2. Important Disclaimer
Statements regarding the Company’s future business prospects and operating income projections are mere estimates
and projections and, as such, are subject to several risks and uncertainties, including, but not limited to, market
conditions, domestic and international economic performance in general and in the Company’s operating sector. Such
risks and uncertainties cannot be controlled or sufficiently forecast by the Company’s management and may significantly
affect its perspectives, estimates and projections. Statements regarding future perspectives, projections and estimates do
not represent and may not be construed as a performance guarantee. Operating information contained herein, as well as
information not directly derived from financial statements, has not been subject to audit or special review by the
Company's independent auditors, may involve assumptions and estimates adopted by the management and be subject to
changes.
2
3. 2Q12 Highlights
Net
Net Revenue increased by 31.0% in 2Q12, reaching R$199.5 million
Revenue
Gross Profit Gross Profit reached R$ 89.9 million, 36.9 % growth and 45.1% margin
EBITDA EBITDA totaled R$ 34.6 million, increase of 22.4% and 17.4% margin
Net Profit R$25.8 million net profit, with 12.9% margin and growth of 7.2%
Opening of 13 stores in Brazil: 4 owned stores – 1 Arezzo and 3 Schutz; 9 franchises: 5 Arezzo and
Expansion
4 Schutz. Expansion of 4 existing stores: 2 owned and 2 franchises, adding 212 sq m.
3
4. Company Growth
Gross Revenues – (R$ million)
The Company’s Gross Revenues amounted to R$258.7 million in the second quarter of 2012,
a 33.4% growth when comparing with 2Q11
4
5. Gross Revenue Breakdown by Channel –
Domestic Market
Gross Revenue by channel – Domestic Market (R$ million)
29.2%
450.3
6.5
348.6
35.3% 78.4% 104.7
249.0 2.8
58.7 20.4%
184.0 3.0 129.8
89.3%
107.8 16.7%
60.2
1.0
31.8 22.6%
74.0
60.4 209.3
23.1% 179.4
90.8 111.8
2Q11 2Q12 1H11 1H12
Franchise Multi-brand Owned Stores Others¹
SSS Sell-out (owned stores) 19.2% 11.2% 15.6% 11.6%
SSS Sell-in (franchises) 24.2% 14.5% 19.1% 10.4%
Strong growth, especially for Owned Stores that increased by 89.3% in 2Q12. The good SSS
of Owned Stores and Franchises is driven by good product mix results and solid winter
collection sell-through.
¹ Other: Growth of 211.1% in 2Q12 and of 136.9% in 1H12.
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6. Gross Revenue Breakdown by Brand –
Domestic Market
Gross Revenues by brand – Domestic Market (R$ million)
29.2% 450.3
348.6 19.8
35.3%
249.0 11.8 145.0
50.2%
96.5
184.0
11.8
62.7% 18.8%
7.7 81.9
50.4 285.6
23.4% 240.3
125.9 155.3
2Q11 2Q12 1H11 1H12
Arezzo Schutz Others¹
Strong growth of 35.3% in 2Q12, specially for the Schutz brand, whose gross revenue growth
stood by 62.7% in 2Q12 and by 50.2% in 1H12.
¹ Other: Alexandre Birman’s and Anacapri’’s Gross Revenue: growth of 52.0% in 2Q12 and of 67.1% in 1H12.
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7. Distribution Channel Expansion
Owned Stores and Franchises Expansion
26.0%
13.6% 22.6 Franchises 295
.
