Reclassifications in the Income Statement to Better Reflect the Essence of the Operations in line with BRGAAP and IFRS

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2 Reclassifications in the Income Statement to Better Reflect the Essence of the Operations in line with BRGAAP and IFRS In accordance with the BRGAAP and IFRS s principles that the essence of the operations must prevail over their form in the evaluation process for defining accounting treatment, operations were revised and some amendments made in the income statements. These are designed to reflect the essence of the operations with improved quality and clarity permitting a reclassification of some items in the income statement without however modifying reported net income. Details of the amendments can be found below: Advertising values received from suppliers, previously recorded as offsetting entries to Selling Expenses, have now been booked to Cost of Goods Sold, thereby generating an increase in the Company s Selling Expenses and a reduction in the Cost of Goods Sold, as a result increasing Gross Margin. Discounts on prepayments to suppliers, previously booked in two parts (in the Other Operating Income and Net Financial Results lines) are now booked entirely to Cost of Goods Sold, benefiting the Company s Gross Margin and consequently reducing the balance of the accounts for Other Operating Results and Financial Income; and The CDCI operation for Financing Delinquent Customers, previously recognized as an expense to Net Financial Income, is now booked to Results for Financial Services/Products, thus producing a reduction in this result as well as in the Company s Total EBITDA. 2

3 Highlights of the Period FY 2010 Net Revenues from Merchandise Sales +16.4% Same Store Sales of +10.3% Gross Margin from Retailing Operation of 52.0% Results from Financial Services of R$121.0 million, +79.1% EBITDA of R$505.1 million, +41.9% and EBITDA Margin of 20,5% Net Income of R$308.0 million, +62.5% Fourth Quarter 2010 Net Revenues from Merchandise Sales +15.7% Same Store Sales of +10.0% Results from Financial Services of R$33.5 million, +73.9% Losses from Renner Card transactions of 1.5% of Net Revenues from Merchandise Sales Net Income of R$123.2 million, +22.8% 3

4 Net Revenue from Merchandise Sales Net Revenue from Merchandise Sales R$ MM + 8.2% 1, % 2, , % % Q08 4Q09 4Q Q09/4Q08 9.5% 4Q10/4Q % 2009/ % 2010/ % Same Store Sales Growth Same Store Sales Growth 4

5 Store Productivity Net Revenue from Merchandise Sales per m 2 In R$ per m 2-3.0% + 7.5% 9,101 8,830 9, % + 6.3% 2,706 2,863 3,044 4Q08 4Q09 4Q

6 Store Operations Geographical Distribution December Selling Area & Number of Stores Thousand m 2 RR AP AC AM 2 1 RO MT 1 MS 1 PA 1 RS PR DF GO 5 5 SP 41 SC TO 8 1 MA MG 8 PI BA 5 RJ 15 CE 2 ES 2 1 RN 1 PB 3 PE AL 1 SE stores + 8.7% stores +10.0% stores Stores Distribution Centers Dec.08 Dec.09 Dec.10 6

7 Gross Profit from Merchandise Sales Gross Profit & Gross Margin from Retailing Operation R$ MM % % 1, , % +15.3% % % 51.1% 49.1% 50.1% 52,0% Gross Profit Gross Margin from Retailing Operation 4Q08 4Q09 4Q % 48.7% 49.2% 46.4% 47.5% 49.4% Gross Margin from Retailing Op. Excluding Reclassifications Gross Margin from Retailing Op. Excluding Reclassifications 4Q10: Even with the persistent cold weather the margin increased in 4Q10 Lower volumes of adverting values received from suppliers in 4Q10 impacted the gross margin after the reclassifications Year: Development of the supply chain; Better inventory mix and procurement planning; Improvement in processes. 7

8 Selling Expenses Selling Expenses R$ MM + 7.6% % % % % 26.2% 26.1% Selling Expenses 24.4% 22.5% 23.8% As a % of Net Revenues from Merchandise Sales Exclud. Reclassifications Selling Expenses % Net Revenue from Merchandise Sales 4Q08 4Q09 4Q % 21.3% 22.8% 24.9% 25.1% 24.8% 4Q10: Special projects: e-commerce and compact stores; Pre-operational expenses for 8 stores; Fixed cost structure of new stores Year: Dilution of fixed expenses in 1H10 Higher expenses in 2H10 8

