Institutional Presentation November, 2010

Transcription

1 Institutional Presentation November, 2010 José Galló: CEO Adalberto Santos: CFO and IRO Paula Picinini: Investor Relations Manager Investor Relations Team Tel. +55 (51) /+55 (51)

2 Lojas Renner 3Q10 Results Financial Services Any statement made during this presentation referring to the Company s business outlook, projections and financial and operating goals represent beliefs and assumptions of the Management of Lojas Renner S.A and are based on information currently available to the Company. Future considerations are not a guarantee of performance. These involve risks, uncertainties and assumptions since they refer to forward-looking events and, therefore depend on circumstances that may not occur. The audience should understand that general economic and industry conditions, as well as other operating factors may affect the Company s future results and lead to outcomes that may be materially different from those expressed in such future considerations. 2

3 Renner s Values Corporate Fundamentals MISSION To be the biggest and the best department store in the Americas for the middle/high income consumer segments with different styles, always in the forefront of fashion, quality, competitive prices and excellence in services rendered. Enchanting and innovating. RENNER S VALUES Enchanting is our goal We put ourselves in the place of our customers, doing everything for them that we would like to be done for us. We must understand their desires and needs, exceed their expectations and, so, enchant them. We are not simply employees, but rather enchanters of customers. We do not have a Customer Service Desk, because each one of us is a Customer Service Desk; if a problem arises, we sort it out immediately. Our Way of Doing Things We are a cheerful, innovative, ethical, austere, open doors company where communication is easy and transparent. We do things in a simple and responsive way, with much enthusiasm and passion. Our business is driven by persistence, creativity, and optimism, always very close to the market: we adopt a get up and go attitude. People We hire, develop and retain the best staff - staff that like people, who have a passion for what they do and a sparkle in their eyes. We work as a team and our staff have the authority and responsibility to take decisions. We provide the same ladder to all our employees so they can rise in the company at a pace equal to their talents, efforts and results. 3

4 Renner s Values Corporate Fundamentals Owners of the Business We think and act as owners of our business units, being rewarded as such. We have a sense of urgency, attitude and aggressiveness in seeking the best practices, constantly alert to all the opportunities in the market. We take decisions, running risks with responsibility; we accept the errors that come from moving up the learning curve, not seeking to blame but to identify causes that must be corrected. We are responsible for the long-term future of Renner, principally through attitudes and examples: an example is worth more than a thousand words. Determination to Achieve Exceptional Results We are responsible for achieving results not just good ideas. Results are what guarantee our investments, give a return to our shareholders, pay our salaries and make our growth and long-term continuity a reality. Quality We develop and implement standards of excellence in all that we do, since there is room for improvement in all that we do. Our products and services enjoy the highest levels of quality: this is written into our DNA. WE LOVE CHALLENGES: NOT KNOWING WHAT IS IMPOSSIBLE, WE JUST GET ON AND DO IT! 4

5 Lojas Renner Overview Second largest apparel department store chain in Brazil 127 stores 94% of the stores are located in shopping malls Rented stores with an average size of 2.1 thousand m 2 of selling area Product Mix: Apparel, footwear and accessories for women, men and children 16 private label apparel brands 1 private label brand of cosmetics, 1 of accessories and 1 of footwear Brands and products based on the Lifestyle concept (5 lifestyles under 6 private label brands) Renner Card: Instrument for fostering customer loyalty and opportunity for offering financial services (base: September 2010) 16.4 mm cards issued, 3 rd largest private label store card in Brazil 40% of cardholders are active Responsible for 57% of the Company s total sales Differentiated corporate culture - customer enchantment mission 95% of all customers are enchanted and satisfied out of 17.2 million opinions polled in 2009 Best Corporate Governance Practices Experienced management with interests aligned to those of the shareholders through stock option plan Bovespa Novo Mercado Listing, 100% diffused 5

