2Q18 Results | 3Q18 Information contained in this document may - PowerPoint PPT Presentation

2Q18

Results | 3Q18 Information contained in this document may include forward-looking Important statements and reflect Management’s current view and estimates of the evolution of the macroeconomic environment, industry conditions, Disclaimer Company’s performance and financial results. Any statements, expectations, capabilities, plans and assumptions contained in this document, which do not describe historical facts, such as information about declaration of dividend payment, future direction of operations, implementation of relevant operating and financial strategies, investment program and factors or trends affecting the financial condition, liquidity or results of operations, are forward-looking statements, as set forth in the “U .S. Private Securities Litigation Reform Act of 1995 ”, and involve several risks and uncertainties. There is no guarantee that these results will occur. Forward-looking statements are based on several factors and expectations, including economic and market conditions, industry competitiveness and operational factors. Any changes in such expectations and factors may cause actual results to differ from current expectations. 2

Results | 3Q18 3Q18 Highlights Net revenue in 3Q18 reached Net Revenue R$ 410.4 million , a 10.7% increase against 3Q17. 870bps Arezzo&Co recorded a ROIC increase in ROIC , reaching a level of 32.6%. Same-Store-Sales growth of 1.6% in the SSS quarter. Arezzo&Co opened 13 stores (net) and closed 3Q18 with a growth of 8.0% in Sales Area store area in the last twelve months. In 3Q18, Gross Profit totaled R$ 190.6 million (gross margin of 46.5%), a Gross Profit 12.3% increase against 3Q17. In 3Q18, Net Income totaled R$ 40.2 million (net margin of 9.8%) 6.6% Net Income increase against 3Q17. EBITDA for 3Q18 totaled R$ 70.7 million with a net margin of 17.2% EBITDA and a 8.1% increase against 3Q17. 3

Results | 3Q18 Company Growth GROSS REVENUE / DOMESTIC AND FOREIGN MARKET (R$ MILLION) 1.360,3 1.230,7 134,5 113,7 10,5% 18,3% 1.225,8 497,9 455,0 1.117,0 9,4% 54,3 GROSS THE COMPANY REACHED A 9,7% 39,0 REVENUE OF R$ 497.9 MILLION IN THE 3Q18, A 9.4% GROWTH COMPARED TO 39,4% THE 3Q17, WITH HIGHLIGHT TO THE 443,6 416,0 EXTERNAL MARKET WITH GROWTH OF 6,6 % 39,4%. US OPERATIONS INCREASED 49,7% IN THE PERIOD, WHILE EXPORTS GROWED 3Q17 3Q18 9M17 9M18 26,2%. Domestic Market External Market 4

Results | 3Q18 Gross Revenue by Brand | Domestic Market GROSS REVENUE BREAKDOWN BY BRAND / DOMESTIC MARKET (R$ MILLION) 1.225,8 1.117,0 44,7 9,7% 28,7 154,1 107,1 56,0% 335,8 343,9 6,6% 43,9% 443,6 85,1% 416,0 -2,4% 19,6 10,6 45,8% 60,5 41,5 691,1 637,3 8,5% IN 3Q18, WE HAD HIGHLIGHT THE 118,1 125,9 -6,2% ANACAPRI BRANDS WITH 45.8% GROWTH HIGHLIGHTING. 245,4 238,1 3,1% 3Q17 3Q18 9M17 9M18 1 1. OTHERS: INCREASE OF 85.1% IN 3Q18 (INCLUDES ONLY DOMESTIC Arezzo Schutz Anacapri Others 5 MARKETS FOR ALEXANDRE BIRMAN, FIEVER AND OWME BRANDS AND OTHER REVENUES).

