#1Portobello sumbente com que viver Environmental, Social and Corporate Sustainability REPORT 2020#2CONTENTS ABOUT PORTOBELLO PORTOBELLO'S WAY OF BEING SUSTAINABILITY FOR PORTOBELLO PORTOBELLO'S STRATEGIES ETHICS AND GOVERNANCE PILLARS OF SUSTAINABILITY THE PORTOBELLO OF THE FUTURE 38 1 47 57 24 51 Portobello Sustainability Report 2020 02#3About Portobello Portobello Sustainability Report 2020#4About Portobello Letter from the Chairman of the Board of Directors The consolidation of the Group's Busi- ness Units, combined with the prioritiza- tion of Portobello's position in the Retail market and its ability to adapt quickly and consistently to the adverse external context caused by the pandemic, trans- lated into significant results for the com- pany in 2020. The pandemic surprised us in March last year and our attention has turned to the protection and safety of peo- ple, always intending to preserve jo- bs, collaborating with the communities where we operate, and implementing safe alternatives to serve our customers and partners. We learned countless important les- sons last year and, guided by our purpose of transforming environments and thrilling people, we made advan- ces in the digitalization of the busi- nesses, accelerating the connection with our customers. We will continue to overcome the challenges of the pandemic, aiming to grow continuou- sly, always together. In 2020, we also advanced in the company's governance by creating ma- nagement committees connected to the Board of Directors, with emphasis on the Sustainability Committee. The ob- jectives of a more professional manage- ment in the Sustainability scope include guiding the strategic vision, integrating the Units' actions, and promoting a mo- re effective and structured action to ge- nerate positive impacts on the environ- ment, society, and business. Transparency and consistency, aligned with ESG principles, should promo- te greater visibility and accelerate the actions for sustainability. We believe in this evolution and, in addition to the in- formation in this report, our commitment to transparency is permanent. I thank you all, employees and part- ners, for the commitment to building a safer and more humane environment this year, which was such a challenging year. And I invite each one to make, together, the future as sustainable as possible, as quickly as possible. Portobello Cesar Gomes Junior Chairman of the Board of Directors Sustainability Report 2020 04#5About Portobello 折 Portobello Shop Brasília, one of the 11 new stores opened in 2020 31 120 2220 270 Portobello About Portobello Transforming environments and thrilling people The largest floor covering chain store in Brazil, Portobello is the country's leading brand and a major global competitor in the sector. With multichannel activities, its operations are structured across four business units: Portobello, a distributor for home improvement cen- ters and projects as well as an exporter to five continents; Portobello Shop, its retail brand, with 136 stores all over Brazil; Portobello Ameri- ca, the precursor to Portobello Group's internationalization, headquar- tered in the United States; and Pointer, a democratic design brand with a solid foothold in Northeast Brazil and a natural exporter. Design and innovation are the key competences of Portobello Group steering the development of its services and products, which are ma- de in the Tijucas and Marechal Deodoro factories, in the Brazilian sta- tes of Santa Catarina and Alagoas, respectively, as well as in major production and innovation hubs around the world by its outsourced partners. With an integrated view of sustainability, considering the environmen- tal, social and economic pillars, Portobello has in place a process of conscious and regenerative manufacturing, and operates with a constantly-expanding emphasis on this aspect with the ambition to implement best practices and inspire the entire chain towards an in- creasingly sustainable future. Sustainability Report 2020 05 50#6PORTOBELLO About Portobello 42 years of evolution Portobello hop 24.90 Portobello 1979 START of operations at Tijucas, Santa Catarina SC 1987 EXPANSION of industrial facilities, reaching the mark of 1 million m2/month 1993 CONSTRUCTION of a new industrial waste treatment plant and implementation of a closed-loop water system 1995 INTRODUCTION of production waste into the mixture FIRST furnace fitted with heat recovery technology. Currently, 12 out of the 14 furnaces in use by Portobello as well as Pointer's 2 furnaces employ heat recovery. 1997 CONSTRUCTION of a dedicated waste treatment plant for the polishing unit 1998 LAUNCH of the Portobello Shop franchise chain 2000 USE of 100% natural gas, a clean energy source, for furnaces and dryers 2004 CREATION of Anjos de Luz, a choir made up of children and teenagers from the municipality of Tijucas Sustainability Report 2020 06#7About Portobello Portobel Shop POINTER Portobello shop Merasa Pittos Janello Pocket Portobello Officina Portobell hodlo Parbhelby P Ho Purobuta Poto cbclc For P Pinball Portobella Portobello UN LTD. Coleção 2020 2008 CONSOLIDATION of the Portobello Shop chain, with 100 stores opening up LISTING in the Novo Mercado Bovespa stock exchange, and going public EXPANSION of industrial facilities 2012 PORTOBELLO becomes the largest ceramic tiles company in South America PORTOBELLO SHOP solidifies its position as the chief chain specialized in ceramic tiles in Brazil, with more than 110 stores 2015 START of operations at the new Northeast plant, in Marechal Deodoro, Alagoas, the most sustainable ceramic manufacturing facility in Latin America LAUNCH of democratic design brand Pointer 2016 GREEN BUILDING LEED certification for Portobello Shop São José SUSTAINABILITY report up to the GRI - Global Reporting Initiative standards CREATION of the Crescer Program, which has benefited over 1,000 children from the communities of Tijucas 2017 LAUNCH of Officina Portobello, producing furniture with sustainable materials SET UP of new dry grinding lines 2018 LAUNCH of Portobello America, in the United States SUBSCRIPTION to UN's Sustainable Development Goals (SDG) initiative LED LIGHTING SYSTEM at Portobello Shop stores 2019 LAUNCH of the Slabs Project Brasil 2020 LAUNCH of Unlimited Collection, featuring slabs that open up the possibilities for sustainable architecture PORTOBELLO SHOP has 136 stores all over Brazil Sustainability Report 2020 07 20#8Portobello's Way of Being Portobello Sustainability Report 2020#9Portobello's Way of Being Portobello Mission The statement we are making to the world, reflecting where Portobello stands, its purpose, attributes and values. The environment we live in is the essence of our business. We believe that design is the competence that makes us unique and innovative, transforms people's lives and is manifested in our products, environments and experiences with the brand. Our business environment is global, but the design must reflect the local context. Our culture, strategy and management should enable design creation and distribution. Portobello is generating value for all audiences through our integrated, retail- oriented model and with our operational efficiency measured by profit. Sustainability Report 2020 09#10Portobello's Way of Being Purpose The raison d'être of Portobello and the difference we wish to make in the world. Living the Design. Transforming environments and thrilling people. Vision Our goal for the future based on our potential abilities. Be the Brazilian leader and global protagonist in floor tile solutions for environments through design and innovation. Belief Values that steer our positioning and the way we develop our relationships. Life with design is smarter, more beautiful and safer. Portobello Sustainability Report 2020 10#11Sustainability for Portobello Portobello Sustainability Report 2020#12Sustainability for Portobello Portobello Sustainability for Portobello means being aware of our actions and the impact of our choices. It means understanding the responsibility that comes with being an integral part of our society and ecosystem. It means being committed to our entire production and distribution chain, helping to create a future in which we can all evolve together. Mining area in Campo Alegre, Santa Catarina Natural gas furnaces for firing ceramic tiles at the Tijucas manufacturing facility Sustainable slabs displayed at Portobello Shop in Florianópolis, Santa Catarina Ceramic tiles are brought to life in architectural plans Sustainability Report 2020 12 23#13Sustainability for Portobello Portobello's path to sustainability Looking after our employees, with respect and dignity Ensuring that the natural resources required for production are used rationally That the production process is not only socially and environmentally responsible, but also regenerative That the communities around us are built into the brand ecosystem That the waste we produce is repurposed Portobello Sustainability Report 2020 13#14Sustainability for Portobello Protecting the Environment Planet Earth is our home. And, for thousands of years, we have been using its natural resources to build our houses. Now we number over 7 billion. The only future worth ima- gining is one in which our management of architectural resources is smart, optimized and sustainable. Ceramic tiles replace non-renewable resources in a manner that is much more logical, technically and envi- ronmentally-wise. In the case of Portobello, they are ex- ceptionally sustainable. We worry about the way mineral deposits are explored and restored, about where the water we use comes from, about repurposing waste, about creating a positive im- pact for our communities. In our design process, architecture knows no bounds. In 2020, we distributed over 36 million square meters of sustainably-sourced tile coverings in Brazil and around the globe. On the following pages, we will show how we are working on creating the future we want. Portobello A mineral deposit that was environmentally restored and converted into a fish farm in Sustainability Report 2020 14#15regenerative extraction Earth The raw material used to make ceramics is earth itself, removed from shallow layers and mostly in areas close to our plants Portobello Mining area in Campo Alegre (Santa Catarina)#16Sustainability for Portobello regenerative extraction 90,000 m² 200 native seedlings 100% suppliers of restored areas planted at Cedro deposit, in São João (Sergipe) subjected to environmental assessment Earth Portobello Mining activities deserve special atten- tion to minimize their potential impact on biodiversity. Our raw materials come from our own sources and from third parties. Portobello-owned deposits account for 15% of extraction activities. We have laid down rules for restoring these deposits after they have been explored, respec- ting the natural vocation of these areas. In 2020, we promoted the