great m&a opportunities identification BRAZILIAN footwear ... · Brazilian footwear industry is...
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great m&a opportunities identification BRAZILIAN footwear INDUSTRY OVERVIEW
2009-2011
P U B L I S H E R ’ S R E V I E W
PUBLISHER’S REVIEW Despite increasing imports, potential threat of Chinese competition and non-attractive industry’s ratios (5,35x Debt-to-EBITDA average ratio for instance) Brazilian footwear industry is growing and presents excellent acquisition opportunities. Sector averages suffered significant influence of the results of Vulcabrás Azaléia’s, which represents almost 12% of sector revenues. In this section we’ve pointed our opinion on companies we’ve analyzed. Full companies information is available along this same report.
BUY AND BUILD OPPORTUNITIES
Usaflex Private Company Very high growth, regular margins, high Debt-to-EBITDA, liquidity concerns Company sales grew from BRL 139m to BRL 245m from 2009 to 2011. Its EBITDA margin suffered a bit, going from 15,6% to 12,1%, however still keeping it high if compared to the sector (7,8% average). Liquidity is a concern and debt is starting to become. General Liquidity Ratio is 1,33, pretty low if compared to the sector’s 2,3. Debt-to-EBITDA reaches 3,39x, which is not catastrophic but demonstrate financial needs. Financial expenses are troubling its Income Statement. Great acquisition opportunity.
LEVERAGED BUY-OUT (LBO) OPPORTUNITIES
Dakota Private Company Growing, very high margins, low Debt-to-EBITDA From 2009 to 2011 its EBITDA has almost tripled, growing from BRL 7,8m to BRL 20m, however its short term liquidity ratios had suffered a bit. Its Current Ratio went from 6,76 to 4,55 (industry achieved 2,65 in 2011) in the same period and Cash Ratio from 1,25 to 0,53. Its EBITDA in 2011 was of 24,1%, against industry’s 7,8%., and Debt-to-EBITDA was of 0,5x, against industry’s 5,35x.
Low debt, high margins and considerable growth seem like an interesting combination for an LBO.
Calçados Beira-Rio Private Company Very high growth, regular margins, low Debt-to-EBITDA Its revenues almost doubled from 2009 to 2011, going from BRL 525m to BRL 957m. EBITDA margin rose to 17,5% in 2010 and decreased back to 14,0% in 2011. Short term liquidity worsened with Cash Ratio going from 0,53 to 0,42 and Current Ratio going from 3,87 to 3,41. However, Debt-to-EBITDA remained low (1,37x in 2011 against sector’s 5,35x). Might be an opportunity of acquiring a good company through leverage. Going public to balance the debt afterwards might also be an option.
Grendene Public Company Stable sales, regular EBITDA growth, high margins, low Debt-to-EBITDA Sales remained steady from 2009 to 2011, however profit margin and EBITDA grew 12% and 21% respectively. Debt-to-EBITDA is on 1,13. Apart from being a public company, has good LBO characteristics and could be an interesting public-to-private transaction.
A. Grings (Piccadilly) Private Company Status: High growth, high margins, low Debt-to-EBITDA Revenues went from BRL 186m to BRL 300m from 2009 to 2011, while EBITDA margin went from 10% to 15%. Liquidity seems controlled. Might be a good opportunity of LBO.
Calçados Jacob Private Company High growth, growing EBITDA and profit, low leverage Revenues grew 63% from 2009 to 2011, EBITDA margins went from -4% to 8,4%. Debt is controlled (1,5x EBITDA). Apparently nice ingredients for an LBO.
However, since EBITDA is not a superstar (industry is at 7,8%, with Vulcabrás Azaléia pushing it down), might be an opportunity for a blended LBO/Turn Around strategy.
TURN AROUND OPPORTUNITIES
Cambuci Public company Growing, regular margins, high Debt-to-EBITDA The company’s revenues grew 25% from 2009 to 2011, however profit margins went exponentially down, together with its EBITDA. It’s Debt-to-EBITDA ratio is pretty high, reaching 9x and its Debt Ratio is 104%, against a 43% industry average. Despite this scenario, its EBITDA and profit margins are still over average. In case its debt liquidated, company’s profit would increase from 1,5% to 7,5%, also creating a positive impact on company value.
DISTRESSED ASSETS
Vulcabrás Azaléia Public Company Steady sales, negative margins, high leverage From 2009 to 2011 revenues were steady, margins went down, leverage rose. Negative EBITDA and considerable debt. We see it as a distressed asset. Might be an opportunity for identifying worse performing divisions, liquidating them and trying to pull a turn around.
