EBITDA + 23,5% vs Adjusted EBITDA of R$133.2 million Operational cash flow: R$ 138,6mn in 2013

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1 EBITDA + 23,5% vs Adjusted EBITDA of R$133.2 million Operational cash flow: R$ 138,6mn in 2013 São Paulo, Brazil, February 24, 2014 Brazilian premium fashion retail leader Restoque Comércio e Confecções de Roupas S.A. ( the Company ) (LLIS3), reports results for the fourth quarter of 2013 (4Q13) and 2013 in compliance with international financial reporting standards (IFRS). Comparisons are with fourth quarter 2012 (), or with 2012, or as indicated. In Portuguese Conference call on these results Date: February 25, 2014 (Tuesday) Time: 11 a. m. Brasília time / 9 a.m. New York Connect: +55 (11) Password: Restoque Replay: +55 (11) (password: ) In English Date: February 25, 2014 (Tuesday) Time: 12 noon Brasília time / 10 a.m. NY Connect: +1 (412) Password: Restoque Replay: +1 (412) (password: ) Highlights Full-year net revenue up 12.2% from 2012 to Ebitda up 23.5% YoY in 2013 Ebitda margin up 154bp. Continuing good results from the plan to rationalize SG&A reduced by 6.7 percentage points from Inventories reduced by 100 days, from end-2012 to end Operational cash flow R$ 91.5mn in 4Q13 and R$ 138.6mn in the year. In thousand of R$ 4Q13 Change % 4Q13/ Change% 2013/ 2012 Net operating revenue 182, , % 635, , % Le Lis Blanc 125, , % 465, , % Bo.Bô 21,615 19, % 91,050 84, % John John 21,701 37, % 49, , % Noir 7,300 5, % 15,051 22, % Others 6,286 13, % 15,593 33, % Gross Profit 132, , % 439, , % Gross Margin 72.5% 67.6% -4.9p.p. 69.1% 65.2% -3.9p.p. EBITDA 36,380 35, % 98, , % EBITDA Margin 20.0% 18.5% -1.4p.p. 15.4% 17.0% 1.5p.p. Net Income 7,261 (4,047) % 11,645 (18,408) % % of Net Revenue 4.0% -2.1% -6.1p.p. 1.8% -2.6% -4.4p.p. Provisions - 6, % - 6, % Extraordinary Expenses 5,681 1, % 24,235 6, % CEO: Alexandre Afrange COO: Livinston Bauermeister IRO: Glaucia Pacola Investor Relations Tel.: +55 (11) ri@restoque.com.br Adjusted EBITDA 42,061 42, % 122, , % EBITDA Margin 23.1% 22.3% -0.8p.p. 19.2% 18.7% -0.6p.p. Adjusted Net income by the amortization of the goodwill tax credits and exchange rate 12,057 1, % 44,725 1, % variation % of Net Revenue 6.6% 0.6% -6.0p.p. 7.0% 0.2% -6.8p.p. 1 2 Others includes sales through the discount channels (outlets, private online sales clubs, multi-brand stores, and Bazaars). Net revenue for each brand includes company stores, wholesale and online sales. Net profit adjusted for amortization of goodwill and exchange rate variation. 1

2 Highlights of the period Sales grew by 4.0% over and 12.2% over Consolidated SSS, although it continues to be negative YoY (at 10.4% in 2013, and 8.1% in 4Q13), is on an improving trend when compared to the immediately prior quarters. Graph 1: SSS Restoque Graph 2: SSS per Brand 2T13 3T13 4T13 22,4% 6,3% -13,9% -8,1% -16,3% -18,3% -10,3% -12,7% -12,3% -25,8% -32,9% -19,0% 2T13 3T13 4T13 Restoque Le Lis Blanc Bo.Bô John John Year-on-year SSS comparisons for the Le Lis and Bo.Bô brands continue to be negatively influenced by low availability of products, and lower average price. Graph 3: Current Collection Inventory/m² 43,0 30,6 29,2 26,1 25,3 17,8 16,8 4T11 4T12 4T13 Le Lis Blanc Bo.Bô John John 2

