9M16 Results October, 2016static.grendene.aatb.com.br/apresentacoes/1203_2016... · EBIT margin -...

9M16 Results October, 2016

2

Disclaimer

This presentation contains statements that can represent expectations about future events or results. These statements are based on certain suppositions and analyses made by the company in accordance with its experience, with the economic environment and market conditions, and expected future developments, many of which are beyond the company’s control. Important factors could lead to significant differences between real results and the statements on expectations about future events or results, including the company’s business strategy, Brazilian and international economic conditions, technology, financial strategy, developments in the footwear industry, conditions of the financial market, and uncertainty on the company’s future results from operations, plans, objectives, expectations and intentions – among other factors. In view of these aspects, the company’s results could differ significantly from those indicated or implicit in any statements of expectations about future events or results.

3

Agenda

Mission, Vision & Values

Dividends

Results

History

Capital Markets

Plants

Brands and Marketing

Capital expenditure (CAPEX)

Guidance

Footwear Sector

4

Innovation Agility Competitiviness

Profitability

Ethics

Mission

Vision

Val

ue

s To create democratic fashion, responding rapidly to the market’s needs, generating an attractive return for the company and its partners.

Being among the most profitable companies in the world and the leading organizations in the sector.

5

2.4%

4.3%

4.5%

5.0%

5.1%

5.4%

8.3%

8.4%

9.2%

10.2%

10.3%

11.3%

11.7%

12.9%

13.4%

13.7%

14.0%

14.2%

14.4%

15.4%

15.5%

15.6%

18.3%

0% 10% 20% 30%

Puma SE

Kingmaker Footwear …

Daphne International …

Rocky Brands Inc

Skechers USA Inc

Yue Yuen Industrial Holdings

Adidas

Stella International

Weyco Group Inc

Foot Locker Inc

Alpargatas

Usaflex

Le Saunda Holdings

Nike

Deckers Outdoor Corp

Calçados Jacob (Kildare)

Beira Rio

A. Grings S.A. (Piccadilly)

VF Corp (Timberland)

Arezzo

Steve Madden Ltd

Belle International Holdings

Grendene

EBIT margin - 2013

2.1%

2.8%

3.5%

4.3%

4.5%

5.3%

5.5%

6.1%

8.0%

8.8%

9.3%

9.6%

11.3%

11.3%

11.7%

12.6%

12.6%

12.8%

12.9%

13.2%

14.1%

15.4%

17.4%

17.9%

0% 10% 20% 30%




Puma SE



Rocky Brands Inc

Adidas


Skechers USA Inc

Alpargatas

Weyco Group Inc

Foot Locker Inc

Beira Rio


Steve Madden Ltd

Usaflex

Le Saunda Holdings


Nike

Arezzo


Grendene

Grendene (*)

EBIT margin - 2014

Sour

ce: G

rend

ene

/ Blo

ombe

rg /

Com

pani

es F

inan

cial

Sta

tem

ents

(6.0%)

(4.5%)

2.8%

3.9%

4.2%

5.0%

6.3%

7.3%

8.5%

8.9%

9.3%

11.1%

11.3%

11.5%

11.9%

12.2%

12.4%

12.6%

13.4%

13.6%

15.0%

15.5%

18.2%

20.7%

(10%) 0% 10% 20% 30%



Puma SE

Rocky Brands Inc


Yue Yuen Industrial …

Adidas



Alpargatas

Weyco Group Inc

Skechers USA Inc

Foot Locker Inc

Beira Rio

Usaflex

Steve Madden Ltd


Arezzo


Nike

Le Saunda Holdings


Grendene

Grendene (*)

EBIT margin - 2015

Profitability – EBIT margin (*) adjusted figures excluding the non-recurring effect – A3NP

6

(4.5%)

1.1%

2.5%

3.7%

3.9%

4.5%

4.6%

5.2%

5.7%

6.6%

6.8%

7.3%

7.4%

8.0%

8.0%

8.9%

10.0%

10.7%

10.7%

11.2%

11.9%

13.6%

25.0%

27.4%

(10%) 0% 10% 20% 30%


Puma SE

Rocky Brands Inc

Adidas



Yue Yuen Industrial …

Usaflex

Weyco Group Inc

Alpargatas


Foot Locker Inc

Skechers USA Inc


Steve Madden Ltd



Arezzo

Nike

Le Saunda Holdings


Beira Rio

Grendene

Grendene (*)