I N D U S T R Y ’ s I N F O R M A T I O N
INDUSTRY’s STATISTICS
Source: Abicalçados 2011
Source: Abicalçados 2011
10.233,20 9.485,40
12.345,30 12.994,70
-
2.000,00
4.000,00
6.000,00
8.000,00
10.000,00
12.000,00
14.000,00
2008 2009 2010 2011
Industry's Revenues in millions of USD
12,54 11,66 13,81
15,86
-
5,00
10,00
15,00
20,00
2008 2009 2010 2011
Average price for a pair of shoes USD
Source: Abicalçados 2011
Source: Abicalçados 2011
83,40 80,80 88,20 81,1
232,30 238,20 252,70 237,5
439,60 436,00 487,40
433,9
60,70 58,60 65,60
66,5
-
100,00
200,00
300,00
400,00
500,00
600,00
700,00
800,00
900,00
1.000,00
2008 2009 2010 2011
Production (by type) in millions of pairs
Shoes made of other materials
Plastic/Rubber Shoes
Leather Shoes
Sports Shoes
1.574
1.064 1.183
868
-
200
400
600
800
1.000
1.200
1.400
1.600
1.800
2008 2009 2010 2011
Trade Balance millions of USD
Source: Klooks Brazilian Shoes Research 2011
Source: Klooks Brazilian Shoes Research 2011
14,3% 15,3%
7,8%
0,0%
5,0%
10,0%
15,0%
20,0%
2.009 2.010 2.011
Industry's EBITDA Margin
36,6%
37,6%
34,7%
33,0%
33,5%
34,0%
34,5%
35,0%
35,5%
36,0%
36,5%
37,0%
37,5%
38,0%
2009 2010 2011
Industry's Gross Margin
Source: Klooks Brazilian Shoes Research 2011
INDUSTRY RATIOS
Source: Klooks Brazilian Shoes Research 2011
42%
40%
43%
39% 39% 40% 40% 41% 41% 42% 42% 43% 43% 44%
2009 2010 2011
Índustry's Debt Ratio
Return Rat ios 2009 2010 2011 EBITDA Margin 14,3% 15,3% 7,8% Gross Margin 36,6% 37,6% 34,7% Profit Margin 5,2% 7,8% 1,5% Return on Assets (ROA) 5,36% 8,37% 1,59% Return on Capital Employed (ROCE) 16,2% 18,5% 9,1% Return on Equity (ROE) 9,3% 14,1% 2,8%
E f f ic iency Rat ios 2009 2010 2011 Inventory Turnover 9,7 8,8 7,9 Accounts Receivable Turnover 3,3 3,7 3,5 Assets Turnover 1,0 1,1 1,0
L iqu id i ty Rat ios 2009 2010 2011 Cash Ratio 0,82 0,98 0,87 Current Ratio 2,72 2,71 2,65 Quick Ratio 2,29 2,24 2,16 General Liquidity Ratio 2,35 2,46 2,30
Debt Rat ios 2009 2010 2011 Debt Ratio 43% 41% 43% Debt-to-EBITDA 2,90 2,46 5,35
C o m p a n i e s I N F O R M A T I O N
VULCABRÁS AZALÉIA Shoe design, manufacturing and branding Specialty: sports shoes, women and men leather shoes, rubber sandals Jundiaí - SP
GENERAL INFORMATION Established in Jundiaí, in the countryside of the state of São Paulo, Vulcabrás Azaléia self names itself as the largest Brazilian company in the sector of sports and women's shoes, and sports clothing, counting with the following brands: Azaléia, AZ, Dijean, Funny, Opanka, OLK, Olympikus, Reebok and Vulcabras. Foundation Date: 01/07/1966
Address: AV ANTONIO F OZANAM, 1440, DA GRAMA - Jundiaí (SP) CNPJ: 50.926.955/0001-42
Company type: Public Auditing: KPMG
Information source: CVM and Klooks Files
BRANDS
MAIN EXECUTIVES Milton Cardoso dos Santos Filho
CEO
Ademir Anildo Dreger
CTO Edivaldo Rogerio de Brito
CFO
Eduardo Pereira Lara
COO Flavio de Carvalho Bento
CIO
Marco Antonio Sa Martins
COO - Argentina Pedro Bartelle
CMO
FINANCIAL RATIOS
Return Rat ios 2009 2010 2011 Industry
2011 EBITDA Margin 18,0% 14,8% -15,6% 7,8% Profit Margin 4,7% 7,2% -20,7% 1,5% Return on Assets (ROA) 4,64% 8,76% -20,44% 1,6% Return on Capital Employed (ROCE) 24,0% 19,3% -27,0% 9,1% Return on Equity (ROE) 16,7% 26,7% -148,5% 2,8%
E f f ic iency Rat ios 2009 2010 2011
Industry 2011
Inventory Turnover 10,1 8,7 5,6 7,9 Accounts Receivable Turnover 2,9 3,6 3,5 3,5 Assets Turnover 1,0 1,2 1,0 1,0
L iqu id i ty Rat ios 2009 2010 2011
Industry 2011
Cash Ratio 0,15 0,08 0,04 0,87 Current Ratio 1,51 1,50 1,27 2,65 Quick Ratio 1,26 1,14 0,86 2,16 General Liquidity Ratio 1,38 1,49 1,16 2,30
Debt Rat ios 2009 2010 2011
Industry 2011
Debt Ratio 72% 67% 86% 43%
18,0% 14,8%
-15,6% 2009 2010 2011
EBITDA Margin
72% 67% 86%
2009 2010 2011
Debt Ratio
INCOME STATEMENT
INCOME STATEMENT (thousands of BRL R$)
2009 2010 2011
Net Revenues 1 .597.101 1 .953.133 1 .529.200 Cost of Goods Sold (1.096.932) (1.351.390) (1.319.900)
Gross Prof i t 500.169 601 .743 209.300 Expenses and other revenues (265.035) (412.045) (448.600)
Sales (253.691) (314.663) (349.400) General and Administration (140.174) (136.523) (112.100) Other 128.830 39.141 12.900
Equity Income - - - EBIT 235.134 189.698 (239.300)
Financial Earnings/Losses (103.369) (76.959) (109.800) EBT 131 .765 1 12 .739 (349.100)
Income Tax (6.508) (2.084) 33.000 Deferred Income Tax 11.432 10.303 - Non recurrent Revenues/Expenses (62.054) 20.261 -
Prof i t /Loss 74.635 141 .219 (316.100) EBITDA 7.816 19. 170 20.930
1.597.101 1.953.133 1.529.200
2009 2010 2011
Net Revenues Thousands BRL R$
BALANCE SHEET Balance Sheet (thousands of BRL R$)
2009 2010 2011
ASSETS 1 .607.871 1 .612.649 1 .546.400 Current Assets 949.777 941.499 840.800
Cash 96.801 50.986 27.300 Accounts receivable 555.007 541.116 435.600 Tax Credits 30.821 34.416 26.000 Inventories 157.553 224.414 272.400 Others 109.595 90.567 79.500