3 Gross margin in our full-price distribution channels (company stores, wholesale, and online sales) was 74.0%, higher than the 73.4% gross margin of these same channels in. Graph 4: Quartely Gross Margin by Channel Graph 5: Annual Gross Margin by Channel 66,8% 69,1% 64,7% 66,8% 29,4% 72,6% 73,4% 71,0% 72,7% 74,0% 59,1% 71,6% 72,5% 69,1% 67,2% 67,6% 57,8% 48,3% 36,7% 30,4% 27,7% 71,6% 70,6% 68,8% 69,2% 69,1% 65,2% 29% 20% 18% 7,4% 12,1% 5,9% 1T12 2T12 3T12 4T12 1T13 2T13 3T13 4T13 Canais Full Price Canais de Desconto Restoque Varejo, Atacado, E-Commerce (Marcas) Canais de Desconto Restoque During the 4thQ13, we ve boosted the sales pace of our past collection given more discounts and promotions through the discounted channels. Even though the sales of these products throughout these channels have had positive gross margin (5,9%), taking into consideration the SG&A expenses, it generated negative Ebitda of R$1,2 million. This acceleration was justified by our goal of shutting down our distribution center in Itapevi, allowing the centralization of our operations in our main distribution center during this 1Q14, with a substantial increase in synergies. The average discount of our sales through the discounted channels (outlet and outlet online) was 69% in the outlets and 71% in the on-line outlet for the 4Q13 period (vs. an average discount of 50% in the ). Graph 6: Quartely % of all discounted channels of total revenues Graph 5: Annual % of all discounted channels of total revenues 6,4% 8,0% 5,0% 2,3% 3,4% 1,0% 1,5% 1T13 2T13 3T13 4T Reflecting these factors, our consolidated gross margin in all the channels in 4Q13 was 4.90 percentage points (pp) lower than in. In 2013 our consolidated gross margin was also down, to 65.2%, from 69.1% in 2012 ( 3.92 p.p.). The reduction was mainly caused by the need to accelerate sales of products from past collections due to the high level of inventory remaining at the end of 2012 higher than the Company s historical average. 3

4 We made the first part of our sales of past collections via the retail network s seasonal off-price sales (summer sales) in three weeks of January 2013 (as opposed to two weeks as commonly done by the Company), with a discount as high as 75%. This affected gross margin in the full price channels (retail, wholesale, online), by some 180bp in full-year In 2014, the discount on our January seasonal sales returned to historic levels: we had two weeks of off-price sales with an average discount of 42%. Another important component of our sales of prior collections was through the outlet stores and online outlet sales. These channels provided an aggregate 5% of the Company s net revenue in The average discount adopted was 67% in 2013, vs. 51% in The increase in the sales through our network of outlet stores and online outlets enabled the balance of prior collections to be cut back significantly, reducing our total inventory from 353 days at the end of, to 253 at the end of 4Q13. Over the course of 2014 we expect the inventory of past collections to return to a normalized level, and we will then reduce the discount offered in the outlet and online outlet channels, enabling the gross margin of these channels to return to the level we operated prior to The effect of the reduction in our gross margin in 2013 was partly offset by the improvement in our SG&A expenses (excluding expenses of depreciation and amortization), which were 1.1 percentage points lower in 4Q13 as a percentage of net sales than in. In full-year 2013 they were 6.7 percentage points lower than in full-year 2012 as a percentage of net revenue. 4

