2. 2
Arezzo&Co
Business Highlights
Arezzo&Co is a benchmark company in the Brazilian retail sector, with a unique
positioning that aligns growth with high cash generation
Sound Growth
Strategy of consistent growth, with sales 4 times higher than the market average in the last
5 years
Unique business model in Brazil
Sector leader thanks to its integrated platform
Asset-light Model
87% of the stores are franchised and 90% of production outsourced
Brands recognized and desired by women consumers
Top-of-mind in the Brazilian women’s footwear and accessories market
Consistent delivery
Attractive returns and strong cash flow generation
3. 3
Arezzo&Co
Platform of Benchmark Brands
The Company has an exclusive portfolio of brands that are top-of-mind in the
markets where it operates
4. Arezzo&Co
Flexible Business Model
People & Management
BENCHMARK BRANDS
Customer-focused: we seek to anticipate what
Brazilian women want
MultichannelSourcing and Logistics
Communication and
Marketing
EXPERIENCED
MANAGEMENT
TEAM WITH
RESULTS-BASED
INCENTIVES
NATIONAL
DISTRIBUTION
STRATEGY
STREAMLINED
AND EFFICIENT
SUPPLY CHAIN
SOUND
COMMUNICATION
AND MARKETING
PROGRAM
ABILITY TO
INNOVATE
R&D
1 2 3 4 5
Arezzo&Co has total control over its Value Chain, from creation of the product,
to the consumer’s in-store experience
5. Arezzo&Co
Flexible Business Model
The Company’s know-how in managing multichannel business models is one
of its key competitive differentials
Franchises Owned StoresMultibrands
Enables greater brand capillarity
and visibility
Rapid expansion of the brand with
low investment and risk
Important sales channel for
smaller cities
Optimization of the sales team:
in-house team and commissioned
sales representatives
Best Franchise in Brazil (2005)
and in the sector for 7 years
96% of franchisee satisfaction,
with a track record of 28 years
Direct interaction with customer
develops retail competencies
Flagship stores ensure greater
visibility and strengthen the brand
image
Investment in stores and working
capital borne by franchisee
Attractive ROIC
Capillarity in distribution
Sales ramp-up, generating
business scalability
High Contribution Margins
Total control of experience with
the customer
Seal of Excellence in
Franchising for the
last 8 years (ABF)
which are also reflected
in franchised stores
6. 21 29 45 57
249
274
296
342
270
303
341
399
1.364
1.585
2.146
2.351
2009 2010 2011 2012
Owned Franchises Mutibrands90%
10%
Outsourcing
Owned factory
Arezzo&Co
Asset-Light Model
Optimization of capital allocation using an asset-light business model, from
production to distribution
Outsourcing of 90% of production
Located in one of the world’s major women’s footwear
clusters
High degree of specialization in certain categories
Flexible production accompanies seasonality
Quality control
Outsourcing Sales leveraged through franchises and multibrands
27% of sales in the Multibrands channel in 2012
48% of sales through Franchises in 2012
7. 44,2%
101,9%
144,6%
210,9%
13,9%
31,8% 29,8%
36,5%
2009 2010 2011 2012
Arezzo&Co (proforma sell-out) Market¹
7
Arezzo&Co
Sound Growth
28,4%
33%
Market CAGR
Arezzo & Co. CAGR
8%
4,3x
Notes:
1. Women’s footwear market in Brazil; Source: Euromonitor. Base chart 100 = 2009
2. Based on Euromonitor research and IBOPE Inteligência (Pyxis). Arezzo&Co estimate of market share for women’s footwear market
Growth: Arezzo&Co. Sell-out Net Sales X Market
One of the world’s largest players in women’s footwear, almost 4 times greater
than market growth in the last 4 years
+4% of Market Share
attained in the last 5 years
Evolution of Arezzo&Co. Market Share²
7%
8%
9%
10%
11%
2008 2009 2010 2011 2012
8. Arezzo&Co
Consistent delivery
The Company has achieved sustainable growth, while maintaining margins
Notes:
1. The adjustments to EBITDA for 2012 and 1H 2012 refer to a one-off charge of R$8MM incurred when replacing a sourcing supplier.
EBITDA Evolution (R$ MM) and EBITDA Margin (%)
28,4%
48,5%
57,7%
23,3%
22,1%
20,6%
41
61
95
118
144
57
69
11,1%
14,7%
16,7% 17,3% 16,7%
15,9% 15,8%
EBITDA EBITDA Margin
9. Arezzo&Co
Key messages
The company is ready to continue growing in a consistent and efficient manner
2
3
Changes to the sell-in calendar, in preparing the collection and monitoring the sell-out
4
1
5
Growth levers: continuous focus on the right product, backed up by a multibrand and
multichannel strategy
Continuous strengthening of the sourcing model
Consolidation and roll-out of the Anacapri brand
Improvement in the Corporate Governance structure