#1Farroupilha/RS Carlos Barbosa/RS Fortaleza/CE Crato/CE Sobral/CE GrendeneⓇ BIG PACTUAL BTG Pactual XIII CEO Conference São Paulo, February 14-16, 2012 melissa. Grendene rider grendha CARTAGO IPANEMA Grendene zaxy M:ZERO baby#2GrendeneⓇ 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. - 2 2#3History Highlights Footwear sector Strategy Results Agenda GrendeneⓇ Guidance 3#4GrendeneⓇ History Grendene was founded. First product: plastic packaging for wine. The launch of the "Nuar" sandal. In Ceará (CE), the first plant in Fortaleza. 1971 1978 1990 1993 Sobral (CE) plant was inaugurated. 1997 Crato (CE) plant was inaugurated. 2002 2004 Grendene takes the lead in Brazilian footwear exports. Grendene Started having common shares ("GRND3") negotiated at the Novo Mercado of BM&FBOVESPA. In Bahia (BA), Teixeira de Freitas plant was inaugurated. Melissa celebrates 30 years. 2007 2009 2010 Celebrating 40 years of Grendene. 4#5Grendene® Highlights Grendene is one of the world's largest producers of footwear. Production capacity: 200 million pairs/year Average production: 500,000 pairs/day. Employees: 24,000 in December 31, 2011. New products in 2011: 1,002. World presence: more than 90 countries. Brands with strong personality. Innovation in product, distribution and media. Listed on BM&FBOVESPA; free float: 25%. Solid capital structure and strong cash flow. 5#6GrendeneⓇ Location of industrial plants and productive process Brazil Verticalization = Agility PVC formulation Carlos Barbosa Farroupilha Sobral Fortaleza Crato Design Teixeira de Freitas Moulds Built area = 270.000 m² R&D 9#7GrendeneⓇ Brazil's footwear sector Profile 8,200 producers in 2010 348,000 direct employees Production: 894 million pairs in 2010 (814 million pairs in 2009) World's 3rd largest producer. Apparent consumption, Brazilian domestic market: 780 million pairs and 4.1 pairs per capita/year in 2010 (717 million pairs and 3.7 pairs in 2009). Exports in 2010: 143 million pairs to more than 140 countries (+12.9% vs. 2009) Source: IEMI/TEM/MDIC-SECEX/ABICALÇADOS The industry itself is not much more than 150 years old - companies are typically small and labor-intensive, with no entry or exit barriers. 7#8Footwear sector Distribution of footwear production by continent in 2009 1,5% 1,9%. 1,6% 0,03% 5,6% 6,4% GrendeneⓇ Production 2009 Country (million pairs) China 9,500 India 2,100 Brazil 814 Vietnam 661 Indonesia Others 578 2,958 16,611 83,1% Total world production South America Asia Europe Africa Oceania I North & Central America Middle East The 5 principal countries produce: 13,653 million pairs = 82% of total world production. Source: World Shoe Review 2010 / ABICALÇADOS 00 8#9Grendene® The footwear sector in Brazil Million pairs Production Imports Exports Apparent consumption Per capita consumption 2006 2007 2008 2009 2010 2011 830 808 816 814 894 n/a 19 29 39 30 29 34 180 177 166 127 143 113 669 660 689 717 780 n/a 3.6 3.5 3.6 3.7 4.1 n/a Source: IEMI / SECEX / ABICALÇADOS (Cartilha Estatística 2011) n/a: Data not available Consumption - 2009 Total Per capita United Kindgom 410 6.6 Source: World Shoe USA 1,987 6.4 France 364 5.8 Review 2010/ ABICALÇADOS Japan 689 5.4 Italy 316 5.3 6#10Grendene® Brazil - increments in spending with changes in income group (clothing and footwear) +125% +141% +132% D/E C Group Group B Group A Group il Source: Exame magazine / Lojas Renner investor relations website 10#11Million pairs/year Grendene® Grendene x Brazilian footwear sector Brazilian production CAGR (2001/2010): 4.3% Grendene CAGR (2001/2010): 6.7% CAGR (9M10/9M11): (17.2%) 1000 897 916 180 877 894 166 169 900 830 808 816 814 160 145 146 146 800 700 642 610 600 500 400 300 200 100 Million pairs/year 140 130 132 121 116 120 94 100 80 60 40 20 0 2001 2002 2003 2004 Source: IEMI / Abicalçados 0 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 9M10 9M11 Grendene has grown faster than the Brazilian footwear industry. 