6 Corporate Governance Independent members on the Board of Directors Different executives occupying the Chairman and the CEO positions Permanent Fiscal Council Shareholders Remuneration Committee Fiscal Council 100% free float Board of Directors 100% tag along 100% common shares Chairman Claudio Sonder Vice Chairman Egon Handel Member José Galló Member Miguel Krigsner Member Pedro Eberle Member Deborah Wright Listed on Bovespa s Novo Mercado CEO Own Internal Charters (Board of Directors and Executive Officers and Remuneration Committee) CEO José Galló Experienced management with interests aligned to those of the shareholders through Stock Option Plan Executive Officers Board of Directors Portal Corporate Social Responsibility and Sustainability Committee (an independent director, an officer and a consultant) CFO and IR Adalberto dos Santos HR Clarice Martins Procurement Haroldo Rodrigues Operations IT Leandro Balbinot Operations Paulo Soares Board Secretary Management Implementation of the Formal Appraisal of the Board of Directors 6

7 Store Growth Number of Stores and Net Revenues from Merchandise Sales (R$ MM) CAGR ( ) 1,956 2,116 Number of Stores = 18.6% Net Revenues = 20.0% 1,436 1,752 1, stores e South Southeast Northeast and North 7

8 Largest Apparel Retailers in Brazil 2009 Number of Stores Revenues R$ 3.1 billion 1 R$ 2.8 billion R$ 2.8 billion R$ 2.1 bi Target Public B / C / D A- / B / C+ B / C / D C Cards Issued 20.5 mm 15.2 mm 15.7 mm 13.0 mm Stores Located in Malls 75% 94% 62% 47% Distribution Centers SP / RJ SC / SP SP / RN PR / SP / PE / GO Store Chain Evolution + 165% % % % Source: company s websites and Renner estimates 1 Exame Megazine 8

9 Market Positioning Market Positioning of Main Apparel Store Chains 110% 100% Zara 90% Price 80% 70% 60% 50% Riachuelo C&A RENNER 40% 30% 20% 10% Informal Market Supermarkets Marisa 0% 0% 20% 40% 60% 80% 100% 120% Fashion Source: Credit Suisse, company websites and Renner estimates 9

10 Consumer Market Social Classes Distribution in Brazil ( ) (% of total urban population) Renner Target 5% 5% A From 7.7 to 7.9 million people 22% of consumption Monthly family income > R$8,100 24% 28% B From 37.0 to 43.4 million people 42% of consumption Monthly family income R$2,300 to R$8,100 39% 48% C From 60.6 to 77.1 million people 30% of consumption Monthly family income R$950 to R$2,300 32% 19% D/E From 48.7 to 31.0 million people 6% of consumption Monthly family income under R$ New participants in A, B and C income classes: Between 2003 and 2008: + 34 million consumers Between 2009 and 2014: + 30 million consumers Source: Target, Exame Magazine. Percentage calculated over a total urban population of million people in 2006 and million in

11 Consumption Evolution Increases of Consumption generated by social classes upgrades Apparel and footwear D/E classes + 125% C class + 141% B class + 132% A class Source: Exame Magazine Consumption per Income Level and 2010 (% growth per household) Renner Target Source: Barclays Capital 11

12 Competitive Advantages Focus on Women Value Proposition Total Income Evolution from 2003 to 2008: To be a store accomplice to the modern woman, offering various 42% styles of fashionable high quality merchandise at competitive prices, in a convenient and agreeable environment. Women account for 80% of apparel purchasing decisions Approximately 80% of Lojas Renner s customers are women Women 26% Men Women s Participation in the Brazilian Job Market 20% 40% 50% Source: Meio & Mensagem Especial, Época Magazine, O&M/LPM,IBGE, Exame Magazine and Lojas Renner 12

13 Competitive Advantages Enchantment Policy Enchant-Meter Results in 2009 (17.2 MM opinions recorded) Enchanted 57.1% 9.9 MM opinions Satisfied 38.2% 6.7 MM opinions ENCHANTMENT EXPECTATIONS SATISFACTION Unsatisfied 4.7% 814 thousand opinions The best retailer positioned on Customer Service Ranking In 2010, Lojas Renner received the Best Customer Service trophy for its 11th placed ranking among the 25 Best Companies in Customer Service in Brazil promoted by the Brazilian Institute for Customer Relations which analyzed 500 companies from 15 different segments. Source: IBRC (Instituto Ibero-brasileiro de Relacionamento com o cliente) and Revista Exame. 13