environmental restoration of 90,000 square meters or 9 hectares in six different areas explored by Portobello Mining. For example, at the Cedro mineral depo- sit, located in São João, in the Northeast state of Sergipe, we planted 200 native tree seedlings in 2020. To offset a hot semi-arid climate that sees no rain for the better part of the year, we have im- plemented a drip irrigation system that slowly and directly provides water to the plant roots. This way we can be sure that the new seedlings will receive enough water to grow and that no water will be lost through evaporation. Moreover, the soil surrounding a seedling is always kept wet, which means this system uses the le- ast amount of water possible. We also manage the mined materials su- pplied by third parties. In these cases, we adopt pre-established criteria for managing social impacts and mining permits, conduc- ting regular audits intended to conserve biodi- versity, control water quality and reduce CO2 emissions. In 2020, we evaluated all of our 16 suppliers in terms of environmental impact. None of them were shown to be performing activities that cause significant effect. Other than extracting, we also remain vigi- lant as to how materials are disposed of. Ceramics are made almost entirely of earth. Therefore, if properly disposed of, they will create no impact for the environment. The right way to dispose of them is by using containers provided by qualified companies, who will then send them for recycling. Cera- mics are then ground and become a mate- rial to be used in construction. Disposal ins- tructions are detailed in the Portobello Shop Customer Manual. It is our company's goal to increasingly share these best practices. Sustainability Report 2020 16#17100% water reuse Water Moving water and the mechanical force of waterwheels turn clay into a very fine powder Portobello Water in the Campo Alegre deposit, explored by Portobello Mining#18Sustainability for Portobello 100% Volume of water captured for ceramic production (I/m²) Portobello Pointer 2018 6,31 2019 water reuse 2020 13,32 14,44 4,55 4,39 Water Total volume of recycled/reused industrial water (m³) Portobello 510.473 515.130 341.345 Portobello Water is an essential, but limited resource in our planet. Therefore, we have optimi- zed its use at both of our manufacturing facilities and our retail operations. At Tijucas, production employees a clo- sed-loop water system. This means all the water used in manufacturing is treated and reintroduced into the process. Water is lost only from evaporation, which is sent out through smokestacks as white vapor. We keep a close watch on the consump- tion of industrial water, through a drinking water consumption indicator. We won the 2020 Citizen Business Award in the envi- ronmental conservation category with a case study titled Efficient use of water in its operations, in November 2020. For 2021, we will be introducing Project Water, through which our employees will be able to participate more actively in the way we manage and use industrial water. Our technology evolution takes place also as equipment is systematically replaced. We have invested in equipment that uses the least amount of water possible, such as the new dry grinding unit, implemented into the product processing stage. Our goal for 2021 is to capture 13.21 liters of water per square meter of ceramics produced. The water we collect comes from our own sources, including groundwater and sur- face water, near our manufacturing facili- ties. We are careful about conserving the environment surrounding our waters. Fur- thermore, we are part of the Tijucas River Drainage Basin Committee, supporting ac- tions and decisions made. In 2020, there was an increase in groundwater use and a decrease in surface water use due to a drought that affected Santa Catarina. At the Marechal Deodoro manufacturing facility, we employ a dry manufacturing process that requires no water for grinding and uses it only for glazing and polishing. Compared to the wet process used in the Santa Catarina manufacturing facility, in 2020, dry manufacturing used 4.39 liters to make one square meter of ceramics whe- reas the former used 14.79 liters. Also in Alagoas, the water we use origina- tes from our own sources, thought they are all groundwater sources. After its industrial and sanitary uses, the water is treated and disposed of in compliance with environ- mental management standards. At the Portobello Shop chain, we encou- rage a conscious approach to water use. For the next few years, we are working on a standardized way to manage this resource. Our recommendations include using dual flush toilet tanks, which con- serve water, and dry cleaning windows. Moreover, rainwater is harvested in those stores where possible. Sustainability Report 2020 18#19clean energy Firet The shape of ceramics involves the technology of the presses and the heat energy along the line towards the furnaces Portobello Dryer from Officina Portobello#20Sustainability for Portobello Portobello D clean energy Energy consumption (GJ/m²) Portobello Pointer 2018 0,13 0,06 2019 2020 0,14 0,14 0,06 Fire Managing energy consumption is fundamen- tal for our company's sustainability, since the ceramics industry works with thermal pro- cesses. At both manufacturing facilities, he- at process efficiency is controlled on a daily basis, and we reuse the heat from furnaces and atomizers. The two manufacturing facilities also use natural gas as their main source of energy. This is the energy we utilize for thermal pro- cesses, that is, in our furnaces, dryers and atomizers. Despite not being a renewable source of energy, natural gas is considered clean, as it produces no soot or solid waste of any kind. It also has great heating value, which is of special interest to the ceramics industry due to specific consumption. This means that the energy loss rate of natural gas is close to zero. - 0,06 With natural gas, we have more heat and at the same time the least amount of energy possible. We use electric power as well: to light our facto- ries, for some of the production line equipment and at our administrative facilities. In this case, the electric power comes from the Brazilian energy grid, generated mainly in hydroelectric power plants and wind farms, that is, renewa- ble sources of energy. In our manufacturing and administrative facilities, we recently replaced incandescent and fluorescent light bulbs with LEDs. The Marechal Deodoro manufacturing facility also has a farm of solar panels measuring 80 square meters that produces 22 kWh and po- wers the facility's main grid. Portobello Shop stores have a standard lighting plan designed to ensure a balance between the best lighting to enhance customer experience and have the least energy consumption. A li- near system of diffuse lights creates an inviting atmosphere at the stores while ensures that enough power is saved to light the entire area. The light opening angle for spotlights used on Portobello products on display, which consume more energy, is calculated so as to reduce the need for additional points. At the stores opened in 2018 onward, which number more than 70, the entire lighting sys- tem uses LEDs, which consume approximately 20% less power compared to standard light bul- bs. LEDs also last much longer: 50,000 hours, enough to light one of our stores for approxima- tely 17 years. Comparatively, standard light bul- bs are good for just 6,000 hours. By doing so, Portobello Shop is avoiding the disposal of this type of waste. Energy Matrix Portobello ▪ 88,36% Natural gas ■ 11,24% Electric power Pointer 86,13% Natural gas ■ 13,87% Electric power Sustainability Report 2020 20 20#21AKKA Sustainability for Portobello The Slab plant furnace at Tijucas manufacturing facility is also measured for greenhouse gas emissions. Portobello Optimized Consumption The main source of heat used in the in- dustry is natural gas-also the cleanest and more environmentally-friendly of fuels. Every day we measure how much gas we use in our production process. Materials are handled internally around our plants primarily using natural gas- -powered vehicles, which account for approximately 90% of our fleet. We take full inventory of greenhouse ga- ses in our manufacturing units and use the data to inform our main actions and investments intended to reduce the use and generation of such gases. Direct greenhouse gas emissions as assessed by our controls have in- creased slightly each year at both Tijucas and Marechal Deodoro manu- facturing facilities. This is due to the increased quality of our product por- tfolio, with the production of tiles fea- turing larger formats and more ornate polished finishes. These actions are consistent with the sustainability of our business and were coordinated and planned for. 2018 2019 2020 Direct greenhouse gas emissions (kgCO₂eq/m²) Portobello Pointer 6,03 2,83 6,33 2,68 6,51 2,75 Sustainability Report 2020 21 21#2299,9% Ө waste repurposing Zero Waste The rate of recycling, reuse and recovery of the waste produced in Portobello's manufacturing process exceeds 99%. Each year we draw closer to zero waste Portobello Most of the waste produced in 2020, namely 96.06%, was reused into the ceramic mixture#23Sustainability for Portobello 99,9% Ө 2018 2019 waste repurposing 2020 Recycled materials used into the ceramic mixture (%) Portobello 15 - 20 22 - 24 Pointer 3 5 10 Zero Waste At the Tijucas manufacturing facility, 99.9% of all waste produced is either repurposed or recycled, thus promoting a circular and responsible economy. We manage all the waste we produce at our industrial and administrative facilities, including medical waste and waste from our cafeterias. Most part of this waste is reintroduced ba- ck into the production process as an ingre- dient of the ceramic mixture. This is what we call internal recycling. Materials that cannot be used in the mixture, such as metals, cardboard, oil, belts, electronic wa- ste, among others, are sent to be recycled externally. Just 0.07% of the waste goes unrecycled and is sent to landfills. We are moving closer to zero waste, with the goal of bringing this percentage down to abso- lute zero. All paper used in packaging is recycla- ble and all pallets are made from refo- rested wood. A reverse logistics initiative was implemented in our distribution cen- ters to recover pallets and metal sup- ports that can be reused. In 2020, 3,088 pallets and 4,254 supports ended up being recovered. At the Marechal Deodoro manufacturing facility, we started a project in 2020 for proper disposal of ceramic shards. We have intensified the reintroduction of this type of waste into the ceramic mixture. Ho- wever, it is also sent for external recycling. More specifically, it is sent to a business partner that uses our shards as a material for making cement. Waste Disposal Portobello ■96,09% Internal Recycling ■3,84% External Recycling ■0,07% Landfills Portobello Sustainability Report 2020 23#24Portobello's Strategies Portobello Sustainability Report 2020#25Portobello's Strategies Every year our company updates its strategic plan and every three years does a more in-depth review of the 5-Year Plan, as it happened in 2020 An integrated, retail- oriented model Is what guides our organizational strategy Advantages Our values and advantage attributes Brand Products Services Agility Connection with people Processes What guides our organizational strategy Business synergy Efficiency and profitability Innovation and sustainability Organizational Development Our company's culture provides a solid base for growth Meritocracy Valuing people Intrapreneurship Intraempreendedorismo Portobello Sustainability Report 2020 25 25#26Portobello's Strategies Advantages Our values and attributes Brand What our brand attributes translate to: Design, innovation, trust and quality Product An expression of the style, design consistency, innovation and portfolio of each brand. Services Solutions that create value for our in-store experience, integrated model, project creation, distribution, and installation and maintenance systems. Agility Flexibility, simplicity and the capacity to adapt quickly and efficiently Connection with people A relationship experience that can inspire, charm and engage. Portobello Sustainability Report 2020 26 26#27Portobello's Strategies Business Units Portobello Portobello The design brand that creates and distributes contemporary tile products and services to individuals and companies that seek to make projects and dreams come true with originality, quality and at a fair price. Portobello shop Portobello Shop is the retail chain specializing in ceramic tiles and complements, offering a unique shopping experience in stores and on digital environments, for specification and purchase of Portobello products. POINTER Pointer produces and distributes ceramic tiles for people looking for solutions with design, quality and competitive price. Portobello America A brand that combines Portobello's know-how and American DNA, creating, producing and distributing complete and competitive floor tile solutions. Sustainability Report 2020 27#28Portobello's Strategies Portobello Portobello Portobello Portobello Tijucas is a pioneer among the group's business units. It sets itself apart due to the combination of the manufac- turing facility and a focus on innovation and due to its commercially-efficient mul- tichannel distribution. Its commercial performance stands out in the traditional sector market on account of its distinguished portfolio, especially the large formats and slabs, constant new re- leases and operational excellence, parti- cularly its logistics and services areas. The multi-brand channel of Portobello Tijucas focuses on home improvement centers, where it has been solidifying its position as the chief tiles brand with a presence in 700 stores across Brazil. In 2020, these were host to PoS update ac- tions in 2020 to usher in a new concept of display. This new concept is made of self-sup- porting structures that allow for their reu- se when products are replaced-a more sustainable and practical solution imple- mented in more than 90 points of sale across the country and adopted towards the exporting channel as well. The projects and major works have a technical vocation, which demands a portfolio with specific characteristics to be used in different niche markets, spe- cialized services and a scale compati- ble with commercial works and the real estate market. With a dedicated custo- mer service team, Portobello has tallied more than 6,000 major works with its products. Portobello is a long-term exporter to more than 60 countries. The brand is renowned among customers for its design and inno- vation which have elevated Portobello to become a major global competitor in the tiles industry. Located in the Portobello Tijucas manu- facturing facility are several plants, mostly intended for the production of large for- mats. It was also there at Tijucas that the very first Slabs plant in Brazil was establi- shed, with capacity to produce formats of up to 1.80 x 3.60 meters. Slabs plant at the Tijucas manufacturing facility Sustainability Report 2020 28#29Portobello's Strategies Portobello Slabs represent a new paradigm in the market and have expanded the boun- daries of how porcelain is used in ar- chitecture as well as in design. The Slabs plant drives our innovation stra- tegy, and the consequences are felt across all departments of the company with logistical and, mainly, commercial challenges. The digital transformation of traditional dis- tribution channels picked up the pace in 2020, in terms of both structural systems and data intelligence, which propels advan- cements in management and services, and with respect to the customers' brand expe- rience through digital tools for specification and the replacement of catalogs with inte- ractive displays at the points of sale. In the second semester, the plants operated at maximum capacity Portobello Tijucas in 2020 700 points of sale throughout Brazil 97 points of sale featuring the new sustainable displays 90% increased investment in customer relations +60 countries exported to 6.200 works serviced in Engineering 100% production capacity in the second semester Sustainability Report 2020 29 29#30Portobello's Strategies dias Portobello Shop Brasília, one of chain's corporate stores Portobello Portobello shop Portobello shop The largest specialized retail chain in the country, with 136 stores, 17 of those being corporate stores, Portobello Shop offers a shopping experience centered around its customers, with complete so- lutions for tiles and complements, espe- cially tableware and metals. Officina Portobello, the group's porcelain brand, is one of the distinguishing elements of this experience, with an original portfolio of porcelain countertops and furniture. Portobello Shop stores set the standard in architecture and display for architec- ture professionals and their customers to have a design experience with the brand. During 2020, these stores hosted an exhi- bit to show off the Slabs System, bringing this experience to a new level. Stores ha- ve sustainability initiatives of their own, such as waste sorting, rainwater harves- ting and solar panels. Learn about +Architecture We are working on standardizing this re- source management across the entire chain in the near future. Architecture professionals play a central role in the specification process and in Portobello Shop's customer experience. They are part of a virtuous circle in the relationship with the brand. For creative exchanges and identification of market needs, dialogue is held constantly in a structured fashion through +Architecture program, which also recognizes the value of these professionals and increases the visibility of those who excel in their rela- tionship with the brand. Creative Collective, a project for creating a line of Portobello products with a group of renowned architects and held every year at architecturally-relevant venues, expresses how important this process is to the brand. Sustainability Report 2020 30#31Portobello's Strategies The Jundiaí distribution center started operations in 2020 Portobello The accelerated digital transformation of our times is also reflected in the spe- cification and shopping experience at Portobello Shop. Brand presence on social media focuses on inspirational, technical and educational content in addition to tools for project execution. Archtrends, a platform showing refe- rences and trends, leads the way for architecture professionals. At the stores, digital presence not only streamlines quotation and purchase processes, but it also has a surprising effect with its design and specification tools. The wide reach of the retail chain, the diversified portfolio to create a complete solution and the support provided to end customers are the reasons why logistics is one of the brand's most important du- ties and competences. Portobello Shop has a domestic network of distribution centers to service all cus- tomers directly and believes that their ex- perience with the brand begins at inspira- tion and goes all the way through to when the product is delivered. At the forefront of the group's strategy, Portobello Shop pilots an integrated re- tail model that allows the brand to have control over the entire chain, from raw materials to sales to end consumers, and provides the foundations for envisioning the evolution from a manufacturing facility with a store chain into a store chain with a manufacturing facility. Sustainability Report 2020 31#32Portobello's Strategies LASTRAS. PORTOBELLO. POSSIBILIDADES LIMITADAS PARA REVESTIR MOBILIARE DECORAR MOSTRA UN LTD. tra ello MOSTRA paulo mendes da rocha andezhda mendes darocha akar metsavaht Coletivo criativo celo rosenbaum ia pomerantze bernardo vone 120 Live broadcast of the opening reception of Unltd Exhibit, an architecture exhibit that is 100% digital Portobello Shop in 2020 136 Portobello Shop stores across Brazil 11 new Portobello Shop stores Portobello T+arquitetura Portobello Archtrends Summit, a series of lectures for architecture professionals, early in 2020, before the pandemic broke out 2.500 architecture professionals at Archtrends Summit +8.000 people signed up for Unltd Exhibit, the country's largest architecture event Sustainability Report 2020 32 2 CLINK#33Portobello's Strategies Portobello Solidarity that is born out of hardship.2020 saw important social actions promoted by Portobello, which expanded into a nation-wide program COLETIVO SOLIDÁRIO The Coletivo Solidário is an initiati- ve that combines the strength of the Portobello brand, the unifying and mobilizing potential of Portobello Shop stores and the social initiatives of our architecture and design par- tners to, collectively, advance good actions in all of Brazil. A digital platform publishes and pro- motes good ideas turned into actions to help our communities. One example took place in March, during Easter, when Portobello Shop Campinas, in Santa Catarina, offe- red food to the homeless and the poor. Each volunteer cooked 10 me- als at their own home and brought them to the store, which then han- ded them out. For its part, Portobello Shop Bauru, in São Paulo, donated tiles to reno- vate the house of a poor family as part of a project headed by archi- tect Giovanna Ghirardello. Another interesting project in this areas is Mãos à Sobra, sponsored by Porto- bello Shop Catalão, in Goiás, which collects leftover building materials to renovate the houses of poor families and charitable organizations. Learn more about the social projects supported by the Portobello Shop chain stores CHARITABLE WINTER A nation-wide campaign promoted by Portobello Shop that collects clo- thing, blanket and food donations. Over the months of July and August, 