Institutional Presentation March 2013
Marisa at a glance Largest women fashion and lingerie retailer in Brazil 64 years of track record Focus on the middle class National footprint 2 Multiformat store strategy Financial services platform Brand strength
Marisa 64 years of a Growth Strategy Foundation Development and Growth Acceleration Current Status Foundation and development of business model Sales Area ( 000 m 2 ) Number of Stores 72 73 79 88 95 107 152 138 140 142 148 148 149 166 Management professionalization and beginning of strong growth phase 207 236 250 201 217 227 295 277 Growth acceleration 346 336 379 368 Continuous growth Store maturation Footwear rollout plan More per margin 1948... 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 -----> Future 3
C Class : The Emerging Brazilian Middle Class Brazilian Population per Income Class Focus on the C Class Consumers Income Class 181 mm 193 mm 197 mm Income Class: A / B High ( A ) C Average monthly income: R$1.829-3.379 42,4% 53,9% +27 million people +11 million people 58,3% Mid-High ( B) Middle Class ( C ) C&A Renner Riachuelo D E Lower Income Source: Data Popular 2004 2011E 2014E 4
The Brazilian Apparel Market Apparel Spending in Brazil CAGR of +12,2% over the last 9 years 72,9 D / E Classes 18,0% A / B Classes 33,7% R$ 35,2 bi 25,9 Middle Class 48,3% 2002 2011 5 Source: Data Popular, inflation adjusted based on the IPCA
Mature and Sophisticated Marisa Top of Mind Marisa Brand on Apparel Marisa Top of Mind Brand: Middle Top of Class Mind (Dec/11) Surveys Marisa Brand Positioning 1) Marisa Brand on Apparel: Middle Class (Dec/12) 28% 22% 8% 5% 4% 3% 2% Feminine and Sensual 2) Marisa Brand on Lingerie: All Income Classes (Jul/09) Renner Riachuelo C&A Young and Trendy 42% 14% 9% 4% 4% 4% 3% Traditional 6 Source 1) Officina Sophia. Conducted with women of the B and C income classes between 18 and 55 years old in different regions in Brazil Source 2) Nielsen. Conducted with women of the A,B and C income classes in Brazil between 20 and 45 years old in different regions in Brazil and that bought lingerie over the period
Store Portfolio Profile of our 368 Store Portfolio as of December/12 Expanded Feminine 1 1 Format Venue 191 251 Shopping Malls Street 177 91 26 Lingerie 2 5 2 3 11 1 10 5 2 13 8 3 5 5 11 3 Southeast South North 4 10 139 25 6 Region 208 55 55 27 23 16 38 Northeast Midwest 26 13 Distribution Centers Number of Marisa stores 7
Large Portion of the Sales Area Still Under Maturation Sales Area Breakdown by Year of Launch 379,191 m 2 of total sales area as of Dec/12 2012 8% 2011 13% 34% of sales area is less than 3 years old More than 128,925 m 2 of sales area still under maturation phase Prior to 2009 62% 2009 4% 2010 12% 8
9 Marisa Expanded between 1,000m² and 3,000m²
10 Marisa Feminine between 400m² and 1,000m²
11 Marisa Lingerie between 100m² and 400m²
Recent Achievement
More per m 2 : Rationale Objective is maximize Marisa s total return ( More per M² ) Revenue by subsector (in R$/m²) 2 1 3 Review the subsectors area allocation, adding lifestyles if applicable Increase subsectors profitability Average Marisa 13 Label Sector 1 Sector 3 Sector 2 Sector 4 Area in m2 Width proportional to sales area (m²)