Net margin - 2015

0.2%

3.0%

3.0%

3.2%

5.2%

5.5%

5.7%

5.9%

6.4%

6.6%

8.0%

8.5%

9.0%

9.4%

9.8%

10.0%

10.2%

10.3%

10.5%

10.6%

11.5%

12.4%

19.8%

0% 10% 20% 30%

Puma SE

Skechers USA Inc

Rocky Brands Inc



Adidas


Weyco Group Inc

Usaflex

Foot Locker Inc



Alpargatas


Nike

Steve Madden Ltd

Le Saunda Holdings


Beira Rio


Arezzo


Grendene

Net margin - 2013

1.7%

2.2%

3.4%

3.4%

3.5%

4.1%

4.7%

5.8%

5.9%

7.3%

7.3%

7.5%

8.0%

8.4%

8.4%

8.5%

8.9%

9.7%

10.7%

10.9%

12.0%

14.1%

22.0%

22.1%

0% 10% 20% 30%


Puma SE

Adidas

Rocky Brands Inc




Skechers USA Inc

Weyco Group Inc


Foot Locker Inc

Alpargatas

Usaflex


Steve Madden Ltd



Nike

Arezzo

Beira Rio


Le Saunda Holdings

Grendene

Grendene (*)

Net margin - 2014

Sour

ce: G

rend

ene

/ Blo

ombe

rg /

Com

pani

es F

inan

cial

Sta

tem

ents

Profitability – Net margin

(*) adjusted figures excluding the non-recurring effect – A3NP

7 Source: Grendene / Bloomberg

172,8

333,4 317,5

334.6 352.5 344.5

368.8

58,9

92,8 113.7

128.2 148.5 148.1 141.3 152,2

208,4 187,3

362,8

399,2 399,9

454,7

-

50

100

150

200

250

300

350

400

450

500

2009 2010 2011 2012 2013 2014 * 2015 *

R$

mill

ion

Alpargatas

Arezzo

Grendene *

14.3%

16.2% 16.7%

14.9% 15.4% 10.5%

13.0% 12.6%

19.3%

18.3%

9.0%

14.9% 12.3%

11.1% 10.3%

17.9%

14.1%

9.3%

20.7%

12.6%

8.9%

EBIT and EBIT margin – Main companies in Brazil


8 Souce: Grendene / Bloomberg

125.9

306.3

307.4

280.0 310.0

280.2 272.3

48.7 64.5 91.6 96.9 110.6 112.8 119.7

272.2

312.4

305.4

429.0 433.5

493.7

603.0

-

100

200

300

400

500

600

700

2009 2010 2011 2012 2013 2014 * 2015 *

R$

mill

ion

Alpargatas

Arezzo

Grendene *

11.8% 11.3% 13.5% 11.3% 11.5%

18.7% 19.5%

20.6%

22.8% 19.8%

6.5%

13.7%

11.9%

9.3% 9.0%

22.1%

10.7%

7.5%

27.4%

10.7%

6.6%

Net profit and Net margin – Main companies in Brazil


9

Year (all amounts in thousand of

reais) Openning equity1 Profit Earnings Reinvestment Return on equity Closing equity1

2004 692,726 204,865 64,152 140,713 29.6% 733,566

2005 733.566 200,116 81,181 118,935 27.3% 847,373

2006 847,373 257,343 128,261 129,082 30.4% 998,510

2007 998,510 260,508 119,724 140,784 26.1% 1,132,718

2008 1,132,718 239,367 109,000 130,367 21.1% 1,274,080

2009 1,274,080 272,211 110,000 162,211 21.4% 1,430,569

2010 1,430,569 312,399 121,738 190,661 21.8% 1,624,542

2011 1,624,542 305,446 219,526 85,920 18.8% 1,713,743

2012 1,713,743 429.003 293,503 135,500 25.0% 1,848,309

2013 1,848,309 433,540 300,057 133,483 23.5% 1,957,295

2014 1,957,295 490,244 220,814 269,430 25.0% 2,232,649

2015 2,232,649 551,223 275,925 275,298 24.7% 2,520,866

Accumulated 3,956,265 2,043,881 1,912,384 971.5%

1) Equity adjusted by the exclusion of the balance of dividends payable.