Non-current Assets 658.094 671.150 705.600 Long term 70.669 73.606 109.700 Investments 24.408 22.669 24.400 Permanent 286.444 334.640 339.400 Patents, trademarks and goodwill 276.573 240.235 232.100
L IABIL IT IES 1 . 161 .790 1 .083.127 1 .333.500 Current Liabilities 627.512 628.625 659.900
Accounts Payable 159.529 123.024 89.200 Loans 187.965 365.841 455.300 Labor Liabilities Payable 58.595 70.816 67.000 Current Tax Payable 23.299 14.523 12.200 Others 198.124 54.421 36.200
Non-current Liabilities 534.278 454.502 673.600 Loans 444.931 383.374 615.400 Deferred Tax 2.835 2.404 1.300 Provisions 33.215 28.088 4.800 Others 53.297 40.636 52.100
Stockholders' Equity 446.081 529.522 212.900 Capital Stock 200.000 208.597 208.600 Revaluation Reserve 19.571 17.983 16.600 Earnings Reserve 225.540 310.499 (4.200) Retained Earnings - - - Others 970 (7.557) (8.100)
1.607.871 1.612.649 1.546.400
1.161.790 1.083.127 1.333.500
446.081 529.522 212.900
2009 2010 2011
In thousands of BRL R$
ASSETS LIABILITIES STOCKHOLDERS' EQUITY
CURRENT ASSETS
27%
NON-CURRENT ASSETS
23%
CURRENT LIABILITIES
21%
NON-CURRENT LIABILITIES
22%
STOCKHOLDERS' EQUITY
7%
Alpargatas s.a. Shoe design, manufacturing and branding Specialty: sports shoes, men and women leather shoes, rubber sandals São Paulo - SP
GENERAL INFORMATION Founded in 1907, with the original name of Fábrica Brasileira de Alpargatas e Calçados, by a scottish named Robert Fraser together with an English manufacturer. Prior to that, Robert Fraser had founded factories of Alpargatas" (south american type of sandals) in Argentina and Uruguay. In Brazil, operations have begun in the neibourhood of Mooca, in the city of São Paulo. In 1909 the company found success thanks to the use of their sandals in the coffee crops. In the 30s the company control has been passed to the Argentinian enterprise and in 1982 it became a company controlled by the Camargo Correa Group. In 2006 Alpargatas Brasil acquired 60% of Alpargatas Argentina (former controller) and became the largest shoes group in South America. Foundation: 1907 Address: R FUNCHAL, 160, 7 ANDAR, VILA OLIMPIA CNPJ: 61.079.117/0001-05 Type: Public Auditing: Deloitte Touche Tohmatsu Auditores Independentes Information source: CVM and Klooks Files
BRANDS
MAIN EXECUTIVES Márcio Garcia de Souza Chairman Márcio Luiz Simões Utsch CEO Adalberto Fernandes Granjo Director Carla Schmitzberger Director Fabio Leite de Souza Director Fernando Beer Director Javier Goni Director Marcelo Turri Director Jose Roberto Lettiere Director Marcia Costa Director Rogerio Bastos Shimizu Director
FINANCIAL RATIOS
Return Rat ios 2009 2010 2011 Industry
2011 EBITDA Margin 11,4% 16,8% 14,2% 7,8% Profit Margin 6,4% 13,9% 12,0% 1,5% Return on Assets (ROA) 6,75% 13,75% 12,65% 1,6% Return on Capital Employed (ROCE) 10,7% 19,6% 17,6% 9,1% Return on Equity (ROE) 11,0% 23,0% 20,7% 2,8%
E f f ic iency Rat ios 2009 2010 2011
Industry 2011
Inventory Turnover 9,3 7,5 7,3 7,9 Accounts Receivable Turnover 4,7 5,2 5,1 3,5 Assets Turnover 1,0 1,0 1,1 1,0
L iqu id i ty Rat ios 2009 2010 2011
Industry 2011
Cash Ratio 0,78 1,08 1,01 0,87 Current Ratio 2,59 2,40 2,42 2,65 Quick Ratio 2,06 1,91 1,89 2,16 General Liquidity Ratio 2,60 2,48 2,56 2,30
Debt Rat ios 2009 2010 2011
Industry 2011
Debt Ratio 38% 40% 39% 43%
11,4% 16,8% 14,2%
2009 2010 2011
EBITDA Margin
38% 40%
39%
2009 2010 2011
Debt Ratio
INCOME STATEMENT
INCOME STATEMENT (thousands of BRL R$)
2009 2010 2011
Net Revenues 1 .927.021 2.231 .875 2.574.700 Cost of Goods Sold (1.096.077) (1.213.783) (1.420.772)
Gross Prof i t 830.944 1 .018.092 1 . 153.928 Expenses and other revenues (658.170) (684.645) (836.456)
Sales (506.192) (539.403) (663.238) General and Administration (111.247) (120.391) (144.194) Other (40.731) (24.851) (29.024)
Equity Income (18.420) (9.222) (5.657) EBIT 154.354 324.225 311 .815
Financial Earnings/Losses (28.091) 8.958 29.049 EBT 126.263 333.183 340.864
Income Tax (5.558) (25.972) (31.797) Non recurrent Revenues/Expenses 3.241 3.241
Prof i t /Loss 123.946 310.452 309.067 EBITDA 220.057 374.996 365.850
1.927.021 2.231.875 2.574.700
2009 2010 2011
Net Revenues In thousands of BRL R$
BALANCE SHEET Balance Sheet (thousands of BRL R$)
2009 2010 2011
ASSETS 1 .836.304
2.257.535
2.442.554 Current Assets 1.012.326 1.457.838 1.609.539
Cash 306.590 654.665 670.954 Accounts receivable 408.127 426.573 505.858 Tax Credits 25.355 24.685 27.959 Inventories 207.986 295.885 351.023 Others 64.268 56.030 53.745
Non-current Assets 823.978 799.697 833.015 Long term 144.843 158.385 153.175 Investments 91.851 77.338 74.462 Permanent 328.086 301.520 341.980 Patents, trademarks and goodwill 259.198 262.454 263.398
L IABIL IT IES 1 .836.304
2.257.535
2.442.554 Current Liabilities 390.733 606.821 666.299