11 120 100#12Milhões de pares/ano 0 2001 2002 2003 2004 Grendene® Exports: Grendene vs. Brazil Exportação Brasileira CAGR (2001-10): (2,0%) CAGR (2001-11): (4,1%) Grendene CAGR (2001-10): 15.5% VAR. (9M11/9M10): (27.0%) Var. (9M11/9M10): (24,7%) 250 60 55 212 48 48 50 200 189 190 180 177 171 164 166 143 150 127 113 109 100 82 Million pairs/year 40 41 40 32 27 29 28 30 2015 16 50 10 2005 2006 2007 2008 2009 2010 2011 9M10 9M11 0 Source: DECEX / MDIC / ABICALÇADOS Grendene's exports were 36.1% of total Brazilian footwear exports in 9M11 (37.2% in 9M10). 2007 2008 2009 2010 12 9M10 9M11 30#13GrendeneⓇ Less labor- intensive More capital- intensive Strategy: Break Paradigmas Higher entry barriers Highly marketing intensive Our expertise of 40 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. 13#14Products ■ Constant creation of products ■ Innovative design Manufacturing technology ■ Few products in large scale Value proposition Brands Marketing ■ Aggresive marketing ■ Licenses with ☐ celebrities ■ Segmentation ■ Investment in media/events Strong relationship with trade GrendeneⓇ Management ■ Scale gains, scope gains ■ Profitability ■ Continuous improvement ■ Financial solidity ▪■ Sustainable growth Value for stakeholders 14#15Products Grendene® 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 x benefit. 15#16400 ¡PANEMA 88 CARTAGO SPIDER SENSE SPIDER-MAN AVENTURA E CONFORTO NOS SEUS PES! Gisele Bündchen NICKELODEON BACKYARDIGANS gug 2010. pelos 10 anos do N°1 do mundo. Disney baby BEN ALIEN FORCE rider ¡PANEMA kids BADBOY Strawberry polly pocket TOY STORY BRILHA NO ESCURO! Doce Verão da Moranguinho! CN VEM COM RELOGIO TIMELINK grendha A moda sempre com você. MAX STEEL HE LO K TTY. L BAKUGAN 200 250 150 100 50 300 HOWHееLS COM LEDS XUXA Barbie#17Sales channels: Brazil GrendeneⓇ DI SANTINNI ride enjoy the ride Retail - Di Santinni Retail - Centauro adidas 17#18Barbie Grendene Sales channels: Brazil MESA&BANHO Grendene® IPANEMA Magazine - C&A Self-service - Carrefour 18#19Sales channels: Brazil GrendeneⓇ Select. distrib. – Doc Dog - Select. distrib. - Daslu 19#20GrendeneⓇ International sales channels IPANEMA had wick rider IPANEMA Monastiraki - Atenas Footlocker - Milão 20 20#21GrendeneⓇ International sales channels 10000 00000 JEAN PIERRE BUA DRIES VAN NOTEN JAN FALL GAULTER ST ON SALLING & DOLCE&GABBANA MARTHARDELA ALSANGERCOIN ACK DAEM HATTHEN WILLIANDONE AOARJORES www Fred Segal - Los Angeles Jean Pierre Bua - Barcelona 21#22GrendeneⓇ Galeria Melissa - Concept store Oscar Freire street, 827, São Paulo, SP O All rights reserved 22#23grendha by shakira Results (in IFRS) grendha GrendeneⓇ grendha lvete Sangalo 23#24Grendene® Main financial and economic indicators 9M10 9M11 Change % 9M10- 9M11 R$ million Net sales revenue Net income Margins % Gross EBIT EBITDA Net ¡PANEMA 1,116.4 975.7 (12.6%) 189.7 183.9 (3.1%) 9M10 9M11 Change p.p. 37.7% 40.8% 3.1 10.2% 9.5% (0.7) 12.1% 11.7% (0.4) 17.0% 18.8% 1.8 24#252006 2007 1.374 Gross sales revenue (IFRS) Gross sales revenue CAGR (2006-10): 9.8% Change % (9M10-9M11): (12.4%) (R$ million) Gross sales revenue Domestic market CAGR (2006-10): 8.2% Change % (9M10-9M11): (11.6%) GrendeneⓇ Gross sales revenue Exports CAGR (2010-06): 17.9% Change % (9M10-9M11): (15.7%) 