Shareholder´s equity (R$) and return on equity (%)

10

Grendene´s history

70’

Grendene´s Foundation

Melissa Brand

80’

Own mold manufacturing plant

Rider Brand

90’

Factories in Ceará State

Grendha Brand

11

Grendene´s history

2000’

Grendene started having common shares (“GRND3”) negotiated at the

BM&FBOVESPA

Galeria Melissa São Paulo

Brands Ipanema, Zaxy and Cartago

2010’

Galeria Melissa NY

Galeria Melissa London

Casa Ipanema – Rio de Janeiro

Clube Melissa – Franchise stores in Brazil

12

0.363 0.366 0.405

0.730

0.976 0.998

0.736

0.868

0.549

0.674

46.6% 41.3% 39.9%

74.8% 71.1% 71.8%

46.1% 48.6% 47.4%

52.6%

7.0% 5.9% 4.7% 8.5% 8.4%

5.0% 4.8% 5.2% 4.4% 5.3%

2008 2009 2010 2011 2012 2013 2014 2015 9M15 9M16

%

R$

pe

r sh

are

Dividend + Net interest on Equity, per share Payout (*) Dividend yield (**)

(*) Payout: Dividend + Net Interest on Equity divided by profit after the allocations to legal reserves. (**) Dividend yield: Dividend per share + Net Interest on Equity per share in the period divided by the weighted average price of the share,

annualized.

Dividend Policy

The Company´s dividend policy is

distribute, as dividends – after

constitution of the Legal Reserve, and the Reserve under the Bylaws – that part of Profit that

does not arise from state tax

incentives.

13

Allocation of proceeds distributed / proposed

# Proceeds * Approval

Date Ex-proceeds

date Payment start

date Gross amount R$

Income tax on I.E. (15%) (**) R$

Net amount R$

1 I.E. 04/28/16 05/04/16 05/18/16 30,000,000.00 (4,500,000.00) 25,500,000.00

1 Dividend 04/28/16 05/04/16 05/18/16 51,190,824.65 0.00 51,190,824.65

2 Dividend 07/28/16 08/03/16 08/17/16 45,505,162.63 0.00 45,505,162.63

3 Dividend 10/20/16 10/28/16 11/16/16 76,093,053.01 0.00 76,093,053.01

Sum 202,789,040.29 (4,500,000.00) 198,289,040.29

Allocation of net profit (9M16) R$

Net profit for the period 387,535,329.59

( - ) Tax incentives reserve (174,073,181.92)

Basis of the Legal reserve 213,462,147.67

( - ) Legal reserve (10,673,107.38)

Dividends for 9M16 202,789,040.29

Dividends and Interest on Equity (I.E.)

( *) Proceeds approved “ad referendum” of the Ordinary General Meeting that considers the financial statements for the 2016 business year.

(**) There will be no withholding income tax for people who prove their condition of immune or relieved retention by law.

14

182.7 184.6 151.1 162.3 137.2 133.2 115.4

155.4

235.0 220.2 181.7 389.5

427.3 361.4 397.8

422.1

250.1 245.1 217.2

505.1

579.6 516.4

597.2 661.1

0

100

200

300

400

500

600

700

800

31

/12

/08

31

/03

/09

30

/06

/09

30

/09

/09

31

/12

/09

31

/03

/10

30

/06

/10

30

/09

/10

31

/12

/10

31

/03

/11

30

/06

/11

30

/09

/11

31

/12

/11

31

/03

/12

30

/06

/12

30

/09

/12

31

/12

/12

31

/03

/13

30

/06

/13

30

/09

/13

31

/12

/13

31

/03

/14

30

/06

/14

30

/09

/14

31

/12

/14

31

/03

/15

30

/06

/15

30

/09

/15

31

/12

/15

31

/03

/16

30

/06

/16

30

/09

/16

Bas

e 1

00

= 1

2/3

1/0

8

Evolution GRND3 vs. BOVESPA index – Dec. 31, 2008 up to Sep. 30, 2016

BOVESPA index GRND3 - No dividend reinvested GRND3 - With dividend reinvested

P/E – Share price divided by earnings per share in a 12 month period.