Accounts Payable 115.625 212.777 297.150 Loans 109.345 226.371 180.077 Labor Liabilities Payable 68.014 88.021 98.897 Current Tax Payable 20.395 22.114 15.515 Provisions 8.055 8.847 11.436
Others 69.299 48.691 63.224 Non-current Liabilities 315.599 302.641 286.396 Loans 86.909 69.589 55.856 Provisions 29.202 30.784 26.245 Others 199.488 202.268 204.295
Stockholders' Equity 1.129.972 1.348.073 1.489.859 Capital Stock 391.804 441.171 518.922 Revaluation Reserve 146.134 144.513 126.514 Earnings Reserve 558.970 757.956 865.824 Others 33.064 4.433 (21.401)
GRENDENE s.a. Shoe design, manufacturing and branding Specialty: plastic shoes São Paulo - SP
GENERAL INFORMATION Grendene S.A. is a brazilian manufacturer of specialty shoes made of PVC and EVA Grendene S. A. é um empresa brasileira de fabricação de calçados feitos em PVC e EVA. It was founded in the city of Farroupilha-RS in the 25th of Febrary of 1971. Now a days its production headquarter is located in the city of Sobral-CE and its administration is kept in Farroupilha-RS. In the 29th of October of 2004 the enterprise became public. Foundation: 25/02/1971 Address: AV PEDRO GRENDENE, 131, A, VOLTA GRANDE CNPJ: 89.850.341/0001-60 Company Type: Public Auditing: Ernst & Young Terco Information source: CVM and Klooks Files
BRANDS
MAIN EXECUTIVES
Alexandre Grendede Bartelle
Diretor Presidente Pedro Grendene Bartelle
Diretor Vice Presidente
Francisco Olinto Velo Schmitt
Diretor de Relações com Investidores Gelson Luis Rostirolla
Diretor Financeiro
Rudimar Dall’Onder
Diretor Industrial e Comercial
FINANCIAL RATIOS
Return Rat ios 2009 2010 2011 Industry
2011 EBITDA Margin 12,3% 14,7% 14,6% 7,8% Profit Margin 18,7% 19,5% 20,6% 1,5% Return on Assets (ROA) 15,40% 15,64% 14,93% 1,6% Return on Capital Employed (ROCE) 10,2% 12,3% 10,3% 9,1% Return on Equity (ROE) 18,6% 18,6% 17,0% 2,8%
E f f ic iency Rat ios 2009 2010 2011
Industry 2011
Inventory Turnover 9,8 10,8 10,3 7,9 Accounts Receivable Turnover 2,5 2,9 2,2 3,5 Assets Turnover 0,8 0,8 0,7 1,0
L iqu id i ty Rat ios 2009 2010 2011
Industry 2011
Cash Ratio 2,96 3,37 3,99 0,87 Current Ratio 5,82 5,84 7,91 2,65 Quick Ratio 5,26 5,35 7,28 2,16 General Liquidity Ratio 5,84 6,19 8,36 2,30
Debt Rat ios 2009 2010 2011
Industry 2011
Debt Ratio 17% 16% 12% 43%
INCOME STATEMENT INCOME STATEMENT (thousands of BRL R$)
2009 2010 2011
Net Revenues 1 .455.757 1 .604.507 1 .482.636 Cost of Goods Sold (889.711) (953.261) (840.497)
Gross Prof i t 566.046 651 .246 642.139 Expenses and other revenues (413.862) (442.833) (454.846)
Sales (356.275) (377.010) (396.096) General and Administration (58.977) (61.878) (61.177) Other 1.390 (3.945) 2.427
Equity Income - - - EBIT 152.184 208.413 187.293
Financial Earnings/Losses 135.624 122.469 153.003 EBT 287.808 330.882 340.296
Income Tax (15.707) (18.415) (34.845) Prof i t /Loss 272.101 312.467 305.451 EBITDA 178.491 236.586 216.210
BALANCE SHEET Balance Sheet (thousands of BRL R$)
2009 2010 2011
ASSETS 1 .767.165 1 .998.281 2.045.624 Current Assets 1.558.720 1.786.708 1.815.815
Cash 794.359 1.030.726 915.580 Accounts receivable 581.689 560.579 663.852 Tax Credits 20.421 18.863 23.263 Inventories 148.571 149.036 144.112 Others 13.680 27.504 69.008
Non-current Assets 208.445 211.573 229.809 Long term 15.525 15.483 23.294 Investments 873 877 1.670 Permanent 179.638 181.828 191.706 Patents, trademarks and goodwill 12.409 13.385 13.139
L IABIL IT IES 1 .767.165 1 .998.281 2.045.624 Current Liabilities 267.977 305.849 229.549
Accounts Payable 40.009 31.687 27.011 Loans 107.587 166.500 97.551 Labor Liabilities Payable 63.888 53.352 38.592 Current Tax Payable 9.143 7.746 13.759 Provisions 1.303 1.103 1.003 Advances - - - Others 46.047 45.461 51.633
Non-current Liabilities 34.619 16.766 15.123 Loans 33.188 14.766 13.123 Provisions 1.300 2.000 2.000 Others 131 - -
Stockholders' Equity 1.464.569 1.675.666 1.800.952 Capital Stock 1.226.760 1.231.302 1.231.302 Capital Reserve 1.086 1.953 2.685 Earnings Reserve 230.870 449.557 568.743 Retained Earnings 10.622 - - Others (4.769) (7.146) (1.778)
CALÇADOS BEIRA-RIO S.A. Shoe design, manufacturing and branding Specialty: rubber sandals, children women shoes, leather and synthetic women shoes Novo Hamburgo - RS
GENERAL INFORMATION The company was founded in 1975, in the city of Igrejinha-RS. Now-a-days its administration headquarters is based in Novo Hamburgo-RS, and production facilities in Roca Sales, Sapiranga, Taquara, Osório, Mato Leitão, Novo Hamburgo and Teutônia. It is one of the largest shoes manufacturers in Brazil and its products are available in more than 60 different countries. Foundation: 24/01/1975 Address: R DOM PEDRO II, 367, CONJ 501, SAO JOAO - Porto Alegre (RS) CNPJ: 88.379.771/0001-82 Company Type: Private Auditing: Rokembach + Lahm, Villanova, Gais e Cia Auditores Information source: Diário Oficial do Estado do Rio Grande do Sul and Klooks files
MAIN EXECUTIVES Clovis Moacir Gruhlke