5 SG&A Expenses, excluding depreciation and amortization, as % of Net Revenues 57,1% 58,7% 54,1% 51,3% 47,8% 44,0% 44,8% 44,0% 49,6% 46,2% 47,7% 46,8% 48,5% 47,3% 1T11 2T11 3T11 4T11 1T12 2T12 3T12 4T12 1T13 2T13 3T13 4T In spite of the lower consolidated gross margin in 2013 than in 2012, Ebitda margin in the year was 17.0%, an increase of 160bp from EBITDA Margin Evolution (since 2009) Margem EBITDA Margem EBITDA ajustado 14,9% 10,6% 21,1% 23,2% 21,1% 21,3% 19,2% 18,7% 15,4% 17,0% Ebitda in 2013 was R$ 121.0mn, an increase of 23.5% from 2012 (R$ 98.0mn). We generated strong operational cash flow: R$ 138.6mn in 2013; R$ 91,5mn in 4Q13. 5

6 Operational summary This table shows our main operational indicators: Restoque 4Q13 Change % 4Q13/ Change% 2013/ 2012 Total number of company stores % % Total sales area of company stores (m²) 48,178 52, % 48,178 52, % Average sales area of company stores (m²) 46,506 51, % 36,215 50, % Sales per Square Meters (R$/m²) 3,517 3, % 15,361 12, % Average ticket % % SSS -5.3% -8.1% NA -0.8% -10.4% 12.1p.p. Le Lis Blanc and Noir, Le Lis Total number of company stores % % Total sales area of company stores (m²) 34,567 36, % 34,567 36, % Average sales area of company stores (m²) 33,857 36, % 28,632 35, % Sales per Square Meters (R$/m²) 3,593 2, % 15,141 12, % Average ticket % % SSS -6.9% -12.3% NA -2.8% -10.3% NA Bo.Bô Total number of company stores % % Total sales area of company stores (m²) 3,492 3, % 3,492 3, % Average sales area of company stores (m²) 3,452 3, % 3,028 3, % Sales per Square Meters (R$/m²) 5,773 5, % 26,180 20, % Average ticket 1,124 1, % 1,140 1, % SSS 7.1% -10.3% NA 18.8% -18.7% NA John John Total number of company stores % % Total sales area of company stores (m²) 8,585 10, % 8,585 10, % Average sales area of company stores (m²) 7,781 10, % 3,657 9, % Sales per Square Meters (R$/m²) 2,466 3, % 10,236 10, % Average ticket % % SSS 22.4% NA 9.4% NA Noir, Le Lis - Lojas Stand Alone Total number of company stores % % Total sales area of company stores (m²) 1,534 1, % 1,534 1, % Average sales area of company stores (m²) 1,417 1, % 898 1, % Sales per Square Meters (R$/m²) 1,973 1, % 7,858 5, % Average ticket % % SSS -19.6% NA 0.0p.p % NA Starting in 3Q13, we began presenting the operational information of Le Lis Banc to include the Noir, Le Lis brand. Of the 106 Le Lis Blanc stores in 4Q13, 26 have corners with the Noir brand and 12 are twinned in this model the connected sales area of Noir, Le Lis has its own entry and its own area in the shop window. Of the total sales area of the Le Lis Blanc stores (36,995m 2 ), a total of 34,279m 2 is in Le Lis Blanc brand stores and 2,716m 2 is in twinned Noir, Le Lis stores and corners of the Noir, Le Lis brand in Le Lis Blanc stores. In 4Q13 the five independent Noir, Le Lis stores (Iguatemi SP, Design Barra, Recife, Oscar Freire, Bela Cintra); and in, eight independent Noir, Le Lis stores (Brasília Shopping, Campo Grande, Recife Shopping, Porto Alegre Barra Shopping, Rio Design Barra, Bela Cintra, Oscar Freire and Iguatemi). 6