Last 52 weeks Date Share price Market capitalization Market capitalization – free-float

Minimum Jan. 21, 2016 R$ 14.60 R$ 4.4 billion R$ 1.2 billion

Maximum Oct. 09, 2015 R$ 18.70 R$ 5.6 billion R$ 1.5 billion

Price/Earnings (P/E): 12/31/08 – 5.32 12/31/09 – 10.99 12/31/10 – 8.97 12/31/11 – 7.57 12/31/12 – 11.56 12/31/13 – 12.55 12/31/14 – 9.39 12/31/15 – 9.20

Capital markets

15

Location of Industrial plants

Production capacity: 250,000,000 pairs / year

Sobral / CE Crato / CE Fortaleza / CE Teixeira de Freitas/BA Farroupilha / RS

Employees: Northeast region: 18,400

South region: 2,000

Sobral

Fortaleza

Crato

Teixeira de

Freitas

Farroupilha

Built area= 315.000 m2

Braz i l

16

24.2

35.4 33.0 39.4

63.6

154.0

119.1

73.2 70.2

52.1

-

20.0

40.0

60.0

80.0

100.0

120.0

140.0

160.0 2

00

8

20

09

20

10

20

11

20

12

20

13

20

14

20

15

9M

15

9M

16

R$

milL

ION

CAPEX

Modernization of the plant and better

efficiency of production

17

Footwear Sector

18

45% 19%

16%

9%

7% 3% 1%

Footwear Consumption by region (pairs 2014)

Asia

Europe

North and Central America

South America

Africa

Middle East

Oceania

82%

5%

2% 6%

4% 1% 0%

Footwear production by region (pairs 2014)

16.9 16.6 17.6 18.4 18.8 19.9 20.1 20.8

14.7 14.9 15.6 16.2 16.5 17.5 17.8 18.4

0

5

10

15

20

25

2008 2009 2010 2011 2012 2013 2014 2015 *

Evolution of worldwide procuction and consuption of footwear

(in billions pairs)

Production Consumption

Source: IEMI / WSR / Estimated by ABICALÇADOS

In the world ranking (2014) Brazil ranks as the 3rd largest producer and 4th in consumption.

Asia

Europe

North and Central America

South America

Africa

Middle East

Oceania

Footwear Sector - World

19

Footwear sector - Brazil

• World’s 3rd largest producer;

• About 7,700 producers;

• Exports: 124 million pairs to more than 150 countries;

• Production: 944 million pairs in 2015;

• 283,100 direct employees;

• Apparent consumption, Brazilian domestic market: 853 million pairs – 4.0 pairs per capita / year in 2015.

Sour

ce:

IEM

I/RA

IS/A

BIC

ALÇ

AD

OS/

SEC

EX

The footwear sector in Brazil is characterized by small companies and

labor-intensive, with no barriers to entry or exit.

20

Million pairs 2008 2009 2010 2011 2012 2013 2014 2015

Production 790 769 835 838 997 1.036 998 944

Imports 39 30 29 34 36 39 37 33

Exports 166 127 143 113 113 123 130 124

Apparent consumption 663 672 721 759 920 952 905 853

Per capita consumption (pairs) 3.5 3.5 3.7 3.8 4.6 4.7 4.5 4.2

Source: IBGE / SECEX / ABICALÇADOS

Note: We are presenting the production, apparent consumption and per capita consumption numbers for the years 2008 - 2014, due to updates and revisions of information sources.

Footwear Sector - Brazil

21

Sou

rce:

IEM

I / A

bic

alça

do

s /

Gre

nd

ene

790 769 835 838

997 1,036

998 944

-

200

400

600

800

1,000

1,200

20

08

20

09

20

10

20

11

20

12

20

13

20

14

20

15

*

Mill

ion

pai

rs /

ye

ar

Brazilian production CAGR (2015/2008): 2.6%

Change (2015/2014): (5.4%)

146

166 169

150

185

216 205

180

125 113

-

50

100

150

200

250

20

08

20

09

20

10

20

11

20

12

20

13

20

14

20

15

9M

15

9M

16

Mill

ion

pai

rs /

ye

ar

Grendene CAGR (2015/2008): 3.0%

Change (2015/2014): (12.0%) Change (9M16/9M15): (9.9%)

Grendene has grown above the average growth rate of the footwear

industry in Brazil.

