| Apresentao do Roadshow 4Q10 and 2010 Conference Call 1 Important - - PowerPoint PPT Presentation

| Apresentação do Roadshow

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4Q10 and 2010 Conference Call

Important Disclaimer

The information contained here may include forward-looking information and reflects the executive office’s current perception and prospects for the macroeconomic environment, the industry situation, the Company's performance and financial results. Any statements, expectations, capacities, plans and projections contained here which do not describe historical facts, such as information about the dividend payment statement, the future course of operations, the introduction of relevant financial strategies, the investment program and the factors or trends affecting the financial condition, liquidity or the operating results are considered forward-looking information as defined by the “U.S. Securities Litigation Reform Act” of 1995 and involve a number of risks and uncertainties. These results are not guaranteed to

• materialize. These statements 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 factors may lead to real results materially different from the current expectations. The consolidated financial information of Arezzo Indústria e Comércio S/A – Arezzo&Co presented here complies with the International Financial Reporting Standards – IFRS, issued by the International Accounting 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.

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4Q10 and 2010 Highlights

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33 new stores in 2010, leading to a 296 store chain at 2010-close. Sales area expanded by 17.7% in 2010 Area Expansion Net Income amounted to R$64.5 million, up 32.4% from 2009 Net Income 17.7% EBITDA Margin in 4Q10. In 2010, EBITDA amounted to R$95.5 million, a 57.7% year-

• ver-year rise combined with 16.7% margin

EBITDA Net Revenues increased by 26.6% in 4Q10 and 38.7% year-over-year Net Revenues ROIC stood at 42.5% in 2010, compared to 39.9% in 2009 ROIC

160.7 204.9 468.8 662.5 10.4 13.9 44.2 50.4 4Q09 4Q10 2009 2010 DM EM

171.0 218.9 513.0 712.9

34.4% 14.0% 27.5% 41.3% 28.0% 39.0%

The Company’s Gross Revenues amounted to R$712.9 million, a 39.0% year-over-year rise

Company Growth

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Gross Revenues – DM¹ and EM² (R$ milllion)

¹ DM:Domestic Market. ² EM: Export Market.

86.8 111.1 260.9 358.7 27.8 37.5 70.4 110.0 44.4 56.0 133.7 188.4 1.6 0.3 3.7 5.4 4Q09 4Q10 2009 2010 Franchises Own Stores Multi-Brand Others - DM¹

204.9 160.7 468.8 662.5

27.9% 34.9% 26.1% 27.5% 37.5% 56.2% 40.9% 41.3%

Significant growth among all the distribution channels, both in 4Q10 and 2010

Gross Revenues Breakdown by Channel

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Gross Revenues by channel – Domestic Market (R$ million)

¹Others: Others channels in Domestic Market. Growth of -79,8% and 46,5% from 4Q09-4Q10 and 2009-2010. ²SSS Own Stores (Sell out); SSS Franchisees (Sell In).

SSS² Own Stores 48.2% 4.7% 28.9% 17.6% Franchise 13.0% 17.2% 3.7% 29.1%

117.4 149.4 350.8 479.2 41.1 53.7 111.1 173.1 2.2 1.9 6.9 10.2 4Q09 4Q10 2009 2010 Arezzo - DM Schutz - DM Other Brands - DM¹

160.7 204.9 468.8 662.5

27.3% 30.5% 36.6% 55.8% 41.3% 27.5%

Strong growth for the main brands with special performance delivered by Schutz, presenting a 55.8% year-over-year gross revenues increase

Gross Revenues Breakdown by Brand

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Gross Revenues by brand – Domestic Market (R$ million)

¹Others: Other Brands in Domestic Market. Growth of -13,8% and 49,1% from 4Q09-4Q10 and 2009-2010

We ended 2010 with a 296 store chain. Sales area expanded by 17.7%, totaling an increase

• f 2.6 thousand m²

1 Own Stores + 18 Multi-brand clients 266 franchises+ 10 Own Stores + 3 outlets + 715 Multi-brand clients 1 franchise + 10 Own Stores + 1343 Multi-brand clients

Distribution Channel Expansion

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TOTAL

267 Franchises + 26 Own Stores + 3 outlets + 1,585 Multi-brand clients = 1,881 points of sale

5 Own Stores

Own Stores and Franchises Expansion Note: area given in thousand m² 208 227 242 267 6 10 21 29 11.7 13.3 14.9 17.6 2007 2008 2009 2010 Franchisees Own Stores Area