1.999 1.819 1.5151.576 2008 2009 2010 9M10 9M11 1.394 1.221 1.604 1.464 1.266 1.220 1.170 2006 2007 2008 2009 2010 9M10 9M11 1.125 2006 995 249 205 2007 2008 2009 2010 9M10 25 395 356 355 9M11 269 227#26Gross sales revenue Market % Grendene® Sales volume 14,9% 16,5% 22,6% 19,5% 19,8% 19,3% 18,6% 23,9% 27,5% 32,7% 29,1% 32,2% 33,8% 29,8% 85,1% 83,5% 77,4% 80,5% 80,2% 80,7% 81,4% 76,1% 72,5% 67,3% 70,9% 67,8% 66,2% 70,2% 2006 2007 2008 2009 2010 9M10 9M11 Domestic market Exports 2006 2007 2008 2009 2010 9M10 9M11 Domestic market Exports 26#27Results (IFRS) Gross profit / Gross margin CAGR (2006-10): 6.9% Change % (9M10/9M11): (5.4%) (R$ million) EBIT / EBIT margin CAGR (2006-10): 5.0% Change % (9M10/9M11): (18.6%) 651 566 499 506 519 421 398 175 173 161 151 45,1% 42,2% 41,5% 38,9% 40,6% 40,8% 37,7% I 15,8% 14,5% 12,9% 10,4% 2010 9M10 9M11 2006 2007 2008 2009 212 114 GrendeneⓇ 93 13,2% 10,2% 9,5% 2010 9M10 9M11 27#28Results (IFRS) (R$ million) EBITDA / EBITDA margin CAGR (2006-10): 4.1% Change % (9M10-9M11): (15.4%) Net income / Net margin CAGR (2006-10): 5.0% Change % (9M10-9M11): (3.1%) 205 201 187 241 11 18,5% 16,7% 15,0% 177 12,2% 15,0% 135 12,1% 11,7% 2006 2007 2008 2009 2010 9M10 9M11 312 272 257 261 239 23,3% 21,7% 114 2006 2007 190 184 19,2% 18,7% 19,5% 17,0% 18,8% 2008 2009 2010 9M10 9M11 28 GrendeneⓇ#292006 146 146 132 2007 2008 2009 2010 9M10 9M11 120 100 Sales volume CAGR (2006-10): 6.5% Change % (9M10-9M11): (17.2%) 166 170 Sales volume (Million pairs) Sales volume - Domestic market CAGR (2010-06): 3.4% Change % (9M10-9M11): (12.2%) Sales volume Exports - CAGR (2010-06): 14.8% Change % (9M10-9M11): (27.0%) 2006 2007 2008 2009 117 115 106 100 99 2010 9M10 9M11 2006 80 60 70 32 32 2007 2008 2009 2010 9M10 29 9M11 55 48 48 41 40 30 30 GrendeneⓇ#30R$ milhões Grendene® Shareholder's equity and return on equity 28,1% 24,9% 20,3% 20,6% 21,3% 18,3% 1.047 1.180 1.318 1.465 1.676 1.740 2006 2007 2008 2009 2010 2011* * 30 de setembro de 2011. Shareholder's equity Return on equity % 30 30#31R$ million GrendeneⓇ Net cash, cash and cash equivalents and debt 1.151 1.184 1.119 1.031 860 845 859 1.021 983 942 852 793 815 756 (104) (52) (45) (178) (167) (164) (177) 31/03/10 30/06/10 Cash and cash equivalents Strong cash flow 30/09/10 31/12/10 31/03/11 30/06/11 30/09/11 Debt -O-Net cash 31#32R$ Dividends Grendene® R$ 0,4400 R$ 0,3991 R$ 0,4048 74,9% R$ 0,3633 R$ 0,3667 46,0% 45,5% 40,4% 38,9% 4,9% 6,7% 5,8% 4,7% 6,8% % 2007 2008 2009 2010 Dividend per share (R$) Dividend yield (%) 9M11 → Payout (%) Dividend yield: profit per share divided by average value of the share in the year. 32#33R$ million 40 40 35 30 25 20 T T 20 15 Low need for Capex Grendene® 20 24 35 33 27 24 10 5 0 2007 2008 2009 2010 9M10 9M11 33#34Grendene www.onlybyipanema.com RIO CHARM İPANEMA GrendeneⓇ Guidance Targets for: 2009 – 2013 / 2011-2015 - Growth of gross revenue at a CAGR between 8% and 12% in the five years. Growth of net profit at a CAGR between 12 and 15% in the five years. Advertising expenses: average: 8% - 10% of net revenue in this period. Our view is that, in this period, we may have years with greater growth that these rates, as was the case in 2009, and others with less growth, but on average we intend to meet this target.#35Thank You! Alexandre Grendene Bartelle Chief Executive Officer (5554) 2109.9000 Francisco Schmitt Investor Relations Officer [email protected] (5554) 2109.9022 Cátia Gastmann Secretary [email protected] (5554) 2109.9011 Further information GrendeneⓇ 40 Anos 40 years old Internet: http://ri.grendene.com.br/ Email: [email protected] 35