9 General & Administrative Expenses General & Administrative Expenses R$ MM % +0.8% % +22.4% % 8.5% 8.6% 8.4% 7.3% 7.8% 4Q08 4Q09 4Q G&A Expenses As a % of Net Revenues from Merchandise Sales 4Q10: Structure for expansion over the next few years; Special projects: logistics/it and compact stores. Year: Dilution of expenses in 1H10; Higher expenses with special projects (compact, e-commerce and logistics in 2H10). 9

10 EBITDA from Retailing Operation EBITDA from Retailing Operation 4Q10 4Q Total EBITDA ( - ) Financial Services Result EBITDA from Retailing Operation EBITDA Margin from Retailing Operation (over Net Revenues from Merchandise Sales) 17.6% 19.2% 15.6% 13.6% Result Excluding Reclassifications 4Q10 4Q Total EBITDA EBITDA Margin (over Net Revenues from Merchandise Sales) 22.2% 22.4% 21.1% 17.7% EBITDA from Retailing Operation EBITDA Margin from Retailing Operation (over Net Revenues from Merchandise Sales) 17.3% 18.8% 15.1% 13.1% 10

11 Renner Card and Financial Services Result from Financial Services Breakdown (R$ MM) 4Q10 4Q Revenues, Net from Funding and Taxes Recovery of Past Due Receivables (Sales in the Interest-free Plan) Revenues Generated by Interest-bearing Plan Personal Loans and Other Financial Services Credit Losses, Net from Recoveries (17.3) (29.6) (88.2) (112.4) Sales in the Interest-free Plan (3.9) (8.6) (21.0) (36.4) Losses Generated by Interest-bearing Plan (8.7) (15.7) (46.9) (53.8) Personal Loans (4.7) (5.3) (20.3) (22.2) Operating Expenses (Renner Card & Financial Services) (18.5) (11.4) (52.4) (38.5) Total % of EBITDA 18.8% 12.3% 24.0% 19.0% Result Excluding Reclassifications (R$ MM) 4Q10 4Q Result from Financial Services

12 Total EBITDA EBITDA and EBITDA Margin R$ MM % % % +14.2% % % 21.6% 15.2% 16.8% 20.5% EBITDA EBITDA Margin over Net Revenues from Merchandise Sales Excluding Reclassifications EBITDA 4Q08 4Q09 4Q EBITDA Margin 16.7% 22.4% 22.2% 15.9% 17.7% 21.1% 12

13 Financial Results & Cash Position Financial Result, Net Financial Result, Net (R$ MM) 4Q10 4Q Financial Revenues Financial Expenses (4.2) (6.5) (11.5) (12.3) Net Effect of Adjustment of Long-Term Taxes to Present Value (0.5) Foreign Exchange Variation, Net (0.1) (0.4) Financial Result, Net Cash and Cash Equivalents, Net Net Cash (R$ MM) Dec.10 Sep.10 Dec.09 Cash and Cash Equivalents Total Loans and Financing (48.7) (37.6) (44.2) Short Term (12.3) (8.9) (8.9) Long Term (36.4) (28.7) (35.3) Net Cash

14 Net Income Net Income R$ MM % % % +22.8% % % 15.0% 8.3% 9.0% 12.5% 4Q08 4Q09 4Q Net Income Net Margin over Net Revenue from Merchandise Sales 14

15 Investments (CAPEX) CAPEX Evolution R$ MM Q08 4Q09 4Q CAPEX Summary (R$ MM) 4Q10 4Q New Stores Remodeling of Instalations IT Equipment & Systems Others Total

16 Expansion Plan Stores Inaugurated in 2010 City Location Format Date 1 Maceió - AL Shopping Iguatemi Maceió Traditional March 2 Joinville - SC Joinville Garten Shopping Traditional April 3 São Paulo - SP Avenida Paulista Traditional May 4 Campo Grande - RJ West Shopping Traditional June 5 São Paulo - SP Shopping Raposo Tavares Traditional June 6 Palmas - TO Shopping Center Capim Dourado Traditional August 7 Belo Horizonte - MG Boulevard Shopping BH Traditional October 8 Salvador - BA Salvador Norte Shopping Traditional November 9 Caxias do Sul - RS San Pelegrino Shopping Mall Compact November 10 Cotia - SP Shopping Granja Vianna Traditional November Stores to be Inaugurated in the 1H11 City Location Format Date São Paulo - SP Metrô Boulevard Tatuapé Blue Steel March Barueri - SP Shopping Tamboré Traditional April Indaiatuba - SP Polo Shopping Indaiatuba Compact April Ribeirão Preto - SP Novo Shopping Center Traditional April Blumenau - SC Blumenau Norte Shopping Compact April Campo Grande - MS Norte Sul Traditional May Recife - PE Shopping Boa Vista - Expansão II Traditional May Aracaju - SE Shopping Riomar Traditional May Brasília - DF Shopping Center Iguatemi Brasília Compact June Resende - RJ Shopping Center Patiomix Resende Compact June 11 Salvador - BA Shopping Center Paralela Compact December 12 São Gonçalo - RJ Shopping Boulevard São Gonçalo Traditional December Total stores to be inaugurated in 1H11 10 stores 13 Santa Maria - RS Royal Plaza Shopping Center Traditional December 14 Franca - SP Franca Shopping Center Compact December Total stores inaugurated in stores 2011 Total Number of Inaugurations: 30 stores (traditional and compact format) + 3 Blue Steel Pilots 16