61 stores encouraged their partners, employees, customers and desig- ners to donate. In return, for every 10 articles of clo- thing or for every blanket collected Portobello Shop donated an amount equivalent to a blanket; and for every 10 kilograms of food or for every ba- sic food basket collected Portobello Shop donated an amount equivalent to a basic food basket. M 3.414 peças de roupas arrecadadas 730 cestas básicas arrecadadas 65 cobertores arrecadados R$ 30 mil doados pela franqueadora para que as lojas destinem a instituições locais Sustainability Report 2020 33#34Portobello's Strategies POINTER Portobello A CASA COM FOINTER POINTER Mars design om sul vide POINTER POINTER The group's democratic design brand takes on the challenge of product affordability and di- fferentiation in the Northeast region of Brazil, in addition to exporting to several other countries. Pointer sets itself apart in the market due to the unpretentious and modern fashion products are displayed, to a standard system that makes it easier for product returns and to how fast it can be implemented and updated in-store. In 2020, project PoS 500 was a highlight as it managed to quickly renew the 500 most important points of sale of the brand. Pointer's interactive display, which can be found at its main points of sale, offers a digital expe- rience where customers can specify their pro- ducts, render environment simulators, find tech- nical information and view inspiring images. Pointer's manufacturing facility is located in Ma- rechal Deodoro and is one of the world's most modern and sustainable with its dry manufactu- ring process, in which raw materials require no water to be ground up during milling. Solar panels in the Marechal Deodoro manufacturing facility Pointer PoS at a home improvement center in Maceió (Alagoas) featuring an interactive display. Photo taken February 2020 Sustainability Report 2020 34#35Portobello's Strategies Architect Maurício Arruda, Pointer's spokesperson for the Good Ideas! digital campaign Portobello POINTER blog. Revestimento do futuro: cerâmica é aposta pós- pandemia 5 ideias para re a cozinha Revestimentos Madeira natural X madeira em cerámica As representações de madeiras em ceramica conquistam cada dia mais espaço entre as pessoas que procuram um otimo custo-beneficio para criar decorações aconchegantes, mas sem Neve Revestimentic f@ Cerâmi relevo 3 paredes surpree The Pointer Blog home page, featuring content that helps people plan out and do their tile-related renovations without the assistance of an architecture professional. Conexões Casa webseries, Instagram livestream with with photographer Lufe Gomes architect Patricia Pomerantzeff During 2020, in spite of the challenges brou- Ight about by the pandemic, Pointer was able to expand its distribution and reach the mark of more than 1,000 customers served. The spread and inward movement of opera- tions are central aspects for its affordability strategy and require increasingly more ad- vanced digital technologies in relation to bo- th commercial management and to connect the brand with its audiences. Pointer is a connected brand, particularly on social media, where interactions have been constantly and consistently increasing with respect to its posted content, which helps people plan out and do their tile-rela- ted renovations without the assistance of an architecture professional. Pointer in 2020 +1.000 points of sale in the North and Northeast regions of Brazil 500 resales with Pointer Superceramics 512 points of sale with the new Superceramics sustainable displays +600 + Good Ideas! shared as part of a digital campaign +40.000 Instagram followers +1.200 millions of blog page views Sustainability Report 2020 35#36Portobello's Strategies Superceramics The most financially and environmentally cost-effective option Sustainability Energy used to produce Water used to produce Break Resistant Wear Resistant Design Price Installation Price CERAMICS SA SUPERCERAMICS : 6 PORCELAIN $$$ $$$ Portobello Pointer's portfolio is where its democratic de- sign strategy comes into being, uniting aesthe- tics and technology. The concept of Supercera- mics, an exclusivity of Pointer's since 2018, is expressed in the combination of large ceramic formats and constant new releases in line with the latest interior design trends. Superceramics created a new class of pro- ducts that offer greater added value compared to standard ceramics and that are more affor- dable in contrast to porcelain. On top of large formats, Superceramics inno- vated by introducing rectified tiles, allowing for smaller grout lines, and polished surfaces, cha- racteristics that are typical of porcelain tiles. Sustainability Report 2020 36#37Portobello's Strategies 1600 Portobello America Warehouse in Pompano, Florida Portobello 1600 Portobello Amenca Portobello America The internationalization of operations, intensi- fying the business' sustainability, expresses one of the group's strategic priorities. The US market was the one chosen to begin the internationalization of the company for both being commercially attractive to the seg- ment and being a good location to make business possible with Canada and Central America. a positioning strategy focused on offering. them unique services and solutions: An ex- clusive and distinguished portfolio, exper- tise in retail and logistics and commercial operations that make intense use of digital technologies. Portobello America was introduced to cus- tomers in December 2018, as a project de- signed to be implemented in stages, initially focusing on distribution, through global sour- Icing in Brazil, Europe and the US, then on local manufacturing. Concierge, a B2B platform and a pioneer in the US market, became available in 2020 offering procurement services, ability to view stocks, and other features. Concierge Por- tobello America shows how committed the company is to digital innovation. The company owns three warehouses that serve a network of US distributors. They are strategically located in Florida, Texas and Tennessee the latter of which is set to be- come the industrial headquarters of Porto- bello America. With the restrictions on personal interac- tions and the absence of Coverings, the top trade fair in the US market, in 2020, Porto- bello America developed a product release strategy that combined sending samples of products and the concept of unboxing. A special way to surprise customers who opened up the boxes during an online me- eting with brand representatives and who were able to experience a storytelling pre- sentation. Commercial results proved sur- prising and once again expressed how in- novative the brand is. In 2020, an atypical year due to the pan- demic, Portobello America made progress in the consolidation of its customers with ▷ Learn more about Concierge Portobello America Relatório de Sustentabilidade 2020 37#38Portobello's Strategies Guilherme Wentz, the designer of Planos line, released in 2020. The Creative Collective, co-creators of the Berliner, a 2020 release, Harpa and Dansk lines. Portobello Jader Almeida, the designer of Ícaro, Codice and Sonatta lines. Ruy Ohtake, the designer of Ohtake line. Officina Portobello The art of porcelain tiling Officina is the group's brand that offers unique solu- tions in the art of porcelain tiling. It combines master handmade craftsmanship and cutting-edge technolo- gy together to make countertops, special cuts, design objects and furniture using Portobello porcelain tiles. The continuous surfaces on Slabs allow for porcelain to be used as raw materials for furniture, lending Offi- cina Portobello an edge within this new context, es- pecially in the composition of complete solutions offe- red at Portobello Shop stores. An exclusive and original portfolio forges the iden- tity of Officina, with lines and systems that provide solutions for countertops, niches and finishes for bathrooms, kitchens and other home environments. Major Brazilian designers have created collections with Officina Portobello. Officina Portobello produces the art of porcelain tiling using sustainable processes and materials. Moreover, it offers an alternative to the use of natural resources that have a greater impact on the environment. Officina's two manufacturing facilities, in São Paulo and in Tijucas, employ closed-loop water systems in addition to following all environmental standards. Sustainability Report 2020 38#39Portobello's Strategies 120 260 120 120 260 12 260 120 270 Slab plant in Tijucas Slabs displayed at Portobello Shop in Florianópolis, Santa Catarina. Portobello POSSIBILID LIMITADAS PARA REVE MOBILIAR The future of porcelain tiling. Portobello Slabs System. Covering, furnishing and decorating with more innovation and sustainability Slabs represent a technological revolution in the ceramics industry, predicated on a new production process that uses a different pressing method. It all began in the early 2000s when continuous pressing was developed in Italy and evolved to become a new paradigm for tiles. The very large formats and a flexibility of widths have expanded the use of ceramic surfaces into nobler areas of ar- chitecture, in addition to allowing new uses in de- sign and furniture. The comparison against slabs made of natural stone accentuated the technical advantages and the more sustainable traits of the manufacturing process. Portobello launched the Slabs Project in 2019 with the commissioning of stage one at its manufactu- ring facility. Later, in March 2020, Portobello relea- sed its Slabs during trade show Revestir, where it introduced a portfolio that was in line with the ma- jor global players in the industry. Sustainability Report 2020 39#40Portobello's Strategies Slabs on display at Portobello Shop in Florianópolis The Slabs designed by Nordik Wook allow the production of large tabletops 120x270 Mont Blanc slabs covering a wall all the way up, with no cuts H H Portobello In a year of constraints caused by the pandemic, the company structured its several different departments to become the market leader. Following the industrial investments, after another stage was completed and production started in November 2020, it was now time for commercial challenges to take center stage of the project. New forms of displaying products at Portobello Shop stores, proactive creation of a new culture for using ceramic surfaces, qualified staff and partners, original product portfolio and development of new furniture distribution channels are all part of the consolidation of the Portobello Slabs Project. Calacatta Puro and Black Eclipse Slabs at Casa de Banho, an environment by Jayme Bernardo and Glei Tomazi at UNLTD Exhibit Sustainability Report 2020 40#41Portobello's Strategies A more sustainable alternative The evolution of design and technology allows porcelain Slabs to emulate materials such as wood, marble and other natural stones, with technical