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%
Daphne International …
Kingmaker Footwear …
Yue Yuen Industrial Holdings
Puma SE
A. Grings S.A. (Piccadilly)
Calçados Jacob (Kildare)
Rocky Brands Inc
Adidas
Stella International
Skechers USA Inc
Alpargatas
Weyco Group Inc
Foot Locker Inc
Beira Rio
VF Corp (Timberland)
Steve Madden Ltd
Usaflex
Le Saunda Holdings
Deckers Outdoor Corp
Nike
Arezzo
Belle International Holdings
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%
Daphne International …
Calçados Jacob (Kildare)
Puma SE
Rocky Brands Inc
Kingmaker Footwear …
Yue Yuen Industrial …
Adidas
Stella International
A. Grings S.A. (Piccadilly)
Alpargatas
Weyco Group Inc
Skechers USA Inc
Foot Locker Inc
Beira Rio
Usaflex
Steve Madden Ltd
Deckers Outdoor Corp
Arezzo
VF Corp (Timberland)
Nike
Le Saunda Holdings
Belle International 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%
Daphne International …
Puma SE
Rocky Brands Inc
Adidas
Kingmaker Footwear …
Calçados Jacob (Kildare)
Yue Yuen Industrial …
Usaflex
Weyco Group Inc
Alpargatas
Stella International
Foot Locker Inc
Skechers USA Inc
A. Grings S.A. (Piccadilly)
Steve Madden Ltd
Deckers Outdoor Corp
VF Corp (Timberland)
Arezzo
Nike
Le Saunda Holdings
Belle International 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
Daphne International …
Kingmaker Footwear …
Adidas
Yue Yuen Industrial Holdings
Weyco Group Inc
Usaflex
Foot Locker Inc
Stella International
Calçados Jacob (Kildare)
Alpargatas
Deckers Outdoor Corp
Nike
Steve Madden Ltd
Le Saunda Holdings
A. Grings S.A. (Piccadilly)
Beira Rio
VF Corp (Timberland)
Arezzo
Belle International Holdings
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%
Daphne International …
Puma SE
Adidas
Rocky Brands Inc
Kingmaker Footwear …
Yue Yuen Industrial Holdings
A. Grings S.A. (Piccadilly)
Skechers USA Inc
Weyco Group Inc
Stella International
Foot Locker Inc
Alpargatas
Usaflex
Calçados Jacob (Kildare)
Steve Madden Ltd
VF Corp (Timberland)
Deckers Outdoor Corp
Nike
Arezzo
Beira Rio
Belle International Holdings
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
(*) adjusted figures excluding the non-recurring effect – A3NP
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
(*) adjusted figures excluding the non-recurring effect – A3NP
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
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
43
Mas Market
Brand: Ipanema
Competitors:
Alpargatas, Dupé, Balina,
Beira-Rio
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
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
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%.
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.
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]
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