Brazilian Footwear sector x Grendene

22

166

127

143

113 113 123

130 124

86 87

-

30

60

90

120

150

180

20

08

20

09

20

10

20

11

20

12

20

13

20

14

20

15

9M

15

9M

16

Mill

ion

pai

rs /

ye

ar

Brazilian exports CAGR (2015/2008): (4.1%)

Change (2015/2014): (4.2%) Change (9M16/9M15): 0.5%

48 48

55

43 45

51 52

46

31 29

-

10

20

30

40

50

60

20

08

20

09

20

10

20

11

20

12

20

13

20

14

20

15

9M

15

9M

16

Mill

ion

pai

rs /

ye

ar

Grendene CAGR (2015/2008): (0.6%)

Change (2015/2014): (12.0%) Change (9M16/9M15): (7.8%)

Sou

rce

: MD

IC /

Dec

ex /

Ab

ical

çad

os

/ G

ren

den

e

Grendene accounts for 33.1% of Brazilian footwear exported in

9M16 (36.0% in 9M15).

Exports:Brazil vs. Grendene

23

Brands & Marketing

Products that meet essential and basic needs at low cost.

Products for all the income levels: A, B, C, D and E – with

very good cost vs. benefit.

24

Marketing

Galeria Melissa Londres

Galeria Melissa New York

Showroom Milão

Clube Melissa

Galeria Melissa São Paulo

25

Marketing

http://www.google.com.br/url?sa=i&rct=j&q=&esrc=s&source=images&cd=&cad=rja&uact=8&ved=0ahUKEwij2uj5q8nPAhWDC5AKHbX2C5UQjRwIBw&url=http://produto.mercadolivre.com.br/MLB-746093138-vetores-imagens-show-da-luna-50-mil-vetores-_JM&psig=AFQjCNFNA4rWzFgy4xO-qUY35okdtTkPvA&ust=1475952019574681

26

Sales channels

Strong relationship with trade

27

Results (in IFRS)

28

Receita bruta Consolidada

Domestic market: R$ 519.5 million (6.7%)

Exports: R$ 134.5 million (24.2%)

Lucro líquido Consolidado

R$ 150.9 million 10.7%

EBIT R$ 107.5 million (16.9%)

Margin 20.0% (1.0 p.p.)

Câmbio Negative impact: R$ 12.5 million

Volume Domestic market: 34.3 million pairs (6.8%)

Exports: 10.2 million pairs 1.1%

Preço médio

Domestic market R$ 15.13 0.2%

Exports R$ 13.15 (25.1%)

US$ 4.05 (18.2%)

Exchange

Average price

Net profit

EBIT

Volumes

Gross revenue

Highlights 3Q16 (YoY 2015)

29

Receita bruta Consolidada

Domestic market: R$ 1,295.1 million (5.4%)

Exports: R$ 424.7 million (8.7%)

Lucro líquido Consolidado

R$ 387.5 million 6.8%

EBIT R$ 244.4 million (13.8%)

Margin 17.2% (1.4 p.p.)

Câmbio Positive impact: R$ 47.1 million

Volume Domestic market: 84.3 million pairs (10.6%)

Exports: 28.8 million pairs (7.8%)

Preço médio

Domestic market R$ 15.36 5.9%

Exports R$ 14.77 (1.0%)

US$ 4.15 (12.1%)

Exchange

Average price

Net profit

EBIT

Volumes

Gross revenue

Highlights 9M16 (YoY 2015)

30

R$ Millions 2008 2009 2010 2011 2012 2013 2014* 2015* Change %

15-14 CAGR

(15-08) 9M15* 9M16

Change 9M16/ 9M15

Gross revenue 1,576.0 1,819.4 1,998.6 1,831.6 2,324.5 2,711.4 2,719.4 2,630.0 (3.3%) 7.6% 1,833.7 1,719.8 (6.2%)

Domestic market 1,220.5 1,464.4 1,603.8 1,489.9 1,845.4 2,146.9 2,077.7 1,899.2 (8.6%) 6.5% 1,368.6 1,295.1 (5.4%)

Exports 355.5 355.0 394.8 341.7 479.1 564.5 641.7 730.8 13.9% 10.8% 465.1 424.7 (8.7%)