characteristics more suitable for use as tiles and with less environmental impact MARBLE Extraction of raw material from deep depths Definitive transformation of the natural landscape WOOD Intensive use, not being able to be replaced in several industries SLABS Raw material from more superficial layers Restoring explored areas to their original vocation <50% % OOOOO very low use rate Pits concentrated in a few locations Low use rate QQ Reforestation that impacts diversity >99% use Local supply of raw materials Portobello Sustainability Report 2020 41#42Portobello's Strategies Unlimited possibilities to cover, furnish and decorate COVER • Siding Indoor areas • Continuous surfaces • Floors and walls FURNISH • Tables ⚫Kitchen countertops ⚫Bathroom countertops • Niches DECORATE • Mosaics • Boiserie Decorative items ⚫ Accessories хох Slabs System: one surface, various formats 160 320 120 270 90 180 120 120 Portobello 98 90 90 Sustainability Report 2020 42#43Portobello's Strategies Hochtend's Quartos Piscinas Grandes obras The experience with technology ought to be unique, smooth and Portobello Digital Transformation The environment we live in, the very essence of our business, turns increasingly digital The Portobello digital ecosystem, customer- -oriented and sustaining a unique, smooth and agile brand experience, is the finish li- ne of the digital transformation currently in progress within the group. It makes for an experience supported by technology and enjoyed in all environments and points of contact with the brand. The main pillars of this process are: Robust Structural Systems - Consistent, solid and flexible technological foundations to support the operating and transactional challenges of all of the group's business units. A proper technological structure is key to a seamless customer experience. Integration Platform A dynamic view of business needs and tools requires an environment that is prepared to constantly integrate and adapt to its immediate context. Cloud Strategy - Data storage and access must be convenient and secure. Artificial Intelligence - Information to create value for customers and business alike. A new way to learn constantly as the customer experience evolves. Technology Made for People - We are preparing ourselves for an era in which technology will be invisible and the experiences with design and innovation will grow even more customized. We believe machines must adapt to people and not the other way around. Portobello's way of being and advantages must also become part of the digital ecosystem of the brand. To learn more about how Portobello handles personal information, email [email protected]. Sustainability Report 2020 43#44Portobello's Strategies ARCHTRENDS Trends and references content platform Portobello Digital Ecosystem Unlimited Experience Materialized ONLINE SPECIFICATION SYSTEM Website, Virtual Specifier, online quotation Grupo Portobello Portobello Portobello Shop Portobello América Pointer SOCIAL MEDIA Interaction and content to produce information Smart manufacturing SAMPLE POINTER SYSTEMS Experience and convenience B2B PLATFORM Connected spreading IN-STORE PHYGITAL EXPERIENCE Complete Portobello solutions, quick projects, digital reference library, agile and simple operation E-COMMERCE Officina Portobello PORTOBELLO COMMERCIAL PLATFORM B2B Staff PORTOBELLO DELIVERY SYSTEM Fast, reliable, professional, online tracking RETAIL SERVICES Laying, DIGITAL CORNER Portobello PoS lifting, credit solutions, remote service, sample delivery POINTER Environment Simulator pos UNBOXING PORTOBELLO CONCIERGE Phygital PBA B2B Platform +ARCHITECTURE Creating value for architecture professionals/ CRM PORTOBELLO SERVICES Collaborative, logistics INDUSTRY 4.0 Robust Structural Systems API System Integration Platform Flexible Systems Architecture Cloud strategy Artificial Intelligence Salesforce/Oracle PILLARS THAT SUPPORT THE PORTOBELLO DIGITAL ECOSYSTEM Technology Made for People Portobello Sustainability Report 2020 44#45Portobello's Strategies Archtrends Grandes bras SUM ME TV Touch, one of the digital tools available at Portobello Shop stores Archtrends Portobello Projetos e Obras v Profissionals w Portobellov > FAÇA PARTE DO ARCHTRENDS LOGIN Portobello In 2020, we intensified our efforts to protect personal information by raising awareness among all Portobello Group employees Portobello Portobello Shop Lojas Todas as Linhas Materiais essenciais para arquitetura em porcelanato Quic ♡и = O verde que dá vida Neste Dia da Mulher, conheça o décor de um apartamento na arborizada João Pessoa (PB), residido e assinado pela arquiteta Leila Azzouz MILLENA RAMOS on Forbes DIA DA MULHER As engenheiras, arquitetas e designers que mudaram suas profissões TRANSPORTE DE LASTRAS Conheça técnicas que envolvem a movimentação das superficies continuas MOVEL DOS SONHOS Designer Carolina Reis- elege revestimentos atemporais Portobello LINHA PANEMA Coleção Portobello é inspirada nas curvas da cidade maravilhosa VER MAIS Mármores Quartzites Concretos Pedras Madeiras Metais Terrazzo Sticos Alternativas para decorar e personalizar Ti Past Anjana Decorados Relevos Cobogle Mosaicos Cortes Especia Archtrends is Portobello's trends and references content platform. It has more than 236,000 visitors per month The Portobello website features a technological structure that is conducive to a seamless customer experience Portobello GENERAL LAW ON PROTECTION OF PERSONAL DATA Portobello has always acted with a view to protecting the data of its customers and since 2019 has had a dedicated work group for adapting to Brazil's General Law on Protection of Personal Data, which came into effect in September 2020. Sustainability Report 2020 45 55#46Portobello's Strategies 2020 in Figures at Portobello 36,544 milions m² of ceramic tiles produced 3.607 direct jobs 100% capacity at manufacturing facilities in the 2nd semester 100% deposits restored after exploration 100% clean energy +236.000 monthly visitors to Archtrends 100% digital at Unltd Exhibit, Franchisee Convention and Agenda 21 +55.000 visitors during Revestir Expo +1.000m² booth at Revestir Expo 3 consecutive new sales records set Portobello Portobello Sustainability Report 2020 46#47Ethics and Governance Portobello Sustainability Report 2020#48Ethics and Governance Governance Profile Portobello has been listed in the Novo Mercado Bovespa stock exchange since April 2008. Our corporate governance practices are transparent, as required by the Corporate Law of Brazil. Moreover, we have voluntarily committed to complying with even more stringent rules. View our corporate governance tools Board of Directors and Statutory Board Manage Portobello in accordance with the Corporate Law of Brazil, the Novo Mercado Bovespa stock exchange and the Company's Articles of Incorporation. Portobello Audit Committee A permanent and independent body, it provides the company with information and analyses regarding this area, ensuring greater control and contributing to best governance practices. Sustainability Committee Sustainability for us plays a central role in the group's governance. The Sustainability Committee takes part in strategic decisions on a corporate level. Code of Ethics Shared with the internal audience, it guides and ensures transparency in the relationships with the brand. Ethics Committee Supports the company's governance in the application and enforcement of ethical principles. Controlling Group Exercises family governance in search of long-term stability and value generation for the company. Sustainability Report 2020 48#49Ethics and Governance INTEGRITY Bribery or corruption practices of any kind are unacceptable. VALUING PEOPLE A safe and healthy workplace environment where people are free to express themselves and respect others' integrity and privacy. INDIVIDUALITY AND PRIVACY We condemn any and all acts of discrimination due but not limited to origin, social condition, hierarchy level, education, religion, disability, color, race, sex, marital status, politics, among others. COMMUNITY AND ENVIRONMENT Support to initiatives to build and value civic education, eradicate poverty and reduce social inequality by means of actions and projects mainly geared towards education. Code of Ethics Transparency is part of our contemporary context. We invite everyone at Portobello Group to adhere to our Code of Ethics, sustaining a balance in our activities between being economically profitable, environmentally correct and socially responsible. CONSTRUCTIVE RELATIONSHIPS We must hire suppliers and build business relations with partners who operate under ethical standards that are compatible to ours, by adopting a strict selection process. These are some of the highlights from our Code of Ethics. Read the entire document SOCIAL AND ENVIRONMENTAL RESPONSIBILITY We encourage volunteer work, supporting poor communities and charitable organizations. We must firmly commit to practicing, encouraging and valuing environmental conservation, seeking to converge business goals and the desires and interests of our communities, always in line with sustainable development. Portobello Sustainability Report 2020 49#50Ethics and Governance Governance Profile BOARD OF DIRECTORS 2020 Cesar Gomes Junior Claudio Ávila da Silva Nilton Torres de Bastos Filho Geraldo Luciano Mattos Junior Glauco José Côrte Marcos Gouvêa de Souza Walter Roberto de Oliveira Longo Chairman of the Board Vice Chairman of the Board Board Member Independent Board Member Independent Board Member Independent Board Member Independent Board Member AUDIT COMMITTEE 2020 Jorge Muller Maro Marcos Haldlich Filho Peter Edward Mr Wilson DIRECTORS OF BUSINESS UNITS João Henrique Sampaio Oliveira Luciano de Liz Barboza CEO, Portobello Tijucas Luiz Felipe Lenz Brito Diogenes Ghellere Portobello From left to right: Mauro do Valle Pereira, CEO; Ronei Gomes, Director and VP of Finance and Investor Relations; Cesar Gomes Junior, Chairman of the Board; Claudio Ávila da Silva; Vice Chairman of the Board; and Edson Stringari, Director and VP of Legal. STATUTORY BOARD 2020 Mauro do Valle Pereira ....... CEO, Portobello Shop CEO, Portobello America CEO, Pointer Ronei Gomes Edson Stringari Chief Executive Officer Director, Vice President of Finance and Investor Relations Director, Vice President of Legal Sustainability Report 2020 50 50#51Pillars of Sustainability Portobello Sustainability Report 2020#52Pillars of Sustainability PROXIMITY AND COMMUNITY INVOLVEMENT Strong relationship with the communities of Tijucas and Marechal Deodoro, social license to operate and alignment of expectations, impact on the workplace GOVERNANCE AND TRANSPARENCY Visibility to stakeholders, image and reputation management, ethics and anti-corruption practices Portobello Materiality Eight topics of great relevance and priority within the context of sustainability and which guide the way Portobello is managed OCCUPATIONAL HEALTH AND SAFETY Safety