CFO
Eunice Cristina da Silva Moser
Accountant
FINANCIAL RATIOS
Return Rat ios 2009 2010 2011 Industry
2011 EBITDA Margin 14,7% 17,5% 14,0% 7,8% Profit Margin 7,7% 9,7% 7,1% 1,5% Return on Assets (ROA) 14,95% 20,61% 14,63% 1,6% Return on Capital Employed (ROCE) 31,4% 45,0% 34,2% 9,1% Return on Equity (ROE) 24,0% 34,1% 24,3% 2,8%
E f f ic iency Rat ios 2009 2010 2011
Industry 2011
Inventory Turnover 17,2 14,5 23,3 7,9 Accounts Receivable Turnover 3,9 3,8 3,6 3,5 Assets Turnover 1,9 2,1 2,1 1,0
L iqu id i ty Rat ios 2009 2010 2011
Industry 2011
Cash Ratio 0,53 0,10 0,42 0,87 Current Ratio 3,87 3,20 3,41 2,65 Quick Ratio 3,27 2,55 3,00 2,16 General Liquidity Ratio 2,64 2,53 2,51 2,30
Debt Rat ios 2009 2010 2011
Industry 2011
Debt Ratio 38% 40% 40% 43%
INCOME STATEMENT Income Statement thousands of BRL R$ 2009 2010 2011
Net Revenues
525.123
775.887
957.496
Cost of Goods Sold (371.461)
(533.295) (681.563)
Gross Prof i t
153.662
242.592
275.933 Expenses and other revenues (85.404) (115.444) (152.381)
Sales (63.698) (90.793) (115.843) General and Administration (8.356) (12.531) (14.460) Other (13.350) (12.120) (22.078)
Equity Income 1.258 - - EBIT 69.516 127.148 123.552
Financial Earnings/Losses 2.997 454 2.411 EBT 72.513 127.602 125.963
Income Tax (23.124) (41.231) (42.205) Deferred Income Tax (4.296) (3.947) (7.374) Profit Sharing Program (4.439) (7.106) (8.843)
Prof i t /Loss
40.654 75.318 67.541
EBITDA 76.973 135.561 133.762
BALANCE SHEET Balance Sheet (thousands of BRL R$) 2009 2010 2011
ASSETS 271 .897 365.510 461 .572 Current Assets 196.029 264.845 342.002
Cash 26.924 8.073 42.247 Accounts receivable 133.856 204.202 264.942 Tax Credits 1.625 981 1.721 Inventories 30.586 53.441 41.145 Others 3.038 (1.852) (8.053)
Non-current Assets 75.868 100.665 119.570 Long term 11.764 18.800 25.638 Investments 5.902 68 68 Permanent 57.472 80.618 92.846 Patents, trademarks and goodwill 730 1.179 1.018
L IABIL IT IES 271 .897 365.510 461 .572 Current Liabilities 50.668 82.779 100.243
Accounts Payable 5.602 12.245 10.925 Loans 5.193 6.209 8.597 Labor Liabilities Payable 10.077 - - Current Tax Payable 4.100 17.471 26.960 Provisions 576 705 791 Interests on own capital 11.536 24.552 28.090 Others 13.584 21.597 24.880
Non-current Liabilities 52.189 61.721 83.434 Loans 4.277 4.105 2.966 Current Tax Payable 8.846 12.000 19.229 Provisions 24.647 28.147 45.718 Others 14.419 17.469 15.521
Stockholders' Equity 169.040 221.010 277.895 Capital Stock 85.000 95.000 120.000 Capital Reserve 21 21 21 Earnings Reserve 120.929 168.709 200.594 Treasury Shares (36.910) (42.720) (42.720)
CAMBUCI S.A. PENALTY Shoe design, manufacturing and branding Specialty: sports shoes São Paulo - SP
GENERAL INFORMATION One of the most importante manufacturers of sports products in the country, owner of the brands Penalty and Stadium. The company is already established in São Paulo, Paraíba, Bahia, Argentina, Chile, Paraguay, China and Spain. Penalty is a sports materials brand started in 1970 in the city of São Paulo and manufactures shoes, balls, accessories, and other products. Foundation: 11/07/1966
Address: AV PEDROSO DE MORAIS, 1553, 3 AN - CJ 3 E 4 EDIFICIO CAPITAL PLAZA, PINHEIROS - São Paulo (SP) CNPJ: 61.088.894/0001-08
Company Type: Public Auditing: GF Auditores Independentes
Information source: Diário Oficial do Estado de São Paulo and Klooks files
MAIN EXECUTIVES
Roberto Estefano
President and IR Director
Eduardo Estefano Filho
Director
Alexandre Estefano
Director of Internationl Operations
Marcelo Kolanian
Supply Director
T.A. STAR
FINANCIAL RATIOS
Return Rat ios 2009 2010 2011 Industry
2011 EBITDA Margin 38,1% 11,3% 9,4% 7,8% Profit Margin 31,3% 3,8% 2,4% 1,5% Return on Assets (ROA) 42,63% 5,31% 2,87% 1,6% Return on Capital Employed (ROCE) 103,1% 18,2% 23,3% 9,1% Return on Equity (ROE) 312,0% 27,4% 16,6% 2,8%
E f f ic iency Rat ios 2009 2010 2011
Industry 2011
Inventory Turnover 5,9 5,4 4,3 7,9 Accounts Receivable Turnover 3,2 4,1 3,7 3,5 Assets Turnover 1,4 1,4 1,2 1,0
L iqu id i ty Rat ios 2009 2010 2011
Industry 2011
Cash Ratio 0,03 0,14 0,10 0,87 Current Ratio 1,44 2,16 1,13 2,65 Quick Ratio 0,96 1,35 0,69 2,16 General Liquidity Ratio 0,98 1,12 0,96 2,30
Debt Rat ios 2009 2010 2011
Industry 2011
Debt Ratio 102% 89% 104% 43%
INCOME STATEMENT Income Statement thousands of BRL R$
2009 2010 2011
Net Revenues 222.921 247.758 278.773 Cost of Goods Sold (131.708) (142.210) (155.669)
Gross Prof i t 91 .213 105.548 123.104 Expenses and other revenues (4.733) (83.541) (102.690)
Sales (56.375) (68.677) (79.276) General and Administration (8.957) (18.123) (25.835) Other 60.599 3.259 2.421
Equity Income (20) 296 - EBIT 86.460 22.303 20.414
Financial Earnings/Losses (16.830) (12.583) (14.126) EBT 69.630 9.720 6.288
Income Tax - (271) 271 Deferred Income Tax - - - Non recurrent Revenues/Expenses 108 48 164