Net revenue 1,249.9 1,455.8 1,604.5 1,481.1 1,882.3 2,187.3 2,232.4 2,201.1 (1.4%) 8.4% 1,526.2 1,419.2 (7.0%)

Cost of sales (731.2) (889.7) (953.3) (840.5) (1,000.2) (1,193.6) (1,206.8) (1,135.1) (5.9%) 6.5% (810.1) (747.0) (7.8%)

Gross profit 518.7 566.0 651.2 640.6 882.1 993.7 1,025.6 1,066.0 3.9% 10.8% 716.1 672.1 (6.1%)

EBIT 165.9 152.2 208.4 187.3 362.8 398.9 399.9 454.7 13.7% 15.5% 283.6 244.4 (13.8%)

EBITDA 191.5 178.5 236.6 216.2 394.5 435.5 447.3 507.0 13.3% 14.9% 323.7 287.6 (11.1%)

Net income 239.4 272.2 312.4 305.4 429.0 433.2 493.7 603.0 22.1% 14.1% 362.7 387.5 6.8%

Margins % 2008 2009 2010 2011 2012 2013 2014* 2015* Change 15-14 (p.p.)

Change 15-08 (p.p.)

9M15* 9M16

Change 9M16/ 9M15 (p.p.)

Gross 41.5% 38.9% 40.6% 43.3% 46.9% 45.4% 45.9% 48.4% 2.5 6.9 46.9% 47.4% 0.5

EBIT 13.3% 10.5% 13.0% 12.6% 19.3% 18.2% 17.9% 20.7% 2.8 7.4 18.6% 17.2% (1.4)

EBITDA 15.3% 12.3% 14.7% 14.6% 21.0% 19.9% 20.0% 23.0% 3.0 7.7 21.2% 20.3% (0.9)

Net 19.2% 18.7% 19.5% 20.6% 22.8% 19.8% 22.1% 27.4% 5.3 8.2 23.8% 27.3% 3.5

Main Indicators (*) adjusted figures excluding the non-recurring effect – A3NP / CAGR (7 years)

31

Gross sales revenue Domestic market

CAGR (15-08): 6.5% Change (15-14): (8.6%)

Change (9M16-9M15): (5.4%)

1,220

1,464 1,604

1,490

1,845

2,147 2,078 1,899

1,369 1,295 20

08

2009

2010

2011

2012

2013

2014

*

2015

*

9M15

9M16

356 355 395

342

479

564

642

731

465 425

2008

2009

2010

2011

2012

2013

2014

*

2015

*

9M15

9M16

Gross sales revenue Exports

CAGR (15-08): 10.8% Change (15-14): 13.9%

Change (9M16-9M15): (8.7%)

1,576 1,819

1,999 1,832

2,324

2,711 2,719 2,630

1,834 1,720

2008

2009

2010

2011

2012

2013

2014

*

2015

*

9M15

9M16

Gross sales revenue Total

CAGR (15-08): 7.6% Change (15-14): (3.3%)

Change (9M16-9M15): (6.2%)

Note: CAGR 7 years

Gross sales revenue– R$ million (*) adjusted figures excluding the non-recurring effect – A3NP / CAGR (7 years)

32

77.4% 80.5% 80.2% 81.3% 79.4% 79.2% 76.4% 72.2% 74.6% 75.3%

22.6% 19.5% 19.8% 18.7% 20.6% 20.8% 23.6% 27.8% 25.4% 24.7%

2008 2009 2010 2011 2012 2013 2014 2015 9M15 9M16

Gross sales revenue

Domestic Market Exports

67.3% 70.9% 67.8% 71.7% 75.5% 76.6% 74.5% 74.5% 75.2% 74.6%

32.7% 29.1% 32.2% 28.3% 24.5% 23.4% 25.5% 25.5% 24.8% 25.4%

2008 2009 2010 2011 2012 2013 2014 2015 9M15 9M16

Sales volume

Domestic market Exports

Market %

33

166 152

208 187

363 399 400

455

284 244

13.3%

10.5% 13.0% 12.6%

19.3% 18.2% 17.9%

20.7% 18.6%

17.2%

2008

2009

2010

2011

2012

2013

2014

*

2015

*

9M15

9M16

EBIT / EBIT Margin CAGR (15-08): 15.5%

Change (15-14): 13.7% Change (9M16-9M15): (13.8%)

EBITDA / EBITDA margin CAGR (15-08): 14.9%

Change (15-14): 13.3% Change (9M16-9M15): (11.1%)

191 178

237 216

395 436 447

507

324 288

15.3%

12.3% 14.7% 14.6%

21.0% 19.9% 20.0%

23.0% 21.2% 20.3%

2008

2009

2010

2011

2012

2013

2014

*

2015

*

9M15

9M16

Improvement of internal processes to generate value.