18.8% Owned Stores¹ 19
. Multi Brands² 878
18.0
15.8 351
13.3 +51 Franchises 6
300
273 +27 50 Owned Stores¹ 22
238 +35 31
25 Multi Brands² 1,551
15
269 301 Owned Stores 1
223 248
Multi Brands² 16
2Q09 2Q10 2Q11 2Q12 Owned Stores 8
Multi Brands² 767
Franchises Owned Stores Total m²
The Company ended 2Q12 with 351 stores and sales area expansion of 26.0% comparing
with the same period of the previous year
Note: area given in thousand of square meter (sq m)
¹ Includes 5 outlets with total area of 1,334 sq m
² Domestic Market 7
8. Gross Profit and EBITDA
Gross Profit (R$ million) EBITDA (R$ million)
45.1% 43.5% 18.6%
43.2% 42.0% 17.4% 16.9%
28.6% 13.7%
157.1
36.9%
122.2 0.6%
22.4%
89.9
49.0 49.3
65.7 34.6
28.3
2Q11 2Q12 1H11 1H12 2Q11 2Q12 1H11 1H12
Gross Profit Gross Margin EBITDA EBITDA Margin
Gross margin expansion of 1.9 p.p., due to the increased presence of Owned Stores in the
channel mix. Excluding the 1Q12 non-recurring effect EBITDA would be R$ 57.3 with 15.9%
margin
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9. Net Income
Net Income (R$ million)
15.8%
12.9% 13.3%
10.1%
7.2% -5.6
38.8 36.6
24.0 25.8
2Q11 2Q12 1H11 1H12
Net Income Net Margin
Company´s Net Income totaled R$ 25.8 million, with 12.9% margin in 2Q12. Excluding non-
recurring impact in 1Q12, Net Income would have reached R$ 41.9 million with 8.1% growth
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10. Cash Generation
Operating Cash Generation (R$ thousand)
Growth or Growth or
Cash flows from operating activies 2Q11 2Q12 1H11 1H12
spread spread
Income before income taxes 30,345 33,695 3,350 51,666 49,331 (2,335)
Depreciation and amortization 961 1,749 788 1,840 3,166 1,326
Others (4,395) (1,518) 2,877 (6,263) (5,647) 616
Decrease (increase) in current assets / liabilities 22,815 16,544 (6,271) 10,747 26,519 15,772
-
Trade accounts reveivable 42,262 22,801 (19,461) 23,896 28,795 4,899
Inventories (3,114) (108) 3,006 (18,837) (8,687) 10,150
Suppliers (13,629) (12,798) 831 8,528 6,042 (2,486)
Change in other current assets and liabilities (2,704) 6,649 9,353 (2,840) 369 3,209
Change in other non current assets and liabilities (908) (928) (21) (1,171) (1,628) (457)
Tax and contributions (5,974) (11,652) (5,678) (8,340) (11,652) (3,312)
Net cash generated by operating activities 42,844 37,890 (4,955) 48,479 60,089 11,610
Net cash generated from operating activities totaled R$ 37.9 million, with a slightly stretch on
the balance of accounts payable due to the greater importance of owned store channel in the
sales mix.
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11. Capital Expenditure (CAPEX) and
Indebtedness
CAPEX (R$ million) Indebtedness (R$ million)
31.8
0.5 Indebtedness 2Q11 1Q12 2Q12
334.7%
10.3 Cash 199,339 166,741 205,819
-
Total indebtedness 32,276 30,844 51,117
14.5 Short term 12,547 14,059 25,548
304.2%
0.3
As % of total debt 38.9% 45.6% 50.0%
7.3 Long term 19,729 16,785 25,569
6.8 21.0
3.6 As % of total debt 61.1% 54.4% 50.0%
0.5 -
2.5
0.2 7.4 Net debt (167,063) (135,897) (154,702)
1.2 4.3 -
2.1
EBITDA LTM 104,201 111,662 118,007
2Q11 2Q12 1H11 1H12
Net debt /EBITDA LTM -1.6x -1.2x -1.3x
Stores Corporate Others¹
Arezzo&Co invested R$ 14.5 million in 2Q12, of which R$ 7.4 million in stores, including 4
openings and 2 stores expansions, and 6 other refurbishments not yet inaugurated. Corporate
investments are mainly related to the new Company’s head office, in Campo Bom - RS
¹ Other: Increase of 17.2% in 2Q12 and of 6.0% in1H12 compared with the same period of the previous year.
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12. Contacts
CFO and IR Officer
Thiago Borges
IR Manager
Daniel Maia
Phone: +55 11 2132-4300
ri@arezzoco.com.br
www.arezzoco.com.br
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