Results | 3Q18 Gross Revenue by Channel | Domestic Market GROSS REVENUE BY CHANNEL / DOMESTIC MARKET (R$ MILLION) 1.225,8 1,4 1.117,0 117,7 9,7% 2,6 93,1 308,6 6,6% Total 26,4 % 276,3 Others 23,3 % 211,0 Web Commerce 11,7% 207,2 Multi-brand 443,6 416,0 7,2 % 0,3 1,8 % 43,6 Owned Stores 0,4 35,3 118,7 110,7 3,3 % Franchise 587,1 537,8 70,1 67,9 9,2 % 4,6% 210,9 201,7 3Q17 3Q18 9M17 9M18 SSS SELL-IN 3,0% 2,7% -1,2% 6,5% (FRANCHISES) SSS SELL-OUT SSS SELL-OUT 1,6% 4,4% 4,4% 7,2% (LOJAS PRÓPRIAS + WEB + FRANQUIAS) (OWNED STORES + WEB + FRANCHISES ) 6

Results | 3Q18 Distribution Channel Expansion 1.500 70,0 OWNED STORES AND FRANCHISES EXPANSION 1 NUMBER OF STORES – DOMESTIC MARKET 3Q18 1.300 60,0 FRANCHISES__ 393 OWNED STORES 14 1.100 1,3% 4,7% 0,7% 50,0 1,3 % MULTIBRANDS 1,215 42,6 42,0 41,5 41,2 39,4 900 FRANCHISES 68 40,0 OWNED STORES 22 MULTIMARCAS 1,129 700 54 52 49 50 -1 +2 51 30,0 -1 FRANQUIAS 129 +3 500 OWNED STORES 3 MULTIBRANDS 1,435 20,0 595 584 576 568 +43 300 +8 +8 525 +11 OWNED STORES 4 MULTIBRANDS 27 10,0 100 3Q17 4Q17 1Q18 2Q18 3Q18 -100 - OWNED STORES 5 2 MULTIBRANDS 398 Franchises Owned Stores Area (000 m2) OWNED STORES 2 AREZZO&CO’S OPENED 13 NET STORES AND ENDED THE QUARTER WITH 8.0% MULTIBRANDS 176 GROWTH OF SALES AREA OVER THE LAST 12 MONTHS. 7 1. INCLUDES SEVEN OUTLET TYPE STORES WITH A TOTAL AREA OF 1,961 M² AND STORES OVERSEAS. 2. INCLUDES ALEXANDRE BIRMAN AND SCHUTZ STORES, 3 IN NEW YORK AND ONE IN LOS ANGELES.

Results | 3Q18 Gross Profit and EBITDA GROSS PROFIT (R$ MILLIONS) EBITDA (R$ MILLIONS) 750,0 +70 bps +70 bps 250,0 248,0 246,0 -40 bps -10 bps 244,0 242,0 650,0 240,0 238,0 236,0 46,5% 234,0 46,3% 232,0 45,8% 45,6% 230,0 228,0 226,0 224,0 222,0 220,0 17,6% 218,0 17,2% 15,2% 15,1% 216,0 214,0 212,0 210,0 515,9 208,0 206,0 204,0 550,0 202,0 13,6% 200,0 198,0 196,0 194,0 192,0 190,0 188,0 186,0 168,0 454,2 40% 10,7% 184,0 182,0 180,0 178,0 176,0 174,0 172,0 170,0 151,8 168,0 166,0 450,0 164,0 162,0 160,0 158,0 156,0 154,0 152,0 150,0 148,0 146,0 144,0 142,0 140,0 138,0 136,0 134,0 132,0 130,0 128,0 350,0 126,0 124,0 122,0 120,0 12,3% 8,1% 118,0 116,0 114,0 112,0 110,0 108,0 106,0 104,0 102,0 100,0 98,0 96,0 94,0 92,0 90,0 70,7 250,0 88,0 86,0 190,6 84,0 65,4 82,0 20% 80,0 78,0 169,8 76,0 74,0 72,0 70,0 68,0 66,0 64,0 62,0 60,0 58,0 56,0 54,0 52,0 150,0 50,0 48,0 46,0 44,0 42,0 40,0 38,0 36,0 34,0 32,0 30,0 28,0 26,0 24,0 22,0 20,0 18,0 16,0 14,0 50,0 12,0 10,0 8,0 6,0 4,0 2,0 - 3Q17 3Q18 9M17 9M18 3Q17 3Q18 9M17 9M18 0% -50,0 EBITDA EBITDA Margin Gross Profit Gross Margin GROSS PROFIT TOTALED R$ 190.6 MILLION IN 3Q18 WITH AN INCREASE OF 12.3% (+ 70BPS IN GROSS MARGIN). EBITDA GREW BY 8.1% IN 3Q18 TO R$ 70.7 MILLION (EBITDA MARGIN OF 17.2%). 8