7 4Q13 results In 4Q13 we inaugurated 4 company stores under the Le Lis Blanc brand, 5 company stores under the John John brand and 8 corners of the Noir, Le Lis brand in Le Lis Blanc stores. We continued the process of optimization of selling area, begun in 1Q13 We closed down one stand-alone Noir, Le Lis store and three twinned Noir, Le Lis stores. We converted one Noir, Le Lis store into a John John store. 3Q13 4Q13 VQr % 4T13/ 4T12 VQr % 4T13/ 3T13 Sales area of Le Lis Blanc and Noir, Le Lis company stores (m²) % 3.9% Number of Noir, Le Lis - Stand Alone Stores % -16.7% Number of Bo.Bô company stores Number of John John company stores % 10.6% Total number of company stores % 4.0% Sales area of Le Lis Blanc and Noir, Le Lis company stores (m²) 34,567 36,158 36, % 2.3% Sales area of Noir, Le Lis company stores (m²) 1,534 1,211 1, % -9.3% Sales area of Bo.Bô company stores (m²) 3,492 3,524 3, % -0.3% Sales area of John John company stores (m²) 8,585 10,125 10, % 2.9% Total sales area of company stores (m²) 48,178 51,018 52, % 2.0% At the end of 4Q13 our selling area per company store was 251m 2. The average area of stores under the Le Lis Blanc and Noir, Le Lis brands was 349m 2 ; the average area of Bo.Bô stores was 80m 2 ; the average area of John John stores was 200m 2, and the average area of independent Noir, Le Lis company stores was 220m 2. 7

8 Gross revenue Our 4Q13 gross revenue was R$ 290.0mn, 5.4% more than in (R$ 275.2mn). The year-on-year increase in the quarter mainly reflects the increase of sales through multi-brand stores and other channels (online and outlets), which were respectively 11.1% and 116.3% higher YoY in the quarter. In the full year our gross revenue was R$ 1,060.1mn, which compares to R$ 939.7mn in the previous year growth of 12.8% from 2012 to Gross Revenues (in R$mn) Company stores In 4Q13, gross revenue from company stores was in line with that of. Same-store gross sales 1 were 8,1% lower YoY in 4Q13, mainly due to the lower quantity and availability of products in the stores as well as lower average price. Our gross revenue in the year was up 9.6%, at R$ 905.8mn, from R$ 826.5mn in 2012 Change Change% 4Q13 % 4Q13/ / In thousand of R$ 2012 Gross sales from company stores (R$'000) 248, , % 826, , % Year-on-year growth in same-store gross sales (%) -5.3% -8.1% -2.8p.p. -0.8% -10.4% -9.6p.p. 1 Stores compared are company stores that have been in operation for twelve months or more. The comparison considers gross sales of company stores that were in operation during both the periods being compared. If a store is included in the calculation of same-store sales for only part of one of two compared periods, then it is included in the calculation of only the corresponding portion of the other period. When operation of a store is discontinued, sales of that store are excluded from calculation of same-store sales for both periods. When sales area of a company store is increased by more than 15%, its sales are not considered in the calculation until after twelve month have elapsed from conclusion of that expansion. 8

9 Multi-brand stores 4Q13 gross revenue from sales to multi-brand stores was up 11.1% YoY, at R$ 17.3mn compared to R$ 15.6mn in. In the full year, gross revenue through this channel was R$ 88.2mn, up 7.9% from R$ 81.8mn in Other channels Our other revenues in 4Q13 comprises sales through other channels (outlets, private on-line sales clubs and Bazaars), and web sales: the increase in our network of outlets to eight stores, resulting in the sales through the discount channel being 116.3% higher than in ; and growth in the online sales operation this includes both the full-price and the online outlet operation begun in May 2013 of 176.2% from, reaching 2,3% of the company s gross sales revenue in 4Q13. Net revenue Net sales revenue in 4Q13 was R$ 189.6mn, 4.0% higher year on year (compared to R$ 182.3mn in ). In the full year, our net revenue, at R$ 713.7mn, was 12.2% higher than in 2012 (R$ 635.9mn). Evolução da Receita Líquida (em R$mn) 635,9 +12,2% 713,7 182,3 +4,0% 189,6 4T12 4T Gross profit Our gross profit, at R$ 128.1mn in 4Q13, was lower than in (R$ 132.1mn). Gross margin was 4.9pp lower than in. This reflected the increase in sales through the discount channels (the network of outlet stores, and the online outlets) which reflected opening, in the last 12 months, of three new outlet stores in shopping malls, significantly increasing our capacity to sell past collection items. 9