More per m 2 : Introduction of Footwear, Office wear & Plus Size Rationale Co-Branded Card Consumption Profile Results of market research conducted with women between 20 and 40 years old, 50% clients and 50% non clients: 88% want Marisa to offer shoes Other 43% Supermarkets 23% Consumer acquire, on average, 1.8 pairs of shoes on each ticket Average price of shoes significantly higher than apparel Electronics 7% Department Stores 8% Apparel and Shoes Stores 19% Footwear Rollout Plan* Retail Net Revenue per M² 500 2011 2012 2013 2014 More per M² 6.736 14 390 390 400 415 365 365 300 337 342 264 200 202 125 100 25 0 0 1Q 2Q 3Q 4Q * Expected 6.094 6.000 5.829 2009 2010 2011 2012
Efficiency Plan Final Results SG&A Savings in the 2012 (R$ million) Ongoing Impacts SG&A / Total Net Revenue Savings 141,1 + Inflation 149,3 55,4 141,2 33,9% + Inflation + Sales Area Growth 689,2 824,6 777,3 32,1% 31,6% 31,9% SG&A 2011 SG&A 2012* SG&A 2012 Actual 2009 2010 2011 2012 * 2011 Selling Expenses adjusted by inflation and sales area growth 2011 G&A Expenses adjusted by inflation 15
More per Margin: Supply Chain Management Supply chain monitoring process Gross Margin (%) Supplier W (example) ZZZ items Turnover 16 High Performance Low Performance
New Sales Channel Strategic Map for 2013
Apparel Consumption Investment Thesis Market Unconsolidated apparel retail market in Brazil Underpenetrated and growing market as income increases Addressable market of 800 stores in Brazil 80% 4,8% 3,8% 3,4% 3,4% 3,0% 1,7% C&A Renner Riachuelo Hering Marisa Pernambucanas Outros Positioning & Leading Brand Throughout its 64 years, Marisa has focused on Feminine Apparel Sales And we are top of mind in both Lingerie, for all women classes, and for C Class women in feminine apparel 28% 22% 8% 5% 4% 3% 2% 1,5 UK Solid Growth History 13%+ Sales area increase p.y. since IPO in 2007 19%+ Sales CAGR since IPO in 2007 31%+ EBITDA CAGR since IPO in 2007 38%+ Net Income CAGR since IPO in 2007 1,0 US Russia S. Africa 0,5 Brazil Argentina 0,0 0 15 30 45 60 75 China GDP 18 Source: Marisa, Euromonitor, IBGE and BofA Merrill Lynch
Investment Thesis 1 1 Flexible Expansion Plan To capture income increase from real Class C Decentralized Growth Strategy Unbiased to depend on mall projects growth 51 new stores in 2013 and R$ 155 million in investments RS 55 million in maintenance, IT and remodeling 2 5 2 3 26 11 10 1 13 5 2 13 10 25 4 139 16 38 6 8 5 5 11 3 3 Expanded Feminine Multi service & Format 3 store formats to reach women in different shopping timing and venue Consumer Financing to support retail performance Financial Products as ancillary source of results Shopping Malls 191 251 Southeast Street 177 91 South 26 Lingerie North 208 55 55 27 23 Northeast Midwest 2013 Roadmap Consolidation of Rollout Plan of More per Square Diffusion of Efficiency Plan as Cost Control is linked to compensation More per Margin Development of Alternate Sales Channels More per Margin Project Efficiency Plan Conclusion New Sales Channels Footwear 19
20 Financial Highlights 4Q12 and 2012
