2Q18 Results | 4Q18 Information contained in this document may - PowerPoint PPT Presentation

2Q18

Results | 4Q18 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 | 4Q18 4Q18 Highlights Net revenue in 4Q18 reached Net Revenue R$ 412.2 million , a 13.4% increase against 4Q17. 180bps Arezzo&Co recorded a ROIC increase in ROIC , reaching a level of 29.2%. In 4Q18, Gross Profit totaled R$ 194.7 Gross Profit million (gross margin of 47.2%) , a 14.8% increase against 4Q17; Same-Store-Sales growth of 3.6% in SSS the quarter. EBITDA for 4Q18 totaled R$ 64.1 million with a net margin of 15.6% and a 17.7% EBITDA increase against 4Q17. Arezzo&Co opened 36 stores (net) in the quarter and ended 4Q18 with 5.5% Sales Area in store area growth in the last twelve In 4Q18, Net Income totaled R$ 42.2 million months. (net margin of 10.2%) . Net Income 3

Results | 4Q18 Company Growth GROSS REVENUE / DOMESTIC AND FOREIGN MARKET (R$ MILLION) 1.865,8 11,1% 186,9 1.678,9 21,0% 154,5 10,1% 1.678,9 12,8% 1.524,4 GROSS THE COMPANY REACHED A REVENUE OF R$ 505.5 MILLION IN THE 505,5 4Q18, A 12.8% GROWTH COMPARED TO 28,5% 448,2 THE 4Q17, WITH HIGHLIGHT TO THE 52,4 40,8 EXTERNAL MARKET WITH GROWTH OF 11,2 % 28.5%, REPRESENTING 10.4% OF TOTAL REVENUE. 453,1 407,4 US OPERATION INCREASED BY 65.5% IN REAIS IN THE PERIOD AND 40.8% IN 4Q17 4Q18 2017 2018 DOLLAR. Domestic Market Foreign Market 4

Results | 4Q18 Gross Revenue by Brand | Domestic Market GROSS REVENUE BREAKDOWN BY BRAND / DOMESTIC MARKET (R$ MILLION) 10,1% 1.678,9 65,2 1.524,4 55,5% 41,9 219,6 157,3 39,6% 443,5 -1,8% 451,4 11,2% 11,2% 54,5% 30,5% 8,8% 453,1 950,7 407,4 20,4 IN 4Q18, THE HIGHLIGHT GOES TO 0,2% 873,8 13,2 65,4 ANACAPRI AND AREZZO BRANDS 50,1 107,7 30.5% AND 9.7% 107,5 WITH GROWTH RESPECTIVELY. 9,7% 259,6 236,6 4Q17 4Q18 2017 2018 1. OTHERS: INCREASE OF 54.5% IN 4Q18 (INCLUDES ONLY 1 DOMESTIC MARKETS FOR ALEXANDRE BIRMAN, FIEVER 5 Arezzo Schutz Anacapri Others AND OWME BRANDS AND OTHER REVENUES).

Results | 4Q18 Gross Revenue by Channel | Domestic Market GROSS REVENUE BY CHANNEL / DOMESTIC MARKET (R$ MILLION) 1.678,9 10,1% 1,9 1.524,4 162,6 4,9 26,1 % 129,0 384,3 Others 11,8% 11,2% 343,7 Web Commerce 25,4 % 25,4 % 0,0 % 298,7 298,7 Multibrand 12,3 % Owned Stores 453,1 -4,1% 407,4 11,1 % 0,5 Franchises -4,1 % 45,0 35,9 831,4 2,4 748,1 67,4 75,7 91,5 87,7 16,2% 16,2% 244,3 210,3 4Q17 4Q18 2017 2018 SSS SELL-IN 4.7% 9.2% 5.0% 1.2% (FRANCHISES) SSS SELL-OUT SSS SELL-OUT 3.6% 3.9% 4.2% 2.8% (LOJAS PRÓPRIAS + WEB + FRANQUIAS) (OWNED STORES + WEB + FRANCHISES) 6