10 In addition to the start of outlet operations, the strong off-price sales that we made in 1Q13 also affected the gross margin for full-year 2013, which was 3.9pp lower at 65.17% in 2013, compared to 69.09% in Gross Profit Evolution and and Gross Margin (in R$mn e %) SG&A Sales, general and administrative expenses excluding depreciation and amortization were 6.7 percent lower, as a percentage of net sales, in 2013 than This reflects several factors: (i) (ii) The efforts for personnel rationalization in the backup team; and optimization of administrative staff of stores. Scale gains resulting from the growth in revenue of the new brands in relation to their back-office structures. (iii) Marketing expenses returning to a normal trend, after the investments in 2012 in launch of new brands. (iv) Fewer extraordinary expenses, and normalization of our logistics and back-office operations. (v) Renegotiations of rental contracts, in 2Q13 and 3Q13, resulting in lower occupancy cost. In 2013, selling expenses (which include all the Company s expenses on personnel and marketing) were 5.7 percentage points lower, as a percentage of net revenue, at 27.9% (R$ 199.0mn) in 2013, compared to 33.5% (R$ 213.3mn) in SG&A expenses (which mainly include occupancy and building expenses, less expenses on depreciation and amortization) were 1.1pp lower as a percentage of net revenue, at 19.4% (R$ 138.8mn) in 2013, vs. 20.5% (R$ 130.4mn) in

11 Ebitda and Ebitda margin Ebitda in 4Q13 was R$ 121.0mn, compared to R$ 98.0 in Ebitda margin recovered, to 17.0% in 2013, from 15.4% in 2012, reflecting our strict control over SG&A. Adjusted for extraordinary expenses and provisions, our adjusted Ebitda in 2013 was R$ 133.2mn, with margin of 18.7%, compared to R$ 122.3mn in 2012, with margin of 19.2%. 4Q13 Change % 4Q13/ Change% 2013/ 2012 In thousands of R$ Net Income 7,261 (4,047) % 11,645 (18,408) NA (+) Financial expenses, net (ex. exchange rate variation) 11,772 21, % 32,600 75, % (+) Exchange rate variation and hedging expense, net (295) % 16,446 9, % (+) Income and social contribution taxes 2,632 (2,487) % 3,112 (9,335) % (+) Depreciation and amortization 15,010 19, % 34,239 63, % EBITDA 36,380 35, % 98, , % EBITDA margin 20.0% 18.5% -1.4p.p. 15.4% 17.0% 1.5p.p. (+) Extraordinary expenses 5,681 7,146 NA 24,235 12,149 NA Adjusted EBITDA 42,061 42, % 122, , % Adjusted EBITDA margin 23.1% 22.3% -0.8p.p. 19.2% 18.7% -0.6p.p. The impact of extraordinary expenses in 4Q13 totaled R$ 7.146mn, including: provisions of R$ 6.1mn, pre-operational expenses on opening of stores totaling R$ 295,800, expenses on the stock options plan of R$ 276,000; and R$ 474,000 in lawyers fees. Depreciation and amortization; and Financial revenue (expenses) We report net financial expenses of R$ 22.0mn in 4Q13, compared to net financial expenses of R$ 11.8mn in. In 2013, the expenses were R$85,3 million, of which R$15,1 million refers to credit card operator commissions, R$9,5 million refers to derivative losses, R$4,8 million refers to fines and interest relating to the ICMS tax amnesty and R$2,9 million refers to the acquisition of Foose Cool. Our expenses on depreciation and amortization were R$ 19.7mn in 4Q13, compared to R$ 15.0mn in, mainly due to the increase in our base of fixed and intangible assets. 11