Format Same Stores All Stores Number of Stores and Sales Growth Sales Growth Comments 4Q11 4Q12 2011 2012 8.3% 22.7% 16.9% 20.5% Sales recovery 2.3% 14.1% 7.3% 10.1% Improvement in the performance of the new stores Number of Stores and Sales Area # of Stores Sales Area (thousand m² 4Q11 4Q12 4Q11 4Q12 Marisa Expanded 226 251 278.7 306.4 Marisa Feminine 84 91 61.7 66.8 Marisa Lingerie 26 26 6.0 6.0 Total 336 368 346.4 379.2 Factors that contributed to improvement : Assertiveness in the campaign and introduction of new sectors Summer collection well received by customers Macro scenario more favorable 21
Retail Net Revenues Retail Net Revenue (R$ million) Comments + 20.5% 22.7% Growth + 22.7% 1.990 2.399 Same store sales recovery Improvement in the performance of the new stores 651 799 Good results from More per M² Project 4Q11 4Q12 2011 2012 22
Retail Gross Profit and Gross Margin Gross Margin Gross Profit Retail Gross Profit (R$ million) Comments Comentários 50.8% 51.8% 52.4% 49.9% + 14.7% Increase of 25.1%, reaching 413.7 million + 25.1% 1.0 p.p increase in the gross margin 330,7 413,7 1.042,7 1.196,0 Balanced inventories and less markdowns in the 4Q12 4Q11 4Q12 2011 2012 23
Retail Gross Margin Retail Gross Margin Comments 54,1% 53,6% 51,4% 52.5% 08-11 Average 50,8% 51,8% Retail Gross margin increased 100 basis points, associated with : (i) summer collection well received by customers 4Q08 4Q09 4Q10 4Q11 4Q12 (ii) balanced inventories 52,5% 52,6% 52,4% (iii) stronger sales 51.7% 08-11 Average 49,1% 49,9% The average of the last 4 years is the appropriate benchmark for comparison 2008 2009 2010 2011 2012 24
% Retail Revenues Selling Expenses Retail Selling Expenses R$/m2 Selling Expenses (R$ million) Comments 33.8% 30.3% 34.6% 32.4% 10.1% increase - 0.5% 663 659 + 1.9% 2,077 2,117 + 12,8% Growth in nominal terms was lower than sales area growth (10.7%) + inflation (5.84%) in the period + 10,1% 777,3 689,2 219,9 242,2 This result reflects the initiatives of our Efficiency Plan As a percentage of Retail Net Revenues, Selling Expenses decreased 3.5 p.p 4Q11 4Q12 2011 2012 25
% of Retail Revenues Retail G&A Expenses G&A Expenses General and Administrative Expenses (R$ million) Comments 5.3% 5.1% 5.8% 4.8% 17.8% Growth - 0.4% Effect of management compensation in 4Q12 (Bonuses) that there wasn t in 4Q11. +17.8% 116,0 115,5 As a percentage of Retail Net Revenues, G&A Expenses decreased 1.0 p.p 34,5 40,7 4Q11 4Q12 2011 2012 This result reflects the initiatives of our Efficiency Plan 26
EBITDA Mg. EBITDA Retail EBITDA and EBITDA Margin Retail EBITDA (R$ million) Comments 13.0% 17.9% 13.6% 13.3% +17.9% 68.6% increase, reaching R$143,2 million 68.6% EBITDA Margin improved 4.9 p.p. in the 4Q12 84,9 143,2 271,5 320,1 4Q11 4Q12 2011 2012 Mainly due to lower expenses and gross margin gains 27
Marisa Cards Accounts Base Active Account Base (million accounts) Comments +17.7% 0,5 0,5 0,4 0,5 0,4 2,3 2,1 2,2 2,4 2,3 0,7 0,7 0,6 0,6 0,6 0,7 0,6 2,1 2,1 2,2 2,3 2,2 2,4 2,6 Private Label: 8.7 million eligible (+9.3%) and 2.6 million active accounts (+17.6%). Co-Branded: 965 thousand eligible (+10.7%) and 731 thousand active accounts (+18.4%). Total active accounts: 17.7% growth 1Q10 2Q10 3Q10 4Q10 1Q11 2Q11 3Q11 4Q11 1Q12 2Q12 3Q12 4Q12 Private Label Co-Branded Benefits of our loyalty program ( Programa Amiga ) Recovery in the retail activity and in the demand for credit 28