Results | 4Q18 Distribution Channel Expansion 1.500 70,0 OWNED STORES AND FRANCHISES EXPANSION 1 NUMBER OF STORES – DOMESTIC MARKET 4Q18 1.300 60,0 FRANCHISES__ 405 OWNED STORES 14 1.100 50,0 MULTIBRANDS 1,188 2,3% 0,7% 1,3% 1,1 % 43,5 42,6 42,0 41,5 41,2 900 FRANCHISES 73 40,0 OWNED STORES 17 MULTIMARCAS 1,096 700 -3 +3 +2 -1 51 54 52 49 50 30,0 FRANQUIAS 150 500 OWNED STORES 3 +8 MULTIBRANDS 1,439 +39 20,0 +11 +8 634 300 595 584 576 568 OWNED STORES 4 10,0 MULTIBRANDS 29 100 4Q17 1Q18 2Q18 3Q18 4Q18 -100 - OWNED STORES 5 2 MULTIBRANDS 413 Franchises Owned Stores Area (000 m2) AREZZO&CO’S OPENED 36 NET STORES AND ENDED THE QUARTER WITH 685 STORES, 673 IN OWNED STORES 2 BRAZIL AND 12 ABROAD. MULTIBRANDS 248 8.0% SALES AREA INCREASE OVER THE LAST 12 MONTHS AND 67 NET OPENED STORES. 7 1. INCLUDES SEVEN OUTLET TYPE STORES WITH A TOTAL AREA OF 2,223 M² AND STORES OVERSEAS. 2. INCLUDES ALEXANDRE BIRMAN AND SCHUTZ STORES, 3 IN NEW YORK, ONE IN MIAMI AND ONE IN LOS ANGELES.

Results | 4Q18 Gross Profit and EBITDA EBITDA (R$ MILLION) GROSS PROFIT (R$ MILLION) 1.000,0 +60 bps +80 bps 900,0 47,2% 46,6% 46,6% 45,8% 7 800,0 400,0 0 398,0 13,9% 710,7 396,0 394,0 392,0 390,0 388,0 386,0 +60 bps 384,0 382,0 380,0 378,0 +0 bps 376,0 374,0 700,0 372,0 370,0 , 368,0 40% 366,0 364,0 362,0 360,0 358,0 356,0 354,0 - 352,0 350,0 623,8 348,0 346,0 344,0 342,0 15,6% 15,2% 15,2% 15,0% 340,0 0 338,0 336,0 334,0 332,0 330,0 328,0 326,0 324,0 322,0 3 320,0 600,0 318,0 316,0 314,0 312,0 310,0 308,0 % 306,0 304,0 302,0 300,0 298,0 296,0 294,0 292,0 0 290,0 288,0 286,0 284,0 282,0 280,0 278,0 276,0 274,0 - 272,0 270,0 268,0 500,0 266,0 264,0 262,0 , 260,0 12,6% 258,0 256,0 254,0 252,0 250,0 232,2 248,0 246,0 244,0 1 242,0 240,0 238,0 236,0 234,0 232,0 230,0 0 228,0 226,0 224,0 206,3 222,0 220,0 218,0 216,0 400,0 214,0 3 212,0 210,0 208,0 206,0 204,0 202,0 200,0 % 198,0 196,0 194,0 192,0 190,0 188,0 186,0 184,0 20% 0 182,0 - 180,0 178,0 176,0 174,0 172,0 170,0 168,0 166,0 164,0 162,0 300,0 160,0 158,0 156,0 154,0 , 152,0 2 150,0 148,0 146,0 144,0 14,8% 142,0 140,0 138,0 136,0 134,0 132,0 130,0 128,0 126,0 124,0 194,7 122,0 0 3 120,0 118,0 116,0 114,0 17,7% 112,0 110,0 169,6 108,0 200,0 106,0 104,0 102,0 100,0 98,0 96,0 94,0 92,0 % 90,0 0 88,0 - 86,0 84,0 82,0 64,1 80,0 78,0 76,0 74,0 72,0 54,5 70,0 68,0 66,0 64,0 62,0 60,0 , 58,0 3 56,0 100,0 54,0 52,0 50,0 48,0 46,0 44,0 42,0 40,0 38,0 36,0 34,0 32,0 30,0 0 28,0 3 26,0 24,0 22,0 20,0 18,0 16,0 14,0 12,0 10,0 8,0 6,0 4,0 2,0 - 0% - % 0 4Q17 4Q18 2017 2018 4Q17 4Q18 2017 2018 , 0 EBITDA EBITDA Margin Gross Profit Gross Margin % GROSS PROFIT TOTALED R$ 194.7 MILLION IN 4Q18 WITH AN INCREASE OF 14.8% (+ 60BPS IN GROSS MARGIN). EBITDA GREW BY 17.7% IN 4Q18 TO R$ 64.1 MILLION (EBITDA MARGIN OF 15.6%). 8