Prof i t /Loss 69.738 9.497 6.723 EBITDA 84.829 28.042 26.206
BALANCE SHEET Balance Sheet (thousands of BRL R$)
2009 2010 2011
ASSETS 271 .897 365.510 461 .572 Current Assets 196.029 264.845 342.002
Cash 26.924 8.073 42.247 Accounts receivable 133.856 204.202 264.942 Tax Credits 1.625 981 1.721 Inventories 30.586 53.441 41.145 Others 3.038 (1.852) (8.053)
Non-current Assets 75.868 100.665 119.570 Long term 11.764 18.800 25.638 Investments 5.902 68 68 Permanent 57.472 80.618 92.846 Patents, trademarks and goodwill 730 1.179 1.018
L IABIL IT IES 257.478 348.041 446.051 Current Liabilities 50.668 82.779 100.243
Accounts Payable 5.602 12.245 10.925 Loans 5.193 6.209 8.597 Labor Liabilities Payable 10.077 - - Current Tax Payable 4.100 17.471 26.960 Provisions 576 705 791 Interests on own capital 11.536 24.552 28.090 Others 13.584 21.597 24.880
Non-current Liabilities 37.770 44.252 67.913 Loans 4.277 4.105 2.966 Current Tax Payable 8.846 12.000 19.229 Provisions 24.647 28.147 45.718
Stockholders' Equity 169.040 221.010 277.895 Capital Stock 85.000 95.000 120.000 Capital Reserve 21 21 21 Earnings Reserve 120.929 168.709 200.594 Treasury Shares (36.910) (42.720) (42.720)
A. GRINGS S.A. PICCADILLY Shoe design, manufacturing and branding Specialty: synthetic materials shoes Igrejinha - RS
GENERAL INFORMATION 56 years, 5 manufacturing plants (all in Rio Grande do Sul state), and around 4 thousand employees. Its main brand, Piccadilly, has presence in 90 countries and more than 7 thousand employees. Its main brand, Piccadilly, is present in 90 countries and more than 7 thousand stores. Piccadilly has 22 exclusive stores: 10 in Venezuela, 8 in Kuwait, 2 in Miami, 1 in Peru and 1 in Guadalupe. Foundation: 23/09/1966
Address: R ERNESTO DORNELES, 577, 595, CENTRO - Igrejinha (RS) CNPJ: 97.755.177/0001-30
Company Type: Private Auditing: Schimitt e Auditores Associados
Information source: Diário Oficial do Estado do Rio Grande do Sul and Klooks files
MAIN EXECUTIVES
Paulo Grings
CEO
Adair Grings
CFO
Juliano Konzen
Accountant
Paulo Grings
CEO
FINANCIAL RATIOS
Return Rat ios 2009 2010 2011 Industry
2011 EBITDA Margin 10,5% 16,5% 14,8% 7,8% Profit Margin 6,0% 10,6% 9,7% 1,5% Return on Assets (ROA) 9,63% 16,52% 17,62% 1,6% Return on Capital Employed (ROCE) 19,7% 34,1% 32,3% 9,1% Return on Equity (ROE) 15,7% 25,4% 25,6% 2,8%
E f f ic iency Rat ios 2009 2010 2011
Industry 2011
Inventory Turnover 8,3 6,6 8,3 7,9 Accounts Receivable Turnover 3,1 3,3 3,5 3,5 Assets Turnover 1,6 1,6 1,8 1,0
L iqu id i ty Rat ios 2009 2010 2011
Industry 2011
Cash Ratio 0,20 0,26 0,32 0,87 Current Ratio 2,95 2,72 3,71 2,65 Quick Ratio 2,23 1,95 2,72 2,16 General Liquidity Ratio 2,59 2,86 3,20 2,30
Debt Rat ios 2009 2010 2011
Industry 2011
Debt Ratio 39% 35% 31% 43%
INCOME STATEMENT Income Statement (thousands of BRL R$)
2009 2010 2011
Net Revenues 186.189 218.716 300.788 Cost of Goods Sold (123.368) (138.343) (188.681)
Gross Prof i t 62.821 80.373 1 12 . 107 Expenses and other revenues (49.156) (47.073) (69.632)
Sales (37.137) (41.388) (54.197) General and Administration (9.445) (10.200) (11.930) Other (2.573) 4.515 (3.504)
Equity Income 3.030 58 (1.011) EBIT 16.695 33.358 41 .464
Financial Earnings/Losses (2.644) (1.906) 708 EBT 14.050 31 .452 42.172
Income Tax (2.912) (8.250) (13.068) Deferred Income Tax - - - Non recurrent Revenues/Expenses - - -
Prof i t /Loss 1 1 . 138 23.202 29.104 EBITDA 19.582 35.990 44.582
BALANCE SHEET Balance Sheet (thousands of BRL R$)
2009 2010 2011
ASSETS 1 15.620 140.434 165.195 Current Assets 91.563 116.456 136.163
Cash 6.143 11.089 11.591 Accounts receivable 60.302 67.118 85.453 Tax Credits 1.451 3.535 1.550 Inventories 22.319 33.271 36.364 Others 1.348 1.444 1.205
Non-current Assets 24.057 23.977 29.031 Long term 4.070 4.179 5.253 Investments 3.292 2.771 1.706 Permanent 16.322 16.733 21.679 Patents, trademarks and goodwill 373 294 392
L IABIL IT IES 1 15.620 140.434 165.195 Current Liabilities 31.041 42.753 36.667
Accounts Payable 14.008 20.878 17.899 Loans 6.667 10.586 6.474 Labor Liabilities Payable 1.866 2.293 1.888 Current Tax Payable 3.640 3.753 3.230 Others 4.861 5.244 7.175
Non-current Liabilities 13.550 6.406 14.907 Loans 556 - 7.429 Deferred Tax 4.401 592 1.715 Provisions 8.594 5.729 4.297 Others - 85 1.467
Stockholders' Equity 71.028 91.274 113.620 Capital Stock 45.000 45.000 47.400 Revaluation Reserve 26.028 46.274 66.220 Earnings Reserve - - - Retained Earnings - - - Others - - -
USAFLEX S.A. Shoe design, manufacturing and branding Specialty: leather shoes Igrejinha - RS
GENERAL INFORMATION Founded in 1994 and with operations since 1998 in the city of Igrejinha-RS focused specially in the manufacturing of women leather shoes. Since the year 2k operates under the brand "Usaflex". In 2010 the company became a "Sociedade Anonima" (equivalent of a corporation).