Private Label Card Receivables Portfolio Private Label Receivables Portfolio (R$ million) Private Label (R$ million) 4Q12 %Total 4Q11 %Total %Var On time: 436,4 70,7% 361,8 70,2% 20,6% Overdues: 181,0 29,3% 153,9 29,8% 17,6% 1-30 days 77,3 12,5% 60,1 11,7% 28,6% 31-60 days 26,4 4,3% 17,8 3,5% 48,4% 61-90 days 21,9 3,5% 20,3 3,9% 7,9% 91-120 days 20,7 3,4% 21,4 4,1% -3,2% 121-150 days 18,6 3,0% 18,3 3,5% 1,6% 151-180 days 16,0 2,6% 16,0 3,1% -0,1% Total 617,4 100,0% 515,7 100,0% 19,7% 10,0% 8,0% 6,0% 4,0% 2,0% 0,0% Private Label Card Receivables EFICC 2009 2010 2011 2012 jan feb mar apr may jun jul aug sep oct nov dec 19.7% increase in receivables portfolio Recovery in the retail activity Private Label card share on sales recovery Potential delinquency at normalized levels 0.5 p.p. decrease in the past due receivables in regards to total receivables 29
SAX Personal Loans Receivables Portfolio SAX Personal Loans Receivables Portfolio (R$ million) SAX Personal Loans (R$ million) 4Q12 %Total 4Q11 %Total %Var On time: 67,8 72,8% 36,7 67,7% 84,9% Overdues: 25,4 27,2% 17,5 32,3% 45,0% 1-30 days 5,5 5,9% 3,3 6,2% 66,0% 31-60 days 3,3 3,5% 2,2 4,0% 50,9% 61-90 days 2,9 3,1% 2,0 3,7% 44,4% 91-120 days 2,6 2,8% 1,9 3,5% 39,2% 121-150 days 2,3 2,5% 1,7 3,1% 37,2% 151-180 days 2,1 2,2% 1,5 2,9% 33,5% 181-240 days 3,4 3,7% 2,6 4,8% 33,2% 241-300 days 2,3 2,4% 1,6 3,0% 38,5% 301-360 days 0,9 1,0% 0,6 1,2% 47,0% Total 93,2 100,0% 54,2 100,0% 72,0% 14% 12% 10% 8% 6% 4% 2% 0% SAX Personal Loans EFICC 2009 2010 2011 2012 jan feb mar apr may jun jul aug sep oct nov dec 72.0% growth, reaching R$93,2million 5.1 p.p. decrease in the past due receivables in regards to total receivables Potential delinquency at normalized levels 30
Consolidated EBITDA Mg. EBITDA / Consolidated Net Revenue EBITDA Consolidated EBITDA (R$ million) 14.5% 21.5% 16.5% 17.3% 111.3 200.4 403.3 23.6% 498.8 41,9 80.1% 17,9 113,9 136,8 4,6 21,8 84,9 12,9 44,3 143,2 271,5 320,1 4Q11 4Q12 2011 2012 31
Net Financial Debt Net Financial Debt Comments Net Debt (R$ million) 2012 2011 Net Debt Gross debt (A) 772,0 984,5 Short term debt 89,7 297,5 Long term debt 682,3 687,0 Cash and equivalents (B) 286,5 641,7 Net debt (A) 485,5 342,8 Shareholder equity (B) 1.039,0 857,8 Total capital (A+B) 1.524,5 1.200,6 Financial Leverage Gross debt / (Gross debt + Equity) 43% 53% Net debt / (Net debt + Equity) 32% 29% Net debt / EBITDA (x) 0,97x 0,85x Net debt reached R$485.5 million Strategy of optimizing capital structure implemented during 2011 Target leverage: 40% of net debt to Equity 32
Capex Capex (R$ million) Capex (R$ million) 4Q12 4Q11 %Var 2012 2011 %Var New stores 55,7 65,6-15,1% 116,2 180,4-35,6% Stores remodeling 4,2 8,3-49,5% 17,8 35,4-49,9% Logistics 4,6 1,9 143,1% 6,2 13,9-55,4% IT 6,3 2,9 116,2% 23,4 12,9 81,7% Others 7,3 3,3 123,1% 20,4 12,4 64,2% Total 78,2 82,1-4,8% 183,9 255,0-27,9% Expansion Plan Capex reached R$ 78,2 million 25 stores opened in 4Q12 Formats: 15 Marisa Expanded and 10 Marisa Feminine. Delay in the opening of a shopping mall 32 new stores opened in 2012; initial plan were 33 stores 33
Paulo Borsatto CFO and IR Director Francisco Bianchi IR Manager Gabriel Succar IR Analyst Contact: dri@marisa.com.br Investor Relations Team