great m&a opportunities identification BRAZILIAN footwear ... · Brazilian footwear industry is growing and presents excellent acquisition ... Grendene Public Company ... CEO Dreger

great m&a opportunities identification BRAZILIAN footwear INDUSTRY OVERVIEW

2009-2011

P U B L I S H E R ’ S R E V I E W

PUBLISHER’S REVIEW Despite increasing imports, potential threat of Chinese competition and non-attractive industry’s ratios (5,35x Debt-to-EBITDA average ratio for instance) Brazilian footwear industry is growing and presents excellent acquisition opportunities. Sector averages suffered significant influence of the results of Vulcabrás Azaléia’s, which represents almost 12% of sector revenues. In this section we’ve pointed our opinion on companies we’ve analyzed. Full companies information is available along this same report.

BUY AND BUILD OPPORTUNITIES

Usaflex Private Company Very high growth, regular margins, high Debt-to-EBITDA, liquidity concerns Company sales grew from BRL 139m to BRL 245m from 2009 to 2011. Its EBITDA margin suffered a bit, going from 15,6% to 12,1%, however still keeping it high if compared to the sector (7,8% average). Liquidity is a concern and debt is starting to become. General Liquidity Ratio is 1,33, pretty low if compared to the sector’s 2,3. Debt-to-EBITDA reaches 3,39x, which is not catastrophic but demonstrate financial needs. Financial expenses are troubling its Income Statement. Great acquisition opportunity.

LEVERAGED BUY-OUT (LBO) OPPORTUNITIES

Dakota Private Company Growing, very high margins, low Debt-to-EBITDA From 2009 to 2011 its EBITDA has almost tripled, growing from BRL 7,8m to BRL 20m, however its short term liquidity ratios had suffered a bit. Its Current Ratio went from 6,76 to 4,55 (industry achieved 2,65 in 2011) in the same period and Cash Ratio from 1,25 to 0,53. Its EBITDA in 2011 was of 24,1%, against industry’s 7,8%., and Debt-to-EBITDA was of 0,5x, against industry’s 5,35x.

Low debt, high margins and considerable growth seem like an interesting combination for an LBO.

Calçados Beira-Rio Private Company Very high growth, regular margins, low Debt-to-EBITDA Its revenues almost doubled from 2009 to 2011, going from BRL 525m to BRL 957m. EBITDA margin rose to 17,5% in 2010 and decreased back to 14,0% in 2011. Short term liquidity worsened with Cash Ratio going from 0,53 to 0,42 and Current Ratio going from 3,87 to 3,41. However, Debt-to-EBITDA remained low (1,37x in 2011 against sector’s 5,35x). Might be an opportunity of acquiring a good company through leverage. Going public to balance the debt afterwards might also be an option.

Grendene Public Company Stable sales, regular EBITDA growth, high margins, low Debt-to-EBITDA Sales remained steady from 2009 to 2011, however profit margin and EBITDA grew 12% and 21% respectively. Debt-to-EBITDA is on 1,13. Apart from being a public company, has good LBO characteristics and could be an interesting public-to-private transaction.

A. Grings (Piccadilly) Private Company Status: High growth, high margins, low Debt-to-EBITDA Revenues went from BRL 186m to BRL 300m from 2009 to 2011, while EBITDA margin went from 10% to 15%. Liquidity seems controlled. Might be a good opportunity of LBO.

Calçados Jacob Private Company High growth, growing EBITDA and profit, low leverage Revenues grew 63% from 2009 to 2011, EBITDA margins went from -4% to 8,4%. Debt is controlled (1,5x EBITDA). Apparently nice ingredients for an LBO.

However, since EBITDA is not a superstar (industry is at 7,8%, with Vulcabrás Azaléia pushing it down), might be an opportunity for a blended LBO/Turn Around strategy.