17 Balance Sheet In R$ MM Dec Part. Sep Part. Dec Part. Cash & Cash Equivalents % % % Trade Account Receivables % % % Inventories % % % Inventories % % % Imports in Transit % % % Others % % % Permanent Assets % % % TOTAL ASSETS 2, % 1, % 1, % Loans and Financing % 8.9 0% 8.9 0% Financing - Financial Services Operations % % % Suppliers % % % Commercial Suppliers % % % Antecipation of Payments (169.3) -7% (153.1) -8% (165.9) -8% Suppliers of Material for Consumption % % % Taxes and Contributions Payable % % % Others % % % Not Current % % % Loans and Financing % % % Financing - Financial Services Operations FIDC % - 0% - 0% Others % % % Shareholders' Equity 1, % % % TOTAL LIABILITIES 2, % 1, % 1, % 17 17

18 Renner Card Number of Cards Issued Millions % MM new cards % Dec.08 Dec.09 Dec.10 Renner Card Average Ticket R$ +7.4% + 9.7% % + 8.1% Q08 4Q09 4Q

19 Payment Options 4 th Quarter, 2010 FY 2010 Renner Card (0+8) 13.0% Renner Card (0+5) 42.9% Renner Card (0+8) 13.0% Renner Card (0+5) 43.6% Cash 24.4% Cash 23.4% Other Credit Cards 19.7% Sales using the Renner Card 55.9% Other Credit Cards 20.0% Sales using the Renner Card 56.6% 4 th Quarter, 2009 FY 2009 Renner Card (0+8) 13.3% Renner Card (0+5) 46.3% Renner Card (0+8) 12.1% Renner Card (0+5) 48.1% Cash 22.7% Cash 21.9% Other Credit Cards 17.7% Sales using the Renner Card 59.6% Other Credit Cards 17.9% Sales using the Renner Card 60.2% 19

20 Employees Number of Employees + 8.7% % 1,934 new employees 12,423 9,647 10, stores 120 stores 134 stores Dec.08 Dec.09 Dec.10 New Hiring of Personnel by Area: Administrative: 402 new employees Stores: 1,532 new employees 20

21 Stock Appreciation Last 12 months Base LREN % 100 IBOV + 1.0% 50 Share Value Market Value LREN3 Nº of shareholders Foreign shareholders as a % of capital stock R$ / US$ R$ 6.9 bi / US$ 4.1 bi 7, % As at

22 ROIC Return on Invested Capital (ROIC) 35.0% 26.3% 27.0% ROIC = Adjusted Net Income / Operating Capital 1 (1) Current Assets + Non-current Assets + Fixed Assets Current Liabilities and Non-current Liabilitties* * Except Loans and Structural Finance (Banco do Nordeste) and Statutory Participations 22

23 Forward-Looking Statements 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. Except where indicated to the contrary, the following financial and operating information is in conformity with Brazilian Corporate Law, incorporating the amendments in Law 11,638/07, and the comparisons refer to the fourth quarter (4Q) and full year. As from December 2007, the Company has begun to include revenues from financial services in Gross Operating Sales Revenue. However, in this report, comparisons, percentages of expenses, and operating margins are related to Net Revenue from Merchandise Sales. 23

24 Contacts José Galló Adalberto Santos Chief Executive Officer Chief Financial Officer and IR Officer Investor Relations Team Paula Picinini Diva Freire Katia Ramires Lúcia Andrade IR Manager IR Analyst IR Analyst IR Assistant Tel. +55 (51) / / / ri_lojasrenner@lojasrenner.com.br 24