EBIT/EBITDA – R$ million (*) adjusted figures excluding the non-recurring effect – A3NP / CAGR (7 years)

34

48 48

55

43 45

51 52

46

31 29

2008

2009

2010

2011

2012

2013

2014

2015

9M15

9M16

Sales volume – Exports CAGR (15-08): (0.6%)

Change (15-14): (12.0%) Change (9M16-9M15): (7.8%)

146 166 169

150

185

216 205

180

125 113

2008

2009

2010

2011

2012

2013

2014

2015

9M15

9M16

Sales Volume - Total CAGR (15-08): 3.0%

Change (15-14): (12.0%) Change (9M16-9M15): (9.9%)

99

117 115 108

140

166 153

134

94 84

2008

2009

2010

2011

2012

2013

2014

2015

9M15

9M16

Sales volume – Domestic market

CAGR (15-08): 4.5% Change (15-14): (12.0%)

Change (9M16-9M15): (10.6%)

World presence: more than 100 countries

Production (millions pairs) CAGR (7 years)

35

Operating cash generation

2009 2010 2011 2012 2013 2014 2015 Change

R$ (15-14) Change %

(15-14) CAGR

(15-09) 09/30/15 (9M15)

09/30/16 (9M16)

Change % (9M16-9M15)

Profit for the year/period 272,211 312,399 305,446 429,003 433,540 490,244 551,223 60,979 12.4% 12.5% 348,142 387,129 11.2%

Depreciation 26,307 28,173 28,917 31,725 36,648 47,461 53,652 6,191 13.0% 12.6% 40,830 43,215 5.8%

Other (68,676) (87,399) (94,025) (71,934) (50,204) (78,417) (146,029) (67,612) 86.2% 13.4% (69,235) (128,368) 85.4%

Cash generation by changes in assets and liabilities (66,756) (6,243) (172,191) (196,158) (116,679) 25,671 (16,128) (41,799) (162.8%) (21.1%) 47,500 237,647 400.3%

Trade receivables (130,878) 34,930 (106,354) (189,938) (82,337) 2,387 54,355 51,968 2,177.1% 0.0% 152,100 231,413 52.1%

Inventories (6,452) (1,107) 4,378 (30,194) (33,139) (10,298) (49,121) (38,823) 377.0% 40.3% (85,369) (5,821) (93.2%)

Suppliers 22,036 (8,322) (4,676) 29,795 (17,014) (3,505) 8,616 12,121 (345.8%) (14.5%) 7,436 (12,238) (264.6%)

Change in other assets and liabilities 48,538 (31,744) (65,539) (5,821) 15,811 37,087 (29,978) (67,065) (180.8%) 0.0% (26,667) 24,293 (191.1%)

Net cash provided by operating activities 163,086 246,930 68,147 192,636 303,305 484,959 442,718 (42,241) (8.7%) 18.1% 367,237 539,633 46.9%

Solid capital structure and strong cash generation

Net cash provided by operating atictivities

36

800 794 1,031

916 874 734

996

1,282

1,610

(224) (141) (181) (111) (138) (118) (171) (213)

(109)

576 654 849 805 736

616 825

1,069

1,501

2008 2009 2010 2011 2012 2013 2014 2015 9M16

R$

mill

ion

Cash and cash equivalents and financial investments (short- and long-term)

Borrowings (short- and long-term)

Net cash

Cash and cash equivalents and financial investments (short- and long-term), borrowings (short- and long-term)and net cash

37

Less labor intensive

More capital intensive

Higher entry barriers

Highly marketing intensive

Strategy: Break paradigms

Our expertise of more than 45 years producing

innovative footwear and generating desired brands,

shows the success of our vision of the market, our strategy and our business

model – and our capacity to create value for

stockholders.