culture, well-established practices, attention to industrial activity 81 EXCELLENCE IN MANAGING ADVANTAGES Conservative management in periods of crisis, expansion of competitive advantages, management of brands PERSONNEL MANAGEMENT AND DEVELOPMENT A topic that is transversal to several aspects, human capital deemed strategic, need to broaden the organizational climate 7 6 2 54 3 PRODUCT INNOVATION Demand for sustainable products, search for product differentiation, market positioning OPERATIONAL EXCELLENCE Eco-efficiency across the entire process SUSTAINABLE SUPPLY CHAIN Traceability and source of raw materials, development of suppliers, liability and risks in the chain Sustainability Report 2020 52 52#53Portobello products, with Slabs highlighted, at Portobello Shop Brasília E Our product + XX ote B We strive tirelessly to enhance the different stages of our productive and creative processes so we can take care and help recover the planet we live on Sustainability Report 2020 Portobello ASTRAS. P ELANCERA SUSTENTAVEL DERE LMSICAL NA NOOL 00#54Pillars of Sustainability Portobello + our product хх All Portobello products are made in a sustainable manner, respecting biodiversity and the use of natural resources Guidelines that steer the company's actions: • Practice sustainable design and innovation; ⚫Boost the sustainability of ceramic materials, especially in regard to the deposits of raw materials, to energy, to water and to waste management; • Cultivate and encourage best practices aimed at environmental protection. O FUTURO DA ARQUITETURA. PORCELANATERIA SUSTENTÁVEL. PORCELANATO Through the pillar called "Our Product", Portobello contributes to the following UN Sustainable Goals APOTAVL 6 RECUPESCADAS A >99% MARMORE SRANCES PROVEMENT <50% CAB CENTER O MADEIRA Mostranst WIACTA & DIVEPODAte SAND APROVEITAMENTS 12 CONSUME PRODUC ESPONSAVERS Q 13 15 Clean Water and Sanitation 12 Responsible Consumption and Production ACAO CONTRA 13 DOCLIMA Climate Action 15 Terrestrial ecosystem protection Sustainability Report 2020 54 54#55Pillars of Sustainability Naturalmente sustentável Ceramic tiles are sustainable by nature regenerative extraction RECOVERABLE DEPOSITS The main raw material for ceramics is clay, removed from more superficial layers than other natural materials, an essential characteristic for the recovery of the deposit areas. RECYCLABLE No environmental impact when it is disposed of and it can recyclable be reincorporated into similar production processes or reused 100% no allergens sterile product NO ALLERGENS Inert material that does not allow the proliferation of mites, bacteria, fungi and molds. water reuse as an input in the basic stages of civil construction. NO VOCs Ceramic is inorganic, fire resistant emitting no volatile organic compounds, which are gases harmful to the respiratory system. toxic product FIRE RESISTANT It does not release toxic smoke in extreme situations. NO FORMALDEHYDE Ceramics do not contain binders, including formaldehyde, which is harmful to health. Portobello Sustainability Report 2020 55 55#56Pillars of Sustainability DEPOSITS Raw materials are extracted exercising care, respect and responsibility. ↑ Portobello f PRODUCT CONCEPTION A transversal rationale that considers aspects of design, efficiency and sustainability in all stages of development. CERAMIC PRODUCTION Where technology and design become tools to create increasingly sustainable solutions. о ° O 00 00000 OOOO QUALITY CONTROL A balance between technological precision and the watchful eye of technicians dedicated to offering satisfaction and peace of mind to Portobello customers through meticulous quality control. WASTE REPURPOSING Items that are rejected by quality control are recycled. Portobello Product Journey CONSCIOUS CONSUMPTION By choosing socially responsible products, consumers become part of a virtuous circle of sustainability. K Learn all about the stages Portobello products go through and how the company handles each of these stages Portobello SHOPPING EXPERIENCE حمد Whether at a brick and mortar or an online environment, Portobello endeavors tirelessly to offer an assertive and charming shopping experience. K DISTRIBUTION In considering all stages from the extraction of raw materials to the use of its products, Portobello invests in its distribution models through technology and planning. к RESPONSIBLE PACKAGING Much like its products, the packaging used by Portobello undergoes constant enhancement processes in the interest of efficiency as well as of reducing social and environmental impacts. Sustainability Report 2020 56#57our people We value the people from our communities and believe in their ability to evolve and change the world for the better Children from the Crescer Program. Photo taken in 2019. Programa Crescer Portobello Progra Portobe Creacer Portobello S Programa Crescer Portobello Crescer Sustainabil Report 20#58Pillars of Sustainability our people ΠΩΩ We care about the well-being of our employees and the people around us, contributing to create sustainable and diverse communities Guidelines that steer the company's actions: •Promote people's health, safety, well-being and development; Prioritize children and sports in social projects; • Act as a partner of the community, supporting good initiatives of social responsibility; • Promote culture and encourage employees to participate in volunteer actions. LASTRAS PORTOBELLO DE POSSIBILIDADES Portobello Through the pillar called "Our People", Portobello contributes to the following UN Sustainable Goals 3 10 RA SADDLE QUALIDADE DESSADES EXGALINGS 11 16 3 Good Health and Well-being 4 Quality Education 10 Reduced Inequalities 11 Sustainable Cities and Communities PAL JUSTICAL EFICAZES - 16 Peace, Justice and Strong Institutions Sustainability Report 2020 58#59Pillars of Sustainability IT POINTER Plurality at Portobello We will become an increasingly more plural We understand that diversity creates an environment that is more productive and open to innovation. Different people with different viewpoints, ex- periences and cultures, coupled with the will to make things bigger and better, being respectful, receptive and collaborative-that is how we will evolve further and further. Different, but with so- mething in common: our passion for design. This is our greatest strength. We know that we still have a long way to go, but our progress depends on our com- mitment to this vision. The next generation of leaders is plural. And a more plural futu- re begins with being more accepting and with more opportunities. This is everyone's commitment. Portobello Sustainability Report 2020 59#60Pillars of Sustainability Direct Jobs 2018 2019 2020 Employees by gender Portobello 27,3% Women 3.240 3.434 3.607 18% Women Pointer 72,7% 82% Men Men Portobello Shop 47,5% Women 52,5% Men Portobello América 27,6% Women 72,4% Men people with disabilities (PWD) 3,6% young trainees Portobello 160 31 internship Sustainability Report 2020 60 60#61Pillars of Sustainability health and safety Our company believes that health and safety are interdependent The 2020 pandemic posed many challenges as far as health and safety goes. Other than standard programs, which often had to be reinvented, several other actions were implemented to raise aware- ness and prevent Covid-19. Learn all about them on the next pages. To prevent the spread of Covid-19, we were unable to conduct training activities and major events, such as SIPAT. But that did not stop us from looking for alternatives to rai- se the awareness of our employe- es. We promoted online seminars about topics of health and safety, educational checkpoints and infor- mational materials on our internal networks. By doing so, we managed to re- duce absenteeism, which is when someone stays away from work for any reason, at the Portobello and Pointer manufacturing facili- ties, in comparison with 2019. We got through 2020 without any lost- -time accidents at four manufactu- ring units. One of them has gone for 45 months without accidents of this kind. We are always seeking to evolve in this regard. We also redu- ced the number of total accidents. 16% reduction of total accidents at the Portobello manufacturing unit in 2020 zero fatalities and occupational illnesses in 2018, 2019 and 2020 older Portobello Sustainability Report 2020 61#62Pillars of Sustainability health and safety Managing Covid-19 Amid the health crisis, Portobello reiterated its responsibility to uphold the safety and well-being of all its employees and the community MONITORING GROUP Created to monitor and integrate actions to combat Covid-19 across Portobello Group. CONTINGENCY PLAN Involving actions and strategies developed for preventing the disease and handling suspect or confirmed cases. SOCIAL DISTANCING Mandatory in public transportation, cafeterias and all areas of the company. Administrative employees were sent to work remotely. PREVENTION ACTIONS Recommendations, medical checkups, face masks handed out to all employees, hand sanitizers available and testing of suspect cases. JOB SECURITY Portobello did not terminate any jobs because of the crisis and reduced working hours by 25% per Presidential Decree 936. 100% DIGITAL All events happening post-Revestir, the highlights being the Franchisee Convention, Unltd Exhibit and the Slabs workshops. Portobello Sala de Reuniões Covelano Fique ligado(a) nos sintomas do coronavirus! Os sinas comuns den sic Cance Of a man gris de donça alo Ferg de Padar ou Doras cabeça qu no ogro a 00 Pia on la Frem CHRE Cakes Honeckarts & cade fa roces dos deglos de Portobello Grupo PORSCHELLD ALERTA Saagles tors inpactam dirstamente se Sustainability Report 2020 29 62#63Pillars of Sustainability 01.000 rapid tests Acquired and intended for employees and for tracking all suspect and confirmed cases BRL 90,000 Donated to Lar Santa Maria da Paz charity, in Tijucas, along with food, hygiene products and medications 4 mechanical ventilators and monitors Donated to São José Hospital, in Tijucas 113 basic food baskets Donated to Vidal Ramos Foundation, in Florianópolis Collective Care Together with internal actions geared towards employee safety, Portobello Group also made significant donations to combat Covid-19 14 14.000 face masks Handed out to the Tijucas Health Office, São José Hospital, communities in Santa Catarina, Pointer employees and Vergel Community 300 basic food baskets and hygiene kits Donated to Vergel Community, in cooperation with NGO Mandaver, and to the Alagoas Economic Development and Tourism Office Portobello Sustainability Report 2020 63#64Pillars of Sustainability social programs We believe that by prioritizing children and sports we are helping create a better future. Therefore, we run permanent programs around the Tijucas manufacturing unit and support initiatives in these areas CRESCER PROGRAM The Crescer Program is a transforma- tional project in Tijucas that for more than 15 