Information source: Diário Oficial do Estado do Rio Grande do Sul and Klooks files
MAIN EXECUTIVES Samuel Fernando Lauck
CEO
Simone Groeler Kohlrawsch
Vice President
Foundation: 17/03/1994 Address: R MAL. DEODORO DA FONSECA, 530, ANEXO 01, BLOCO A,B
ANEXO 02, BLOCO B ANEXO C, CASA DE PEDRA - Igrejinha (RS) CNPJ: 86.900.925/0001-04
Company type: Private Audited: No
B’N’B STAR
FINANCIAL RATIOS
Return Rat ios 2009 2010 2011 Industry
2011 EBITDA Margin 15,6% 11,7% 12,1% 7,8% Profit Margin 8,4% 3,9% 5,2% 1,5% Return on Assets (ROA) 12,90% 5,74% 9,58% 1,6% Return on Capital Employed (ROCE) 49,2% 30,9% 41,1% 9,1% Return on Equity (ROE) 53,5% 29,2% 38,5% 2,8%
E f f ic iency Rat ios 2009 2010 2011
Industry 2011
Inventory Turnover 11,6 8,9 13,8 7,9 Accounts Receivable Turnover 3,6 3,6 4,1 3,5 Assets Turnover 1,5 1,5 1,8 1,0
L iqu id i ty Rat ios 2009 2010 2011
Industry 2011
Cash Ratio 0,08 0,10 0,02 0,87 Current Ratio 1,54 1,60 1,51 2,65 Quick Ratio 1,29 1,29 1,26 2,16 General Liquidity Ratio 1,32 1,25 1,33 2,30
Debt Rat ios 2009 2010 2011
Industry 2011
Debt Ratio 76% 80% 75% 43%
INCOME STATEMENT Income Statement (thousands of BRL R$)
2009 2010 2011
Net Revenues 139.806 189.526 245.576 Cost of Goods Sold (97.317) (141.974) (185.030)
Gross Prof i t 42.488 47.552 60.546 Expenses and other revenues (21.745) (28.712) (34.367)
Sales (18.778) (26.137) (32.499) General and Administration (2.766) (3.839) (4.453) Other (200) 1.264 2.586
Equity Income - - - EBIT 20.743 18.840 26.179
Financial Earnings/Losses (4.616) (8.667) (8.416) EBT 16. 127 10. 173 17 .763
Income Tax (4.320) (2.819) (4.920) Deferred Income Tax - - - Non recurrent Revenues/Expenses - - -
Prof i t /Loss 1 1 .807 7.354 12.843 EBITDA 21 .766 22.221 29.726
BALANCE SHEET Balance Sheet (thousands of BRL R$)
2009 2010 2011
ASSETS 91 .539 128.124 134.049 Current Assets 75.929 107.685 106.411
Cash 3.769 6.810 1.296 Accounts receivable 38.374 52.053 59.283 Tax Credits 2.581 3.073 3.280 Inventories 12.086 21.257 17.810 Others 19.118 24.492 24.742
Non-current Assets 15.611 20.440 27.638 Long term 521 185 193 Investments 180 180 180 Permanent 11.622 16.788 23.978 Patents, trademarks and goodwill 3.287 3.287 3.287
L IABIL IT IES 91 .539 128.124 134.049 Current Liabilities 49.386 67.160 70.287
Accounts Payable 9.797 13.681 13.056 Loans 33.884 45.772 48.727 Labor Liabilities Payable 743 1.162 1.894 Current Tax Payable 1.784 2.113 3.621 Others 3.178 4.433 2.989
Non-current Liabilities 20.079 35.746 30.369 Loans 16.080 31.708 26.252 Deferred Tax 3.968 3.986 4.065 Provisions - - - Others 30 52 52
Stockholders' Equity 22.075 25.218 33.393 Capital Stock 25.000 25.000 25.000 Revaluation Reserve 1.905 1.905 1.905 Earnings Reserve 12.660 15.802 23.978 Capital to Cash-in (17.500) (17.500) (17.500) Others 10 10 10
CALÇADOS JACOB S.A. KILDARE Shoe design, manufacturing and branding Specialty: leather shoes Novo Hamburgo - RS
GENERAL INFORMATION Shoes manufacturer established in the 20's in Novo Hamburgo (RS). Since the 70's has been working with "Kildare" as main brand. Address: R MARCILIO DIAS, 684, RIO BRANCO - Novo Hamburgo (RS) CNPJ: 91.669.242/0001-28
Company type: Private Audited: No
Information source: Diário Oficial do Estado do Rio Grande do Sul and Klooks files
MAIN EXECUTIVES Eduardo Kurt Jacob
Director
Raul Gastão Klein
Director Mauricio Klein
Director
Elenice Flach Schuh
Accountant
FINANCIAL RATIOS
Return Rat ios 2009 2010 2011 Industry
2011 EBITDA Margin -4,0% 4,8% 8,4% 7,8% Profit Margin -0,3% 1,5% 5,4% 1,5% Return on Assets (ROA) -0,22% 1,36% 5,27% 1,6% Return on Capital Employed (ROCE) -3,6% 4,2% 8,4% 9,1% Return on Equity (ROE) -0,2% 1,5% 6,0% 2,8%
E f f ic iency Rat ios 2009 2010 2011
Industry 2011
Inventory Turnover 6,6 11,2 10,9 7,9 Accounts Receivable Turnover 2,3 2,3 2,3 3,5 Assets Turnover 0,7 0,9 1,0 1,0
L iqu id i ty Rat ios 2009 2010 2011
Industry 2011
Cash Ratio 0,55 0,11 0,13 0,87 Current Ratio 16,59 9,05 7,47 2,65 Quick Ratio 14,61 8,25 6,76 2,16 General Liquidity Ratio 18,37 9,77 7,99 2,30
Debt Rat ios 2009 2010 2011
Industry 2011
Debt Ratio 5% 10% 13% 43%
INCOME STATEMENT Income Statement (thousands of BRL R$)
2009 2010 2011
Net Revenues 32.285 43.927 52.763 Cost of Goods Sold (22.915) (28.813) (33.545)