14 Competitive Advantages Lifestyle Concept Each brand represents the lifestyle of a group of clients, based on their attitude, personal interests, values and personality. Brands are not related to age, but to lifestyle. Casual Young Neo-Traditional Fashion Advantages to Clients Contemporary Advantages to Renner Facilitates product choice Takes better advantage of shopping time One-stop shop for the entire family Accessories and footwear to complement each lifestyle Increases cross-selling opportunities Higher inventory turnover, avoiding merchandise overlapping Reduces markdowns Opportunities to increase margins 14

15 Apparel Sector Market Share of the Largest Retailers in Brazil s Formal Market Others Retailers 1º C&A RANKING 16% 2º RENNER TOP5 3º RIACHUELO 4º PERNAMBUCANAS 5º MARISA Sector Characteristics Low degree of formality 40% of informality (estimates) Unconsolidated market Large chains with economies of scale and competitive prices Macroeconomic Influences Levels of Confidence Levels of Employment Disposable Income Credit Availability Small retailers with limited consumer credit Source: Jornal DCI, Euromonitor International and Lojas Renner estimates Note: C&A and Pernambucanas figures are estimated. 15

16 Macroeconomic Influences Level of Confidence Brazilian Consumer Confidence Level Evolution The INC varies from 0 to 200, 0 being the maximum of pessimism and 200 the maximum of optimism. The purpose of the INC is to measure the extent of confidence and the security of the Brazilian consumer in terms of his financial situation over time. Source: National Confidence Index (INC), prepared by Ipsos Public Affairs for the São Paulo Commercial Association (ACSP) 16

17 Macroeconomic Influences Levels of Employment Unemployment Rate % of EAP 10.0% 9.3% 7.9% 8.1% 6.8% F Trendline Source: Santander Macro Report 17

18 Macroeconomic Influences Disposable Income Gross Income and Families Consumption Evolution (In R$ billion) % 5,021 4,211 1,150 1,433 1,893 1,161 2,320 1,429 2,941 1,812 3,533 2,210 2,622 3, e 2012e 2014e National gross disposable income Families consumption Source: Exame Magazine. 18

19 Macroeconomic Influences Credit Availability Credit Evolution to individuals as a percentage of GDP 15.0% 15.7% 8.8% 9.7% 11.2% 12.8% 6.7% 6.2% 6.8% 7.6% 7.0% 8.1% 7.8% e Credit to individuals / GDP Tendency Delinquency rate for individuals (End of each period) Source: Consultancy Group Gouvêa de Souza and central Bank. 19

20 Macroeconomic Influences Income Commitment Indebtedness and Income Commited to Debt of Brazilian Population Indebtedness Percentage of Income Commited to Debt Source: BACEN. 20

21 Perspectives 2010 MACRO Economic stability Credit expansion and delinquency stabilized Higher levels of employment / Higher level of signed employment cards Recovery in family consumption growth Growth in the purchase power of B income class Credit Labor Market Consumer Confidence = Retail Growth Increase in Consumer Confidence levels RENNER Favorable macro environment Operational initiatives for gross margin gains Fixed cost structure Higher Financial Products Results Gross Margin Operating Leverage Financial Products = EBITDA 21

22 Growth Opportunities EBITDA Evolution R$ MM 7 E-commerce 6 Additional Financial Services 5 New Formats Increase in Store Productivity Geographical Expansion Reinforcing Presence in the Existing Markets Growth in Retailing % 8.6% 7.3% % % 12.5% 12.8% 16.3% 15.9% 17.7% EBITDA EBITDA Margin 2005 does not include the Extraordinary Expenses related to the Public Offering of Shares 22