38

Value proposition

Brands

Products Marketing Management

Constant creation of products

Innovative design

Manufacturing technology

Few products in large scale

Aggresive marketing

Segmentation

Investment in media / events

Strong relationship with trade

Scale gains, scope gains

Profitability

Continuous improvement

Financial solidity

Sustainable growth

Value for Stakeholders

Cartoons characters, celebrities and successful designers

39

Melissa

Brand: Melissa

Competitors:

Arezzo, Schultz, Grudy,

Flor de Mel, Cravo e Canela.

Vitorino Campos

Vivienne Westwood

Jason Wu Jeremy Scott

40

Women

Brands: Grendha and

Zaxy.

Licenses: Ivete Sangalo

Competitors:

Via Marte, Beira Rio, Ramarim,

Dakota, Picadilly, Via

Uno, Anacapri, Usaflex.

41

Men

Brands: Rider and Cartago

Licenses: Guga

Küerten, Bad Boy, Mormaii

Competitors:

Kenner, Beira Rio, Alpargatas,

Itapuã, Free-Way.

42

Kids

Own brands: Grendene Kids and

Zizou

Licenses:Ben 10, Hello Kitty, Disney,

Hot Wheels, Barbie, Angry

Birds entre outras

Competitors:

Klim, Bibi, Pampily, Bical,

Pé com Pé, Marisol

http://www.google.com.br/url?sa=i&rct=j&q=&esrc=s&frm=1&source=images&cd=&cad=rja&uact=8&ved=0ahUKEwiH4vHwjfrKAhUFjZAKHeaHCf0QjRwIBw&url=http://www.alexandrecolombo.com/&bvm=bv.114195076,d.Y2I&psig=AFQjCNEUAG9APGm91LLqHnS0MvUYUs4cZQ&ust=1455637309915637

43

Mas Market

Brand: Ipanema

Competitors:

Alpargatas, Dupé, Balina,

Beira-Rio

http://www.google.com.br/url?sa=i&rct=j&q=&esrc=s&frm=1&source=images&cd=&cad=rja&docid=xCyApIF25_0jAM&tbnid=52cAZOxFkYKbxM:&ved=0CAUQjRw&url=http://www.brandsoftheworld.com/logo/ipanema-sandals&ei=LAF0Us7JMO3isASrl4GYBA&bvm=bv.55819444,d.dmg&psig=AFQjCNHMo1NnrDKXyPwacxMJgaCBjlTjoA&ust=1383420573453581

44

Guidance 8% a.a.

Guidance 12% a.a.

1,576 1,819

1,999

1,847

2,324

2,711 2,719

2,630

1,000

2,000

3,000

4,000

5,000

2008 2009 2010 2011 2012 2013 2014 * 2015 * 2016 2017 2018

R$

mill

ion

s

Gross sales revenue

Guidance 8% a.a. Guidance 12% a.a. Realizead

We expect in this period to have some years with higher growth than these rate, as happened in 2009 and other years with lower growth, but on average we intend to achieve these targets.

Guidance (*) adjusted figures excluding the non-recurring effect

45

Guidance 12% a.a.

Guidance 15% a.a.

239 272 312

305

429

433 494

603

200

400

600

800

1,000

2008 2009 2010 2011 2012 2013 2014 * 2015 * 2016 2017 2018

R$

mill

ion

s

Net Income

Guidance 12% a.a. Guidance 15% a.a. Realized


Guidance (*) adjusted figures excluding the non-recurring effect

46

Targets for:

2008-2015 extended through 2018

Advertising expenses:

average 8% - 10% of net revenue in this period.

Gross revenue

growth at a compound

annual growth rate

(CAGR) between 8%

and 12%.

Profit growth at a

compound annual

growth rate (CAGR)

between 12% and 15%.


47

CAPEX – in 2016 we expect to invest between R$ 80 mn and R$ 90 mn.

Guidance - 2016

48

Thank you!

IR Team Francisco Schmitt

CFO & IRO (55 54) 2109.9022

Secretary Cátia Gastmann

(55 54) 2109.9011

Analysts Lenir Zatti / Alexandre Vizzotto

Further information Internet: http://ri.grendene.com.br

Email: [email protected]

http://ri.grendene.com.br/

mailto:[email protected]

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