Results | 3Q18 Net Income NET INCOME (R$ MILLIONS) 160,0 12,0% -90 bps -40 bps THE COMPANY POSTED A NET MARGIN OF 10,2% 140,0 9,9% 9.8% IN 3Q18 AND A NET INCOME OF R$ 9,8% 10,0% 40.2 MILLION, 6.6% INCREASE AGAINST 9,0% 3Q17. 120,0 1,3% 100,4 99,1 8,0% 100,0 80,0 6,0% 6,6% 60,0 4,0% 40,2 37,7 40,0 2,0% 20,0 - 0,0% 3Q17 3Q18 9M17 9M18 9 Net Income Net Margin

Results | 3Q18 Operating Cash Flow OPERATING CASH FLOW (R$ THOUSAND) AREZZO&CO GENERATED R$ 38.5 Operating cash flow 3Q18 3Q17 9M18 9M17 MILLION CASH FROM OPERATIONS IN 3Q18, LOWER THAN THE AMOUNT PRESENTED Profits before income tax and social contribution 53.762 58.213 122.206 141.147 IN 3Q17. Depreciation and amortization 10.667 9.218 27.880 22.630 IT IS WORTH HIGHLIGHTING THE PAYMENT Others OF INTEREST ON EQUITY RELATED TO 1ST (191) (2.925) 13.972 (4.271) SEMESTER OF 2018, IN JULY 25TH IN THE AMOUNT OF R$21.0 MILLION Decrease (increase) in assets / liabilities (17.898) (18.260) (53.368) (3.655) Trade accounts receivables (51.604) (50.078) (50.007) (30.567) Inventories (5.883) 5.014 (34.924) (9.794) Suppliers 20.193 19.670 23.129 42.575 Change in other noncurrent and current assets and liabilities 19.396 7.134 8.434 (5.869) Payment of income tax and social contribution (7.855) (13.040) (13.996) (27.911) Net cash flow generated by operational activities 38.485 33.206 96.694 127.940 10

Results | 3Q18 Investments (CAPEX) and Indebtedness CAPEX (R$ MILLIONS) INDEBTEDNESS (R$ MILLIONS) 36,0 10,5 3Q18 2T18 3T17 Cash position and Indebtedness 157,9% Cash 283.745 283.172 218.254 Total debt 172.421 175.501 93.221 170,2% 314,4% 16,1 Short term 161.180 162.002 72.946 13,9 13,7 559,1% % total debt 93,5% 92,3% 78,3% 2,5 170,4% 5,1 Long-term 154,9% 11.241 13.499 20.275 6,0 5,1 % total debt 6,5% 7,7% 21,7% 6,4 0,8 9,4 71,7% 25,0% Net Debt 2,5 5,5 (111.324) (107.671) (125.033) 2,2 1,8 3Q17 3Q18 9M17 9M18 Stores Corporate Others total IN 3Q18, AREZZO&CO INVESTED R$ 13.7 MILLION IN CAPEX, INCLUDING: BRAZIL: (I) AREZZO&CO NEW OFFICE IN SÃO PAULO, (II) INVESTMENTS IN TECNOLOGY IN ALEXANDRE BIRMAN BRAND FACTORY, (III) REMODELING OF SCHUTZ STORES (IV) • CONSTRUCTION OF AN ADDICTIONAL OWNED FACTORY, FOCUSED ON SNEAKERS AND COMFORT SHOES, (V) OPENING THE FIEVER STORE IN PÁTIO HIGIENÓPOLIS. UNITED STATES: (I) DESIGN AND IMPROVEMENT IN ALEXANDRE BIRMAN BRAND INTERNATIONAL WEB COMMERCE (II) INVESTMENTS IN BRANDING FOR THE SCHUTZ BRAND. • 11