23 Growth Opportunities Market Share Renner Card Penetration over the estimated Potential Market 34 stores 59 stores 27 stores South Region Southeast Region Midwest, Northeast and North Regions Average Age of Stores 13 years 7 years 4 years Average Age of the Chain 8 years Renner Card s market share as a percentage of the potential market Potential increase Total market 23

24 Growth Opportunities Compact Stores Same target public as the current model Average size of 1.2 thousand m2 Smaller back office / more frequent deliveries of supplies Differentiated equipment/greater display capacity Capex proportional to store size Returns similar to existing stores More opportunities for the stand-alone format Potential to open 80 to 100 new stores in the next 5 years Store Productivity (Net sales per m 2 ) Current Renner average Average Estimate of Compact Stores 34 stores 72 stores 17 stores Potential of increase South Region Souteast and Midwest Regions North and Northeast Regions Current productivity 24

25 Lojas Renner 3Q10 Results Financial Services 25

26 Evolution of Same Store Sales Accumulated Growth of Same Store Sales (100 Base from 2004 to 2009) SSS º Quarter 7.3% 22.0% 8.8% 11.5% 2º Quarter 11.7% 20.6% 9.6% 5.4% 3º Quarter 17.4% 16.3% 9.3% 5.0% 4º Quarter 18.5% 11.7% 7.1% -5.4% YEAR 14.5% 16.7% 8.5% 2.7% % 2.1% 1.3% 9.5% 1.4% % 7.4% 10.5% 26

27 Income Statement 3Q10 Results (In R$ million) 3Q10 3Q09 Var. 9M10 9M09 Var. Total Net Revenue % , % Net Revenue from Merchandise Sales % 1, , % Gross Profit from Merchandise Sales % % Gross Margin from the Retailing Operation (%) 47.3% 46.0% 1.3 pp 49.5% 46.8% 2.7 pp Operating Expenses (SG&A) (208.5) (175.5) 18.8% (570.8) (507.8) 12.4% SG&A as a % of Net Revenue from Merchandise Sales -36.7% -36.1% -0.6 pp -34.8% -36.2% 1.4 pp Result from Financial Services % % EBITDA (Retail + Financial Services) % % EBITDA Margin (%) 18.5% 15.2% 3.3 pp 20.6% 15.3% 5.3 pp EBITDA from the Retailing Operation % % EBITDA Margin the Retailing Operation (%) 10.7% 9.6% 1.1 pp 14.0% 10.2% 3.8 pp Net Income % % Net Margin (%) 10.0% 6.3% 3.7 pp 11.3% 6.4% 4.9 pp ROIC (%) 6,3% 4.2% 2.1 pp 21,7% 12,8% 8.9 pp Same Store Sales (%) 10.5% 1.3% 9.2 pp 10.5% -2.2% 12.7 pp 27

28 Balance Sheet In R$ MM Sep Part. Jun Part. Sep Part. Cash & Cash Equivalents % % % Trade Account Receivables % % % Inventories % % % Inventories % % % Imports in Transit % 5.8 0% 9.2 0% Others % % % Permanent Assets % % % TOTAL ASSETS 1, % 1, % 1, % Loans and Financing % % % Financing - Financed Sales and Personal Loans % % % Suppliers % % % Commercial Suppliers % % % Antecipation of Payments (153.1) -8% (153.0) -8% (119.6) -7% Supplier of Material for Consumption % % % Taxes and Contributions Payable % % % Others % % % Not Current % % % Shareholders' Equity % % % TOTAL LIABILITIES 1, % 1, % 1, % 28

29 Financial Result & Cash Position Financial Result Financial Result, Net (R$ MM) 3Q10 3Q09 9M10 9M09 Financial Revenues Financial Expenses (2.1) (2.0) (7.3) (5.8) Net Effect of Adjustment of Long-Term Taxes to PV (1.2) Foreign Exchange Variation, Net (0.2) (1.1) Cost of Financing Delinquent Customers, Net (7.5) (8.3) (20.3) (22.6) Financial Result, Net 4.8 (4.2) 10.4 (11.1) Cash and Cash Equivalents, Net Cash and Cash Equivalents, Net (R$ MM) Sep.10 Jun.10 Sep.09 Cash and Cash Equivalents Total Loans and Financing (147.6) (149.8) (154.2) Short Term (118.9) (118.9) (116.7) Long Term (28.7) (30.9) (37.5) Cash and Cash Equivalents, Net