years has offered sporting and educational activities. Every year the program benefits around 200 chil- dren and teenagers aged 6 to 13, of which 30% are children of Portobello employees and 70% are from the lo- cal community. Of all participants, 90% are students at local public schools. The goal of the program is not only to encourage physical activity and de- velop motor skills, it is meant also to foster qualities that come from doing sports, such as responsibility, coope- ration and respect. The way this happens is by tea- ching social and educational sub- jects such as health, education, entrepreneurship and sustainability. The program also serves to prepare teenagers for the professional world, guiding them into Portobello's Young Trainee program. - Crescer is held in partnership with ADEC Sports Association of Cera- mics Companies in Tijucas and wi- th SESI Industrial Social Work. All participants get free fares, food, uni- forms and school supplies including the program schedule. Crescer did not take place in 2020 to prevent the spread of Covid-19. obello Activities of the Crescer Program in 2019 Portobello ESI P Sustainability Report 2020 64#65Pillars of Sustainability social programs ANJOS DE LUZ CHOIR Created in 2004, Anjos de Luz Choir is a project carried out in the commu- nity of Tijucas and has included more than 300 children and teenagers aged 6 to 13. It is an initiative that brings the beauty and transforming power of music to different generations. The re- lationships cultivated since childhood are extremely valuable to Portobello, especially because many of those chil- dren are the sons and daughters of our company's employees. Currently, the choir has 35 members who perform at public events, festivals, gatherings and shows, also alongside other musical acts. The choir did not gather in 2020 to prevent the spread of Covid-19. VOLUNTEER PROGRAM The Volunteer Program serves as the basis to maintain and get people incre- asingly involved in the numerous social programs of Portobello is the Volunte- er Program. Participating in it currently are over 200 employees. The program, which has encouraged involvement in social actions since 2017, is intended to contribute to improving quality of life of the community at large. To this end, the initiative is currently or- ganized into four different areas which volunteers are free to chose from based on their availability and interests: Volunteer actions, in which employe- es can help with the organization of the company's events, such as the Workers' Day Party, the Children's Party, and of events held by the municipal ad- ministration of Tijucas. Charitable campaigns, focused on collecting donations for the Volunteer Christmas Celebration, Clothing Dona- tion Campaign, visiting hospitals, nur- sing homes, daycare centers and scho- ols. Charitable donations, in which volun- teers provide assistance to employees experiencing hardship due to a disease or natural disaster. Actions in favor of life, which focuses on the health and well-being of people and calls for actions such as donating blood, platelets, helping in events rela- ted to health in general such as breast cancer and prostate cancer awareness months. In 2020, five groups of employees do- nated blood at the HEMOSC Hematolo- gy Center in Florianópolis. ANO ANIS Anjos de Luz Choir performing in 2018 Portobello Sustainability Report 2020 65 55#66Pillars of Sustainability 38.000 m² of ceramic tiles donated to social organizations, including hospitals for treating Covid-19 Portobello social programs VOLUNTEER CHRISTMAS CELEBRATION The largest social program organized by Portobello has existed since 2003. Participating in it are the company's employees, who sponsor poor children and elderly from Tijucas and Marechal Deodoro and give them Christmas presents. In 2020, the Portobello Volunteer Christ- mas Celebration handed out 256 pres- ents to children in Santa Catarina chari- ty homes and 280 Christmas baskets to the poorest families in Tijucas, with the support of the local Social Work Office. At Pointer, employees have sponsored 250 children from Vergel Community in partnership with NGO Mandaver. At our Portobello Shop chain, we took part in Christmas actions in numerous cities around Brazil, such as a Lunch Event sponsored by Portobello Shop Campinas, in the state of São Paulo, and a Christmas event at Lar Espe- rança with the support of Portobello Shop Nilo Peçanha, in Porto Alegre, Rio Grande do Sul. Moreover, Portobello do- nated funds which would be used for buying giveaways to APAE in Tijucas to support a project for improving facilities and resuming classes in 2021. WORKERS' DAY PARTY This traditional event is held with the support of Portobello Volunteers and each edition has 2,500 participants on average, between employees and their relatives. In 2020, the party was re- placed with a virtual event that encour- aged people to "stay home". CHILDREN'S PARTY This event is held with the support of the Volunteer Program, in which employees, participants of social programs and their families, offer games, play and cul- tural performances. In 2020, to prevent the spread of Covid-19, the Children's Party took place virtually with guest an- imators and mascot Bello. It featured music, play and prizes to brighten up the day of the children from the families of Portobello and Pointer employees. INCENTIVE LAW PROJECTS The company allocated BRL 400,000 in funds to projects in nearby com- munities through the Culture Incentive Law, Sports Incentive Law, National Program of Support to Cancer Oncolo- gy = Pronon, National Support Program for Patients with Disabilities Pronas, Children and Adolescent Fund and El- derly Fund. SPORTS FUNDING - ADEC Sports Association of Ceram- ics Companies in Tijucas is a partner of Portobello's that promotes several programs and activities with the pur- pose of bringing businesses and the community together. As a result, more than 4,000 members along with their dependents can enjoy a vast conservation area and full sports and recreation infrastructure. BELLO OLYMPICS Held in partnership with the ADEC, the Sports Association of Ceram- ics Companies in Tijucas, the Bello Olympics encourages employees to take part in 14 sports events, pro- moting well-being and moments of relaxation and fun for co-workers and their families. This event did not take place in 2020 to prevent the spread of Covid-19. ENVIRONMENTAL EDUCATION A program geared towards employ- ees and residents living near the Portobello manufacturing facility in Tijucas. It imparts best environmental practices on internal and local social media and runs awareness cam- paigns and monthly training activities for employees. Sustainability Report 2020 66#67Pillars of Sustainability people and management Meritocracy Meritocracy is part of our organizational development and is one of the strategies of the People and Management area We believe professionals who focus on results, are innovative and act out of a sense of ownership are fundamental for us to achieve our brand's objectives. We pick, recognize and value profes- sionals who show outstanding perfor- mance using a meritocracy system. We believe that aligning objectives and goals, structured planning and mana- gement tools will lead to excellence and efficiency. Professionals who deliver the bestre- sults, working with integrity, ethics, res- pect and in teams, deserve individual recognition. Employees are always the agents of their own careers and should seek out continuous development and improvement, with the involvement of their leaders and the support of the company. We value a friendly workplace environ- ment, with a relaxed and pleasant at- mosphere. Daily, monthly and annual results are tracked and must fall in line with the company's sustainability. Portobello Sustainability Report 2020 20 67#68Pillars of Sustainability Qualified people, effective processes and results- oriented management are guidelines set out so that each employee has a global view of the company, generating agility in decision making people and management ORGANIZATIONAL COMPETENCIES • Focus on results • Sense of ownership • Innovation LEADERSHIP COMPETENCIES •Development of talents Search for competitiveness • Focus on customers Agility in management • Valuing different opinions Organizational and leadership competencies guide a professional's profile and training content. #ÉPORT BELL Portobello Sustainability Report 2020 68#69Pillars of Sustainability 2018 Employees receiving performance review (%) Training sessions per employee (hours) Portobello people and management 2019 2020 905 10 We offer training tools so that our employees can develop professionally MENTORING Professionals with potential for promo- tion take part in annual cycles of mento- ring with co-workers who are one or two hierarchical levels above. The program did not take place in 2020 to prevent the spread of Covid-19, but it is set to resume in 2021. LEADER OF THE FUTURE An immersion program of leadership de- velopment for managers. 105 profession- als have already taken it. DEVELOPMENT IN ACTION A program created in 2020 geared to- 11,07 9,87 7,93 No on-site training took place in 2020 to prevent the spread of Covid-19. Hence the reduction in training hours. wards the development of consultants and executives from the resale channel and of leaders serving in marketing and exporting. Our distance courses and on- line meetings provide learning moments for professionals to hone even further their ability to pull in customers, exceed expec- tations and foresee scenarios. Each audience follows a specific develop- ment path involving training in customer service, customer experience, negotiation and sales, communication and leadership. LEADER TRAINING In 2020, due to the pandemic, Portobello Shop leaders met up virtually to talk about essential topics with a view to inspiring and providing practical resources so that participants can take it upon themselves to pursue new paths and possibilities, with confidence and optimism. PORTOBELLO SLABS WORKSHOP Focusing on the major new release of 2020, the Slabs, specifiers who work in partnership with Portobello Shop received more than 130 hours of training. DISTANCE LEARNING WEBSITE - EAD PORTAL Focused on the Commercial Person- nel, over 2,000 professionals from Resale, Engineering and Portobello Shop staff receive training in tech- nical topics related to products and service. PERFORMANCE EVALUATION Portobello carries out a 360-degree per- formance evaluation of its leaders and uses the results to identify development opportunities and find the best talents. An online platform guides the evalua- tions through 43 behaviors expected of Portobello professionals and, at the end of the process, the results are discussed in a committee. Sustainability Report 2020 69#70Our business 120 260 Positive financial indicators, customer satisfaction and