214 237 263 296

13.2% 12.5% 17.7% +23 +26 +33

57.6 68.2 166.8 231.6

41.7% 39.0% 40.5% 40.5% 4Q09 4Q10 2009 2010 18.3% 38.9%

Gross Profit and Gross Margin

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Gross Income (R$ million) and Gross Margin (%)

Gross Margin in 4Q10 decreased by 2.7 p.p. as a result of exports margin fluctuation and year-end CRM initiatives. In 2010 Gross Margin stood stable compared to 2009

21.1 31.0 60.5 95.5

15.3% 17.7% 14.7% 16.7% 4Q09 4Q10 2009 2010 57.7% 47.1%

Expressive EBITDA and EBITDA Margin growth, both in 4Q10 and 2010 (2.47 p.p. and 2.02 p.p, respectively)

EBITDA and EBITDA Margin

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EBTIDA (R$ million) and EBITDA Margin (%)

Net Income and Net Margin

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2010 Net Income amounted to R$64.5 million, a year-over-year increase of 32.4%

Net Income (R$ million) and Net Margin (%)

20.9 21.5 48.7 64.5

15.2% 12.3% 11.8% 11.3% 4Q09 4Q10 2009 2010 2.8% 32.4%

Cash Generation

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Operating cash consumption in 4Q10 is a result of the increase of sales and higher working capital needs due to strategic inventories and imports

Operating Cash Generation (R$ thousand)

Cash flows from operating activities 4Q09 4Q10 Variation 2009 2010 Dif. Income before income taxes 20,085 29,531 9,446 58,852 89,289 30,437 Depreciation and amortization 483 823 340 1,655 2,670 1,015 Other (1,560) 976 2,536 (7,261) 1,735 8,996 Decrease (increase) in assets (13,752) (24,533) (10,781) (25,743) (57,730) (31,987) Trade accounts receivable (14,405) (20,709) (6,304) (13,218) (29,170) (15,952) Inventories 3,125 2,536 (589) (6,914) (27,657) (20,743) Recoverable taxes (1,333) (5,410) (4,077) (1,810) (4,063) (2,253) Other current assets (391) (510) (119) (2,387) 3,108 5,495 Judicial deposits (335) (491) (156) (1,382) 47 1,429 Other receivables (413) 51 464 (32) 5 37 (Decrease) increase in liabilities 3,917 (5,700) (9,617) 24,889 9,035 (15,854) Trade accounts payable (7,652) (14,615) (6,963) 12,483 (330) (12,813) Labor liabilities 5,314 (2,084) (7,398) 6,052 2,843 (3,209) Tax and contributions 6,194 10,696 4,502 6,077 7,719 1,642 Other current liabilities 61 303 242 277 (1,197) (1,474) Tax and contributions (2,966) (11,695) (8,729) (12,481) (24,542) (12,061) Net cash generated by operating activities 6,207 (10,598) (16,805) 39,911 20,457 (19,454)

4.7 2.7 8.9 7.9 0.9 3.0 1.9 5.8 0.1 0.4 0.3 1.7 4Q09 4Q10 2009 2010 Own Stores Corporate Others

11.1 15.4 5.8 6.1

In 2010, capital expenditure amounted to R$15.4 million, out of which R$7.9 million in Own Stores expansion

Capital Expenditure (CAPEX)

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CAPEX (R$ million)

ROIC

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Increase of 2.6pp in ROIC as a result of our conservative business model and capital discipline

ROIC¹ (%)

¹ Return over Invested Capital

39.9% 42.5%

2009 2010 +2.6 p.p

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Perspectives

We are confident on 2011 perspectives:  Expansion plan with 38 new openings in 2011;  Arezzo brand continues to perform as expected:  Increase of Same Stores productivity;  Area expansion of existing stores;  Ongoing product line diversification growth;  Launch of Schutz Go-to-Market project:  Assess full potential of retail and Own Stores and Franchises’ strategy;  Increase share-of-wallet and capillarity within Multi-Brand distribution channel;  Launch of Anacapri Multi-Brand distribution initiative and Own Store pilot project maturation.

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Contacts

 Thiago Borges  Daniel Maia

Phone: +55 11 2132-4300 ri@arezzoco.com.br www.arezzoco.com.br

CFO and IR Officer IR Manager