%
Income before income taxes 22,200 30,345 36.7% 37,907 51,666 36.3%Income and social contribution taxes (5,428) (6,306) 16.2% (10,765) (12,899) 19.8%
Current (3,767) (5,298) 40.6% (8,602) (7,265) -15.5%Deferred (1,661) (1,008) -39.3% (2,163) (5,634) 160.5%
Net income for the year 16,772 24,039 43.3% 27,142 38,767 42.8%
Income per share 0.2143 0.2715 26.7% 0.3468 0.4473 29.0%
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.4 Cash Flow Statement - IFRSACash Flow Statement - IFRS 2Q10 2Q11 1H10 1H11
Cash flows from operating activities Income before income and social contribution taxes 22,200 30,345 37,907 51,666
Adjustments to reconcile to net cash generated by operating activities 514 (3,434) 1,216 (4,423)
Depreciation and amortization 559 961 1,167 1,840
Financial Investments 226 (3,396) 1,715 (5,898)
Other (271) (999) (1,666) (365)
Decrease (increase) in assets 32,534 41,744 5,389 5,095
Trade accounts receivable 41,805 42,262 21,742 23,896
Inventories (7,920) (3,114) (17,190) (18,837)
Taxes recoverable (1,350) 3,297 (1,551) 2,426
Variation in other current assets 2,079 701 3,169 (658)
Judicial deposits (2,080) (1,402) (781) (1,732)
(Decrease) increase in liabilities (21,404) (19,837) (10,088) 4,481
Trade accounts payable (20,170) (13,629) (2,065) 8,528
Labor liabilities 3,447 (3,670) (892) (2,613)
Tax and social liabilities (4,828) (2,165) (6,523) (1,960)
Change in other liabilities 147 (373) (608) 526
Paid incomes and social contribution taxes (1,224) (5,974) (2,080) (8,340)
Net cash generated by operating activities 32,620 42,844 32,344 48,479
Net cash used in investing activities (4,586) (15,346) (5,346) (191,477)
Net cash used in financing activities with third pa rties (3,397) (1,707) 1,466 (15,479)
Net cash used in financing activities with sharehol ders (23,066) (29,339) (23,316) 153,734
Increase (decrease) in cash and cash equivalents 1,571 (3,548) 5,148 (4,743)
Increase (decrease) in cash and cash equivalents 1,571 (3,548) 5,148 (4,743)
Arezzo&Co
O/S 88,542,410Ticker ARZZ3Listing 2/2/2011
Share price (06/30/2011) 21.75Market Cap (R$) 1,926 mn
Share price (08/09/2011) 17.67Market Cap (R$) 1,565 mn
Share performance1H11¹ 14.5%2011² -7.0% 2/1/2011
Arezzo Ibovespa
19,0
17,0
26,0
08/09/201102/02/2011
40
.5 Stock priceA
1. From February 2, 2011 to June 30, 20112. From February 2, 2011 to August 9, 2011
21% over Ibovespa Index
41
IR Contacts
� Thiago Borges
� Daniel Maia
Phone: +55 11 [email protected]
CFO and IR Officer
IR Manager