30 Store Operations Geographical Distribution September Selling Area & Number of Stores Thousand m 2 RR AP +7.7% AC AM 2 1 RO MT 1 MS 1 PA 1 RS PR MA TO 1 DF GO 5 5 MG 7 SP 39 SC 8 PI BA 3 RJ 14 CE 2 ES 2 1 RN 1 PB 3 PE AL SE % stores stores stores Sep.08 Sep.09 Sep.10 Stores Distribution Centers 30

31 Expansion Plan and CAPEX Expansion Plan City Location Date 1 Maceió - AL Shopping Iguatemi Maceió March 2 Joinville - SC Joinville Garten Shopping April 3 São Paulo - SP Avenida Paulista May 4 Campo Grande - RJ West Shopping June 5 São Paulo - SP Shopping Raposo Tavares June Total stores inaugurated in 1S10 5 stores City Location Date 6 Palmas - TO Shopping Center Capim Dourado August 7 Belo Horizonte - MG Boulevard Shopping BH October 8 São Gonçalo - RJ Shopping Boulevard São Gonçalo November 9 Salvador - BA Salvador Norte Shopping November 10 Cotia - SP Shopping Granja Vianna November 11 Santa Maria - RS Royal Plaza Shopping Center November Total stores to be inaugurated in 2S10 6 stores City Location Date 12 Caxias do Sul - RS San Pelegrino Shopping Mall November 13 Salvador - BA Shopping Center Paralela November 14 Franca - SP Franca Shopping Center December Compact stores to be inaugurated in 4Q10 3 stores CAPEX CAPEX Summary (R$ MM) 3Q10 3Q09 9M10 9M09 New Stores Remodeling of Instalations IT Equipment & Systems Others Total

32 Result from Financial Services Result from Financial Services Breakdown (R$ MM) 3Q10 3Q09 9M10 9M09 Revenues Recovery of Past Due Receivables (Related to Merchandise Sales) Additional Revenues Generated by Interest-bearing Plan Personal Loans and Other Financial Services Credit Losses, Net of Recoveries (18.7) (28.5) (70.9) (82.8) Merchandise Sales (3.3) (10.8) (19.8) (32.0) Additional Losses Generated by Interest-bearing Plan (10.0) (12.1) (35.4) (33.9) Personal Loans (5.4) (5.6) (15.7) (16.9) Operating Expenses (Renner Card & Financial Services) (12.4) (9.7) (33.8) (27.1) Total % of EBITDA 41.9% 37.1% 32.0% 33.0% Result from Financial Services (R$ MM) Renner Card (Related to Merchandise Sales) Financial Services (0+8, Personal Loans and Other Financial Services) Operating Expenses (Renner Card & Financial Services) 3Q10 3Q09 9M10 9M (12.4) (9.7) (33.8) (27.1) Total

33 Renner Card Number of Cards Issued Millions Renner Card Average Ticket R$ +12.0% + 7.4% + 8.5% +11.9% + 8.5% + 7.2% Sep.08 Sep.09 Sep.10 3Q08 3Q09 3Q10 9M08 9M09 9M10 Meu Cartão (My Card) 33

34 Payment Options 3 rd Quarter, rd Quarter, 2009 Cash 23.1% Renner Card (0+8) 13.0% Renner Card (0+5) 44.0% Renner Card (0+8) 13.0% Renner Card (0+5) 47.6% Cash 21.4% Other Credit Cards 19.9% Sales using the Renner Card 57.0% Other Credit Cards 18.0% Sales using the Renner Card 60.6% The first 9 months, 2010 The first 9 months, 2009 Renner Card (0+8) 13.0% Renner Card (0+8) 11.5% Cash 22.8% Renner Card (0+5) 44.0% Cash 21.3% Renner Card (0+5) 49.1% Other Credit Cards 20.2% Sales using the Renner Card 57.0% Other Credit Cards 18.1% Sales using the Renner Card 60.6% 34