12 Net profit (loss) Restoque reports a loss of R$ 18.4mn for 2013, which compares with profit of R$ 11.6mn in There was a negative effect from the high level of depreciation (R$ 63.5mn), and by non-recurring expenses, including fines and interest relating to the ICMS tax amnesty (R$ 4.8mn), extraordinary expenses of R$ 12.1mn, and a non-cash FX variation effect (including a R$ 9.5mn result of the hedge instrument). The table below reconciles Net income, Adjusted net income and Net income adjusted for amortization of goodwill tax credits, non-recurring financial expenses and exchange rate variation: 4Q13 Change % 4Q13/ Change% 2013/ 2012 In thousand of R$ Net Income 7,261 (4,047) % 11,645 (18,408) % (+) Extraordinary expenses 5,681 7, % 24,235 12, % (+) Income tax for extraordinary expenses (1,931) (2,430) 25.8% (8,240) (4,131) -49.9% Adjusted Net income 11, % 27,640 (10,390) % (+) Tax benefit of the amortization of the goodwill tax 1, % 6,231 2, % credits (+) Non recurring financial expenses % - 4, % (+) Exchange variance (295) % 16,446 9, % (+) Income tax for non-recurring espenses and exchange variance Adjusted Net income by the amortization of the goodwill tax credits, non-recurring financial expenses and exchange rate variation % (5,592) (4,855) -13.2% 12,057 1, % 44,725 1, % % of Net sales 6.6% 0.6% -6.0p.p. 7.0% 0.2% -6.8p.p. Depreciation expenses were higher, at R$ 14.5mn, in 4Q13 than in (R$ 9.5mn), reflecting the strong investment made in 2012, of R$ 260.3mn, and in 2003, of R$ 74.4mn. 12

13 Debt At the end of 4Q13 we had net debt of R$ 332.1mn. From the end of 3Q13, our net debt position diminished by R$ 44.0mn, mainly due to the strong operational cash flow generated in 4Q13. In relation to 2012, net debt was R$ 48mn higher, basically due to the purchase of shares in treasury, representing R$ 27.8mn, payment of dividends totaling R$ 10mn, and payment of expenses incurred in the foreign exchange hedge operation, of R$ 9.5mn. In thousand of R$ 3Q13 4Q13 Cash and cash equivalents 254, , ,750 Loans and financings, short-term (74,675) (59,243) (69,879) Loans and financings, long-term (464,182) (563,825) (547,931) Net Debt (284,550) (376,064) (332,060) Capex Our capital expenditure in 2013 totaled R$ 74.7mn, substantially less than in 2012, when we made new capital investment of R$ 260.3mn. This mainly reflects the lower number of store openings planned for 2013, and our effort to rationalize the costs of assembly of new stores. These investments included: R$ 51.4mn in fixed assets associated with: assembly of new company stores; maintenance of existing stores; back-office operations; and outlet stores (net of assets sold); R$ 23.4mn in intangible assets, including: goodwill; development of systems (ERP); brand development; and back-office operations (net of assets sold). About Restoque Restoque is a leading designer and specialty retailer of women s premium fashion apparel and accessories in Brazil. We currently have 4 brands: Le Lis Blanc Deux ; Bo.Bô Bourgeois Bohême ; John John Denim ; and Rosa Chá. Our customers are mainly women and men in the higher income brackets, of a broad age group. We develop a wide product line for a variety of occasions and lifestyles, designing our products and fully outsourcing the production. We create our own apparel and accessory products, and we contract suppliers to produce them. We currently sell our products through company stores, online sales and multi-brand stores. We project our image through all aspects of our business, including our premium products, the shopping experience in our stores, and our superior customer service. Disclaimer Some information included in the report on performance not directly derived from the financial statements, such as, for example: Ebitda, Adjusted Ebitda, Adjusted net profit, Net profit adjusted for amortization of goodwill and exchange rate variation, Net revenue per square meter, and financial information subsequent to December 31, 2013, has not been reviewed by the external auditors. Any forward-looking statements in this material are subject to risks and uncertainties. Such statements are based 13