commitment from all stakeholders ensure the sustainability of our business Portobello Portobello Shop Brasília, opened in 2020 UN UMITED ETD#71Pillars of Sustainability our business At Portobello, we believe that growth is only possible if achieved together. Opportunities exist for all, and we share risks, results and ethical values We believe that assessments using ESG factors. encourage sustainable investments, increase confidence in the capital market and generate more value for the community. We are committed to the transparency and the continuous improvement in the generation and dissemination of information relevant to environmental, social, and economic sustainability. We invite you all to access our information, through this Report or the Investor Relations channels. Guidelines that steer the company's actions: Commit to excellence in results; • Grow together; Create conditions to generate value for everyone; • Adopt best management and governance practices, prioritizing meritocracy; • Invest continuously in sustainability. LA Portobello Through the pillar called "Our Business", Portobello contributes to the following UN Sustainable Goals 11 12 TRAAL DECENTE CRESMENTS DOONOMICO M 8 Decent Work and Economic Growth ASTRA VACA 9 Industry, Innovation and Infrastructure PRODICO RESPONGE VERG PAR MPLEMENTACAO 11 Sustainable Cities and Communities 12 Responsible Consumption and Production 17 Partnerships for the Goals Sustainability Report 2020 71#72Pillars of Sustainability Economic Results 2020 was a year of great achievements for Portobello Group. Despite the chal- lenges and negative effects of the Co- vid-19 pandemic, we achieved record sales results, once again strengthening our resilience in the market. The result is its consolidation as one of the leading companies in the ceramic tile sector, whose portfolio features products with high added value. Another competitive advantage of the group is the diversified distribution channels and export revenue - higher than that of its main competitors in the country. In a scenario of uncertainties and serious global crisis due to the pandemic - with unprecedented impacts on the economy and society Portobello took a stand: we protected our employees and solidly continued our business, seizing on the moment of changing habits of consump- tion, reaching the best sales figures in the last five years. 2018 2019 2020 Gross Revenue (BRL Thousands) Net Revenue (BRL Thousands) Gross Income (BRL Thousands) 1.321.346 1.415.598 1.043.378 1.114.269 394.788 362.619 1.720.988 1.331.780 460.442 Gross Margin (%) 37,8 32,5 34,6 2018 2019 2020 EBIT Portobello 244.404 75.071 175.300 Net Income (BRL Thousands) Net Debt (BRL Thousands) Taxes (BRL Thousands) Distributed Dividends (BRL Thousands) 2018 2019 2020 134.311 13.164 128.242 472.188 427.141 336.575 284.607 31.892 6.236 401.400 293.452 60.896 The financial information presented in this document derives from PBG S.A.'s consolidated financial statements, prepared in accordance with the standards of the Brazilian Accounting Pronouncements Committee (CPC) and the International Financial Reporting Standards (IFRS). Sustainability Report 2020 72 22#73Pillars of Sustainability Portobello Value Added Value added is the demonstration of the wealth shared among employees, community, government, shareholders and creditors (economic agents who contributed to its generation). In 2020, it totaled BRL 865 million. Destination of value added Investments Most of the investments were used to implement the new Slab production line at Tijucas manufacturing facility. This project is an important step in Portobello's evolution and is part of the strategy that aims to offer full solutions to customers through Slabs - large pieces of porcelain tiles. 1% Municipal taxes 35% Compensation of employees 21% State taxes 16% Compensation of third parties 12%* Federal taxes 15% Profit Investments in millions of BRL 120 In 2020, investments totaled R$ 120.4 million 81 63 2018 2019 2020 Investments were ↑27% higher than 2019 Sustainability Report 2020 73#74Pillars of Sustainability Portobello Customer satisfaction Portobello conducts a survey every six months with architecture and design professionals, specifiers of the brand, to measure their degree of satisfaction with the company's processes, products and services. The most recent of the- se surveys was carried out in February 2021, with 305 specifiers. Portobello maintained in 2020 its RA1000 certification, from consumer protec- tion website Reclame Aqui, received three years in a row. This recognition, updated daily with consumer scores on the website, is intended for companies that show their customers that they are committed to providing quality after- -sales services, raising the degree of trust in their brand and products. Specifier satisfaction 86% Satisfied 11% Not satisfied ·3% Indifferent End consumer satisfaction 88% Satisfied .8,5% Not satisfied -3,5% Indifferent Comments of specifiers who work in partnership with Portobello Shop, from an anonymous survey ❝6 Excellent staff. ❝ Incredibly thoughtful and accommodating, always intent on helping us the best way possible. The service is always very good. Consultants are always nice and well-informed about the products. 66 You are amazing. Kudos to the team and for your top-class products. A quality product, a quality delivery and a quality service are the reasons why I choose Portobello products. Sustainability Report 2020 74#75Pillars of Sustainability Accolades and Awards Portobello Name of the Award Category Institution Version 2020 Anamaco Award Major Customers Anamaco Nov/2020 2020 Citizen Company Award Top of Mind Environmental Conservation Court of Justice of Santa Catarina Nov/2020 Home and Market Ceramic/ Porcelain Nov/2020 Covering Brand and Ceramic Tiles Brand Reclame AQUI Manufacturers - Tiles, Dec/2020 Flooring and Ceramics Mar/2020 Pequenas Empresas & Grandes Negócios Nov/2020 Portobello Shop Reclame AQUI 2020 Seal of Excellence in Franchising 5-star Seal from the Best Franchises in Brazil Guide Top Marketing and Sales Master Home, decoration and presents Communication, with case Virtual Release Event Unlimited Exhibit; Retail, with case Portobello Slabs Release at Portobello Shop Stores; and Top One, with the highest score among winners with case Virtual Release Event Unlimited Exhibit ABF ADVB/SC Dec/2020 Portobello Sustainability Report 2020 75 35#76Pillars of Sustainability Portobello Sustainability Framework PREMISES Portobello TRANSPARENCY Sustainability viewed as a continuous learning process which includes getting things wrong and getting things right OUR PRODUCT We understand that our home extends beyond four walls. We have rendered our unwavering dedication to improving our production processes tangible with the purpose of being able to take care and helping restore the planet we live on. PROJECTS • 100% closed-loop water systems in the manufacturing process • 100% natural gas used in furnaces and dryers in Tijucas 99.9% of waste reused or recycled • 1800m³ of water from human consumption saved with the "Let's Take Care of Water Too" Campaign SUSTAINABLE DEVELOPMENT GOALS CONSUME PRODUCA RESPONSAVERS ACAO CONTRA SANCAGO CM LAPOTÁVEL 6 SANCAMENTO COLLABORATION Include different actors to build together and maximize positive impacts OUR PEOPLE EDUCATION Sharing information with different stakeholders to influence people towards conscious consuming The actions and projects we create or support with a view to strengthening the people and communities we are involved with. It represents our continuous effort to value human beings, believing in their ability to evolve and change the world for the better. PROJECTS • Colorful Quarter Campaign •Vaccination Campaign Anjos de Luz Choir • Crescer Program •Volunteer Program • Incentive Laws Young Trainee Program • Occupational Health & Safety Programs (SIPAT - Occupational Accident Prevention Week) SUSTAINABLE DEVELOPMENT GOALS 3 EDUCAÇÃO DE 4 QUADE 10 10 € CHAINSE BAL JUSTICAL 16 S CARTS OUR BUSINESS COMMUNICATION Sustainability as a transversal topic in all points of contact The success of our business is not measured just by financial aspects, but also by the well-being of the people and the environment that our products and services create. We have reaffirmed our commitment to adopting sustainable measures as an integral part of our business strategy. PROJECTS . Compliance: Periodic evaluations • Satisfaction survey with at least 87% satisfied respondents • Maintenance of RA1000 certification awarded by consumer protection website Reclame Aqui in 2018, 2019 and 2020 • Win Época Reclame Aqui Award in the Home & Construction category • Training and Corporate Education Programs SUSTAINABLE DEVELOPMENT GOALS TRABALHO DECENTS BLOOMENTO VIC 12 C 17 P DE IMPLEMENTACAO HÁVES Sustainability Report 2020 76#77The Portobello of the Future Portobello Sustainability Report 2020#78The Portobello of the Future Our ambitions and our actions will turn Portobello into a company that is 95 14:35 Larc *0*7.31% Portobello Linhas Confira nossas linhas Timeless Increasingly more sustainable •Alternative energy initiatives for all businesses and stores •Employee, professional and customer awareness about the use and disposal of tile waste • Conscious use of water in all businesses and stores Increasingly more plural and accessible • Recruitment and selection policies that aim for diversity Physical accessibility and access to information in all businesses and stores Digital accessibility Increasingly more digital and connected Louças e Metais Novidade Metais • A phygital experience that can meet the demands of inspiration, specification and purchase of the complete Portobello solutions • A brand that is open to dialogue through all digital channels Empathy and availability to satisfy - and surprise the desires of our customers Uniq#79spending Freusing -consuming +technology -waste Frecycling An environmentally restored deposit in Canoinhas Portobello Sustainability Report 2020 79#80The Portobello of the Future Portobello ❝ At Portobello, the way we act and interact with the market and the environment must become increasingly more sustainable. Mauro do Valle, CEO at Portobello Group ❝It's a pleasure being able to work alongside a manufacturer that allows us to express ourselves creatively and freely. Oskar Metsavaht, designer and artist 66A esthetics must go hand in hand with ethics. Nina Almeida, CEO of Instituto-E ❝❝ We must create things that make a difference in the world. Chris Ferreira, director of innovation and branding at Portobello Portobello engages in sustainability; it looks at its structures. Marcelo Rosenbaum, designer ❝❝ We build the future we believe in: sustainable and collaborative. Pedro Andrade, journalist Sustainability Report 2020 80#81The Portobello of the Future Slabs on display at Portobello Shop Florianópolis Portobello Creating the future we want, together