35 Lojas Renner 3Q10 Results Financial Services 35

36 Offer of Financial Services Credit sophisticated Banked 28.4 MM Unbanked 66.2 MM Best Clients 28.4 MM E28.4 Potential Clients 75.6 MM Employed (F+I) 75.6 MM Space for retail credit Credit unsophisticated 19.0 MM Unemployed Brazilian Population: 189.1MM Economically Active: 94.6 MM Source: IBGE / FEBRABAN / Lojas Renner estimates / Exame Magazine. Data Popular Institute and WMcCann Research 36

37 Pillars of the Business Realize, Renner Card and Co- Brand Card: a broad portfolio on offer Realize REVENUES Personal Credit Quick Withdrawal Check Guarantee Capitalization Bonds Insurance Personal Credit Check/ Debit Renner Card REVENUES 0+8 Installments Overdue Charges Insurance Capitalization Co- Brand Card REVENUES 24-hour bank withdraw Revolving Insurance Capitalization bonds Mgm Fee/ outside use Co-branded Card Annuity Reduction in the use of others cards Financial Gain Financial and Merchandising Gain Focus Distribution of Financial Products Capture of New Customers Leveraging of Sales Generation of Results 37

38 Financial Services Evolution Evolution of Personal Loans R$ MM - Principal Q08 4Q08 1Q09 2Q09 3Q09 4Q09 1Q10 2Q10 3Q10 Quantity of Capitalization Bonds Issued In thousand Q08 4Q08 1Q09 2Q09 3Q09 4Q09 1Q10 2Q10 3Q10 38

39 Financial Products Interest-bearing Sales (0+8) Information Average Ticket: Percentage of Sales: Interest: Spread: 50% higher than Average Ticket for 0+5 sales 12% of 2009 sales 6.9% p.m. + IOF (taxes) ( - ) Cost of Funding ( - ) Taxes (ISSQN, PIS, COFINS) Approximately 4.5% p.m. Recognition of Revenue: Over the course of the contract, net of funding and taxes Provision for Losses: Additional losses are booked against addition revenues generated Initial Target: 15% of total sales as from the 2nd year of operation (2007) Risk of the Operation: Lojas Renner 39

40 Financial Products Personal Loans Information Products: Personal Loans (PL), Quick Withdrawal (QW) and Check Guarantee (CG) PL: betweeen R$ and R$4, QW: maximum of R$ Values: CG: maximum of R$ 10, Average Ticket: R$ (3Q10) Selection of Customers : Selected customers holding the Renner Card for more than one year Payment Term: Interest: Spread: PL: 12 month QW: 5 months CG: 15 months Average Term: 8.3 months PL: maximum of 12.50% p.m. QW: 12.50% p.m. CG: maximum of 10.65% Average of: 11.2% p.m. Approximately 10% p.m. Recognition of Revenue: Over the course of the contract according to the Financial Size of Portfolio: Provision for Losses: Risk of the Operation: R$ million. Adjusted present value R$ 73.1 million 15-20% over the loans generated. The percentage provisioned increases gradually, the greater the delay for periods in excess os 180 days the outstanding amount is 100% provisioned according to BACEN Instruction Lojas Renner 40