14 on our Management s beliefs and assumptions and information currently available to the Company. Forwardlooking statements include information about the Company s present intentions, beliefs or expectations. The reservations in relation to forward-looking statements also include information about possible or presumed operational results, and statements that are preceded by, followed by or include the words believes, may, will, continues, expects, forecasts, intends, plans, estimates, or similar expressions. Forward-looking statements are not guarantees of performance. They involve risks, uncertainties and suppositions because they refer to future events, and thus depend on circumstances which may or may not occur. Future results and creation of value for stockholders may differ significantly from those expressed or suggested by forward-looking statements. Many of the factors that will determine these results are beyond the company s capacity to control or predict. 14

15 Balanço Patrimonial - Ativo In thousand of R$ Current assets % of Total 3Q13 % of Total 4Q13 % of Total Change % 4Q13/ Cash and cash equivalents 254, , , Accounts receivable from clients 26, , , (28.1) (35.1) Related parties Inventories 192, , , (9.2) (5.6) Tax credits Recoverable taxes 18, , , (34.2) (25.0) Prepaid expenses 8, , , (55.8) (35.6) Other accounts receivable 5, , , (41.7) Total current assets 504, , , (0.4) 1.3 Change % 4Q13/ 3Q13 Noncurrent assets Long-term assets Judicial deposits 1, , , (4.8) Tax credits 10, , , Prepaid expenses (25.2) Other accounts receivable (100.0) - Recoverable taxes Investment Fixed assets 318, , , Intangible 136, , , (0.5) Total noncurrent assets 468, , , Total Assets 973, , ,

16 Balanço Patrimonial Passivo e Patrimônio Líquido In thousand of R$ Current liabilities % of Total 3Q13 % of Total 4Q13 % of Total Change % 4Q13/ Change % 4Q13/ 3Q13 Loans and financing 69, , , (13.9) 31.6 Debenture 5, , , (26.7) Accounts payable to suppliers 81, , , (4.6) Tax liabilities 27, , , Labor liabilities 34, , , Dividends payable 2, (100.0) - Other accounts payable 35, , , (39.7) (42.8) Capital lease Foose Cool Payable , Other advances 2, , , (42.8) (36.1) Total current liabilities 259, , , Noncurrent liabilities Long-term liabilities Loans and financing 115, , , (57.6) (25.0) Debenture 348, , , Provision for contingencies 4, , , Other accounts payable 19, (100.0) - Capital lease 16, , (100.0) (100.0) Other advances , , Total noncurrent liabilities 505, , , (2.6) Capital stock 132, , , Capital reserve 12, , , (19.5) - Stocks granted - - 3, , Treasury shares (260) (0.0) (21,864) (2.2) (27,964) (2.8) 10, Reserve fund from profit 56, , , (32.6) (9.6) Proposed dividend 7, (100.0) - Total shareholders equity 208, , , (25.0) (5.9) Total Liabilities and Shareholders Equity 973, , ,