Gross Prof i t 9.370 15. 1 14 19.218 Expenses and other revenues (10.760) (13.285) (15.268)
Sales (7.520) (9.109) (12.078) General and Administration (2.316) (2.730) (2.603) Other (924) (1.446) (587)
Equity Income (124) (5) 6 EBIT ( 1 .515) 1 .824 3.956
Financial Earnings/Losses 1.426 (662) (202) EBT (89) 1 . 162 3.754
Income Tax (9) (505) (903) Deferred Income Tax - - - Non recurrent Revenues/Expenses - - -
Prof i t /Loss (97) 657 2.851 EBITDA (1 .288) 2. 100 4.435
BALANCE SHEET Balance Sheet thousands of BRL R$
2009 2010 2011
ASSETS 45.029 48.256 54.067 Current Assets 40.687 44.677 50.550
Cash 1.346 527 858 Accounts receivable 14.191 19.011 22.883 Tax Credits 439 280 709 Inventories 4.860 3.931 4.843 Others 19.850 20.927 21.257
Non-current Assets 4.342 3.579 3.516 Long term 107 111 141 Investments 1.861 396 402 Permanent 2.260 2.957 2.859 Patents, trademarks and goodwill 114 114 114
L IABIL IT IES 45.029 48.256 54.067 Current Liabilities 2.452 4.937 6.763
Accounts Payable 735 904 1.193 Loans - - - Labor Liabilities Payable 302 318 232 Current Tax Payable 161 524 262 Others 1.254 3.190 5.075
Non-current Liabilities - - - Loans - - - Deferred Tax - - - Provisions - - - Others - - -
Stockholders' Equity 42.577 43.319 47.304 Capital Stock 31.095 31.605 33.260 Revaluation Reserve 455 186 186 Earnings Reserve 11.027 11.528 13.858 Retained Earnings - - - Others - - -
DAKOTA S.A. Shoe design, manufacturing and branding Specialty: leather shoes Novo Petrópolis - RS
GENERAL INFORMATION Foundation: 10/12/1976 Address: AV 15 DE NOVEMBRO, 3665, PIA - Nova Petrópolis (RS) CNPJ: 89.086.961/0001-74 Company type: Private Auditing: Confidor Auditores Associados Information source: Diário Oficial do Estado do Rio Grande do Sul and Klooks files
MAIN EXECUTIVES Romeu Lehnen
CEO
Ernani Volmir Kiekow
Director Bruno Waldemir Kuhn
Director
Lino Schneider
Director Gilberto Scholles
Director
Jorge Wanderlei Welter
Director
LBO STAR
FINANCIAL RATIOS
Return Rat ios 2009 2010 2011 Industry
2011 EBITDA Margin 12,1% 18,8% 24,1% 7,8% Profit Margin 10,6% 14,2% 22,2% 1,5% Return on Assets (ROA) 6,91% 13,02% 15,10% 1,6% Return on Capital Employed (ROCE) 7,2% 17,9% 16,7% 9,1% Return on Equity (ROE) 7,5% 14,5% 16,4% 2,8%
E f f ic iency Rat ios 2009 2010 2011
Industry 2011
Inventory Turnover 6,3 8,9 7,8 7,9 Accounts Receivable Turnover 2,1 2,9 3,1 3,5 Assets Turnover 0,7 0,9 0,7 1,0
L iqu id i ty Rat ios 2009 2010 2011
Industry 2011
Cash Ratio 1,25 0,69 0,53 0,87 Current Ratio 6,76 4,98 4,55 2,65 Quick Ratio 5,43 3,95 3,48 2,16 General Liquidity Ratio 12,83 9,95 12,21 2,30
Debt Rat ios 2009 2010 2011
Industry 2011
Debt Ratio 8% 10% 8% 43%
INCOME STATEMENT Income Statement (thousands of BRL R$)
2009 2010 2011
Net Revenues 64.622 101 .921 86.726 Cost of Goods Sold (52.623) (73.261) (66.156)
Gross Prof i t 12 .000 28.660 20.570 Expenses and other revenues (5.468) (10.752) (1.018)
Sales (9.202) (13.973) (13.786) General and Administration (3.855) (4.242) (4.719) Other 7.588 7.463 17.487
Equity Income - - - EBIT 6.531 17 .908 19.553
Financial Earnings/Losses 922 419 1.321 EBT 7.454 18.328 20.874
Income Tax (615) (3.884) (1.658) Non recurrent Revenues/Expenses - - -
Prof i t /Loss 6.839 14.443 19.216
EBITDA 7.816 19. 170 20.930
BALANCE SHEET Balance Sheet (thousands of BRL R$)
2009 2010 2011
ASSETS 99.025 1 10.932 127.289 Current Assets 52.181 55.552 47.464
Cash 9.632 7.686 5.493 Advances 45 220 299 Accounts receivable 30.106 34.743 28.406 Tax Credits 1.635 903 498 Inventories 10.258 11.514 11.167 Others 505 485 1.601
Non-current Assets 46.844 55.379 79.825 Long term 2.780 1.357 195 Investments 34.044 43.264 64.249 Permanent 9.768 10.548 15.207 Patents, trademarks and goodwill 252 210 174
L IABIL IT IES 99.025 1 10.932 127.289 Current Liabilities 7.721 11.153 10.428
Accounts Payable 2.503 4.143 3.243 Loans 1.158 1.324 1.184 Labor Liabilities Payable 1.362 825 426 Provisions 290 375 336 Dividends 1.624 3.430 4.564 Others 784 1.055 676
Non-current Liabilities - - - Stockholders' Equity 91.304 99.778 116.861
Capital Stock 51.613 51.613 51.613 Capital Reserve 12 12 12 Earnings Reserve 40.879 53.516 70.599 Others (1.200) (5.363) (5.363)