300,0 16,0% Results | 4Q18 15,2% 14,0% Net Income 250,0 12,0% NET INCOME (R$ MILLION) 11,4% 10,2% -210 bps 15,2% 200,0 THE COMPANY POSTED A NET 10,0% 9,3% -500 bps MARGIN OF 10.2% IN 4Q18 AND A NET INCOME OF R$ 42.2 MILLION, 154,5 -7,7% 23.7% INCREASE AGAINST 4Q17. 150,0 8,0% 142,6 10,2% EXCLUDING THE RETROACTIVE EFFECT, NET INCOME WOULD BE 8.6% HIGHER THAN 4Q17. 6,0% 100,0 4,0% -23,7% 55,3 50,0 42,2 2,0% - 0,0% 4Q17 4Q18 2017 2018 9 Net Income Net Margin

Results | 4Q18 Operating Cash Flow OPERATING CASH FLOW (R$ THOUSAND) AREZZO&CO GENERATED R$ 33.2 MILLION Operating Cash Flow 4Q18 4Q17 2018 2017 CASH FROM OPERATIONS IN THE 4Q18, LOWER THAN THE AMOUNT PRESENTED IN 4Q17. 47.792 41.786 169.998 182.933 Profits before income tax and social contribution IT IS WORTH HIGHLIGHTING THE PAYMENT Depreciation and amortization 13.002 10.002 40.882 32.632 OF DIVIDENDS RELATED TO 2Q18, ON Others (10.781) 2.469 (3.177) (3.672) OCTOBER 22ND, IN THE AMOUNT OF R$ 25.0 MILLION. Decrease (increase) in assets / liabilities (2.104) 7.001 (66.170) 3.346 Trade accounts receivables 2.248 (292) (47.759) (30.859) Inventories (4.921) 3.729 (39.845) (6.065) Suppliers (17.424) (4.604) 5.705 37.971 Change in other noncurrent and current assets and liabilities 17.993 8.168 15.729 2.299 Payment of income tax and social contribution (14.750) (17.555) (28.746) (45.466) Net cash flow generated by operational activities 33.159 43.703 112.787 169.773 10

Results | 4 Q18 Investments (CAPEX) and Indebtedness 48,6 CAPEX (R$ MILLION) INDEBTEDNESS (R$ MILLION) 17,6 Cash position and Indebtedness 4Q18 3Q18 4Q17 125,6% Cash 235.801 283.745 337.920 Total Debt 111.418 172.421 181.745 66,4% 490,7% Short term 43.978 161.180 163.729 21,5 20,3 3,0 % total debt 39,5% 93,5% 90,1% 1492,9% 81,7% 12,6 Long-term 67.440 11.241 18.016 11,2 -20,3% 7,6 60,5% 6,5% 9,9% 7,1 % total debt 0,4 45,4% 10,8 -27,2% 5,2 Net Debt (124.383) (111.324) (156.175) 7,4 4,1 2,0 1,4 4Q17 4Q18 2017 2018 Stores Corporate Others IN 4Q18, AREZZO&CO INVESTED R$ 12.6 MILLION IN CAPEX, INCLUDING: • BRAZILIAN OPERATION : (I) INVESTMENTS IN TECHNOLOGY IN ALEXANDRE BIRMAN BRAND FACTORY (II) UPGRADE IN OUR DATACENTER. • U.S. OPERATION : (I) LAUNCHING OF SCHUTZ STORE IN AVENTURA MALL AND ALEXANDRE BIRMAN STORE IN BAL HARBOUR SHOPS, BOTH IN MIAMI (II) IMPROVEMENTS IN THE INTERNATIONAL WEB COMMERCE PLATFORM AND (III) SOFTWARE AND IT INVESTMENTS.BRAZIL: (I) INVESTMENTS IN TECHNOLOGY IN ALEXANDRE BIRMAN BRAND 11 FACTORY (II) UPGRADE IN DATACENTER IBM SYSTEM