17 Demonstração do Resultado In thousand of R$ % of Net Revenue 4Q13 % of Net Revenue Change % 4Q13/ 2011 % of Net Revenue 2012 % of Net Revenue Change % 2012/ 2011 Gross operating revenue 275, , , ,060, Deductions from sales Sales returns (27,996) (15.4) (28,867) (15.2) 3.1 (81,100) (12.8) (85,653) (12.0) 5.6 Sales taxes (64,920) (35.6) (71,550) (37.7) 10.2 (222,654) (35.0) (260,725) (36.5) 17.1 Net operating revenue 182, , , , Cost of products sold (50,202) (27.5) (61,513) (32.4) 22.5 (196,555) (30.9) (248,559) (34.8) 26.5 Gross Income 132, , (3.0) 439, , Operating revenues (expenses) Administrative and general expenses (35,614) (19.5) (37,159) (19.6) 4.3 (130,447) (20.5) (138,761) (19.4) 6.4 Selling expenses (54,750) (30.0) (54,837) (28.9) 0.2 (213,308) (33.5) (198,975) (27.9) (6.7) Financial Results (11,477) (6.3) (21,968) (11.6) 91.4 (49,046) (7.7) (85,309) (12.0) 73.9 Depreciation and amortization expenses (15,010) (8.2) (19,734) (10.4) 31.5 (34,239) (5.4) (63,474) (8.9) 85.4 Other revenues and expenses (5,334) (2.9) (930) (0.5) (82.6) 2, (6,343) (0.9) (360.2) Income before income and social contribution taxes 9, (6,534) (3.4) (166.0) 14, (27,743) (3.9) (288.0) Income tax and social contribution tax (2,632) (1.4) 2, (194.5) (3,112) (0.5) 9, (400.0) Net income 7, (4,047) (2.1) (155.7) 11, (18,408) (2.6) (258.1) EBITDA 36, , (3.3) 98, , Adjusted Net income by the amortization of the goodwill tax credits 8, (3,510) (1.9) (141.3) 17, (16,101) (2.3) (190.1) Adjusted Net Income 11, (93.9) 27, (10,390) (1.5) (137.6) Adjusted EBITDA 42, , , , Adjusted Net income by the amortization of the goodwill tax credits 12, , (90.0) 44, , (97.0) 17

18 Fluxo de Caixa In thousand of R$ From operating activities Income before income and social contribution taxes 14,757 (27,743) Reconciliation of income before income and social contribution taxes to net cash provided by operating activities 84, ,591 Depreciation and amortization 34,239 63,474 Fixed assets and Intangible write-off 1,333 1,191 Non deliverable forward expense - 9,469 Provision for contingencies 2,550 1,283 Interest expenses 22,140 48,386 Foreign exchange variation on financings 15,585 15,990 Bad debts 1,176 1,332 Variable compensation provision 617 5,483 Stock options plan 1,512 1,104 Interest expense on capital lease Provision for restructuring 751 (751) Provision for inventory losses 4,001 (1,069) Changes in assets and liabilities 38,560 19,725 Accounts receivable from clients 67,274 5,982 Inventories (92,768) 18,698 Recoverable taxes 2,156 6,172 Prepaid expenses (4,006) 4,466 Other credits (4,621) (1,645) Judicial deposits (770) (649) Accounts payable to suppliers 28,780 1,389 Related parties accounts payable Accounts payable due to substitution of licensed companies (300) - Tax liabilities 7,809 2,308 Labor liabilities 12,647 (4,256) Income tax and social contribution tax (1,001) - Other accounts payable 24,533 (11,791) Advances (1,341) (1,210) Net cash generated from operating activities 138, ,573 From investment activities Increase in fixed assets (200,639) (51,398) Increase in intangible assets (59,699) (23,351) Intangibles recieved Fixed assets sold (99,263) Net cash used in investment activities (260,338) (173,000) From financing activities with shareholders Loans and financing 358, ,309 Loans and financing repayments (19,044) (91,456) Paid interests (25,675) (43,733) Capital increase (reduction) 1,188-18

19 Cost of the Debentures transaction - 1,604 Treasury shares 2,745 (27,704) Dividends Payments - (10,000) Gain on sale of treasury shares (2,241) 318 Capital leasing (1,371) (1,260) Dividends distribution (10,002) - Non deliverable forward payment - (9,471) Accounts payable to shareholders (518) - Net cash used in financing activities with shareholders 303,691 (33,393) Increase (decrease) in cash and cash equivalents 181,411 (67,820) Cash and cash equivalents At the beginning of the year 72, ,307 At the end of the year 254, ,487 Increase (decrease) in cash and cash equivalents 181,411 (67,820) 19