41 Financial Products Insurances Selection of Customers: Renner Card s entire customer base Information Products: Renner Card Unemployment Ensurance: offered at the checkouts when making purchases using the Renner Card. Benefits include indemnity for temporary incapacity and involuntary unemployment insurance for the value of purchases made at Renner, as well as indemnification for natural and accidental death and permanent invalidity as the result of an accident. The customer is also eligible for a Capitalization Bonds through the Federal Lottery System. Renner Card Personal Loan Insurance Covering Unemployment: this can be acquired at Realize and is linked to a Personal Loan contract. The insurance policy guarantees that the loan is settled by the insurer in the event of involuntary unemployment or temporary incapacity in addition to indemnification in the event of natural or accidental death and permanent invalidity caused by accident. The customer is also eligible for a Capitalization Bonds through the Federal Lottery System. Renner Card Loss or Theft Insurance: this is available through the store credit area or directly from the Realize financial services desk. This product is independent of store purchases, in the event of loss or theft the insurance guaranteeing cover for purchases of up to R$ The customer is also eligible for a Capitalization Bonds through the Federal Lottery System. Renner Home Insurance: includes coverage in case of fire, explosion, smoke damage as well as rental charges and material or personal damage caused to persons present in the property. Also available from the Realize Renner financial services desk, this service offers 24-hour assistance for emergency repairs. The customer is eligible to win a R$ 50,000 Capitalization Bond, this scheme also operated through the Federal Lottery System. Renner Viver Bem Personal Insurance: guarantees cover in the event of accidental death or total permanent incapacity due to an accident. The insurance cover offers additional advantages such as discounts of up to 30% in products and services acquired from accredited establishments, funeral assistance and a basic basket of goods. The customer is also eligible to win a R$ 5,000 Capitalization Bond through the Federal Lottery System. This service is offered by the stores Realize Renner financial services desk. Partner: Porto Seguro S.A. Renner Revenue: Fee on contracts sold Startup of Operations: 2nd semester of

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43 Fact Sheet Lojas Renner is the second largest apparel department store chain in Brazil with 127 stores through the Country. The Company designs, develops and sells quality women s, men s, teen and children s apparel, footwear and underwear through 16 private brands organized around the Lifestyle concept, each brand targeting a specific style of dressing. Lojas Net Sales 1, , % 14.5% 1, % 1, % 2, % Net Sales Same Stores Sales Renner also sells accessories and cosmetics through two private brands while offering third-party branded merchandise in certain product categories. The Company s principal target customers are women between the ages of 18 and 39 who are in the middle / high levels of the Brazilian purchasing power spectrum. Lojas Renner offers its customers fashionable, high quality merchandise at competitive prices, through a purchasing method that is simple, efficient and well planned and with a special focus on Gross Profit 1, % % 46.4% 45.6% 45.6% Gross Profit Gross Margin serving the customer. Under the enchantment mission, each employee is expected to exceed customer expectations. EBITDA As of August 2005, Lojas Renner began to offer financial services, such as financed sales, personal loans, capitalization bonds (annuities) and insurance policies % % 16.3% 15.9% 17.7% EBITDA EBITDA Margin

44 Fact Sheet Average Ticket Operational Data Net Sales (in R$ MM) 1, , , , , Average Ticket Renner Card Sales Net Sales Nonimal growth over the previous year Same Store Sales Nonimal growth over the previous year 19.1% 26.4% 22.0% 11.7% 8.2% 14.5% 16.7% 8.5% 2.7% 1.4% 73.8% 71.3% 67.2% 63.1% 60.2% Number of Stores End of Period Selling Area in Thousand m 2 End of Period ,7 178,0 203,5 229,7 249,7 FY 2009 Renner Card (0+8) 12.1% Renner Card (0+5) 48.1% Net Sales per m 2 (R$ `000) 7,7 8,9 9,3 9,1 8,8 Number of Employees End of Period Working Capital 6,262 7,764 9,183 9,647 10,489 Cash 21.9% Trade Accounts Receivable (days) Financing - Financed Sales / Personal Loans (days) Other Credit Cards 17.9% Sales using the Renner Card 60.2% Trade Accounts Payable (days) Inventory (days) ROIC % 22.4% 30.3% 27.0% 26.7% Financial Services Financed Sales (0+8 monthly 6.9% p.m.) Personal Loans ( % p.m.) Capitalization Bonds (annuities) Insurances Last update: ROE % 24.6% 26.6% 25.1% 25.5% Dividend Yield 3.6% 2.0% 2.7% 2.4% 3.0% Pay Out 82% 75% 75% 25% 75% 1 NOPAT /Invested Operating Capital 2 Net Income /Shareholders Equity 44