TURN AROUND OPPORTUNITIES

Cambuci Public company Growing, regular margins, high Debt-to-EBITDA The company’s revenues grew 25% from 2009 to 2011, however profit margins went exponentially down, together with its EBITDA. It’s Debt-to-EBITDA ratio is pretty high, reaching 9x and its Debt Ratio is 104%, against a 43% industry average. Despite this scenario, its EBITDA and profit margins are still over average. In case its debt liquidated, company’s profit would increase from 1,5% to 7,5%, also creating a positive impact on company value.

DISTRESSED ASSETS

Vulcabrás Azaléia Public Company Steady sales, negative margins, high leverage From 2009 to 2011 revenues were steady, margins went down, leverage rose. Negative EBITDA and considerable debt. We see it as a distressed asset. Might be an opportunity for identifying worse performing divisions, liquidating them and trying to pull a turn around.

I N D U S T R Y ’ s I N F O R M A T I O N

INDUSTRY’s STATISTICS

Source: Abicalçados 2011


10.233,20 9.485,40

12.345,30 12.994,70

-

2.000,00

4.000,00

6.000,00

8.000,00

10.000,00

12.000,00

14.000,00

2008 2009 2010 2011

Industry's Revenues in millions of USD

12,54 11,66 13,81

15,86

-

5,00

10,00

15,00

20,00

2008 2009 2010 2011

Average price for a pair of shoes USD



83,40 80,80 88,20 81,1

232,30 238,20 252,70 237,5

439,60 436,00 487,40

433,9

60,70 58,60 65,60

66,5

-

100,00

200,00

300,00

400,00

500,00

600,00

700,00

800,00

900,00

1.000,00

2008 2009 2010 2011

Production (by type) in millions of pairs

Shoes made of other materials

Plastic/Rubber Shoes

Leather Shoes

Sports Shoes

1.574

1.064 1.183

868

-

200

400

600

800

1.000

1.200

1.400

1.600

1.800

2008 2009 2010 2011

Trade Balance millions of USD

Source: Klooks Brazilian Shoes Research 2011


14,3% 15,3%

7,8%

0,0%

5,0%

10,0%

15,0%

20,0%

2.009 2.010 2.011

Industry's EBITDA Margin

36,6%

37,6%

34,7%

33,0%

33,5%

34,0%

34,5%

35,0%

35,5%

36,0%

36,5%

37,0%

37,5%

38,0%

2009 2010 2011

Industry's Gross Margin


INDUSTRY RATIOS


42%

40%

43%

39% 39% 40% 40% 41% 41% 42% 42% 43% 43% 44%

2009 2010 2011

Índustry's Debt Ratio

Return Rat ios 2009 2010 2011 EBITDA Margin 14,3% 15,3% 7,8% Gross Margin 36,6% 37,6% 34,7% Profit Margin 5,2% 7,8% 1,5% Return on Assets (ROA) 5,36% 8,37% 1,59% Return on Capital Employed (ROCE) 16,2% 18,5% 9,1% Return on Equity (ROE) 9,3% 14,1% 2,8%

E f f ic iency Rat ios 2009 2010 2011 Inventory Turnover 9,7 8,8 7,9 Accounts Receivable Turnover 3,3 3,7 3,5 Assets Turnover 1,0 1,1 1,0

L iqu id i ty Rat ios 2009 2010 2011 Cash Ratio 0,82 0,98 0,87 Current Ratio 2,72 2,71 2,65 Quick Ratio 2,29 2,24 2,16 General Liquidity Ratio 2,35 2,46 2,30

Debt Rat ios 2009 2010 2011 Debt Ratio 43% 41% 43% Debt-to-EBITDA 2,90 2,46 5,35

C o m p a n i e s I N F O R M A T I O N

VULCABRÁS AZALÉIA Shoe design, manufacturing and branding Specialty: sports shoes, women and men leather shoes, rubber sandals Jundiaí - SP

GENERAL INFORMATION Established in Jundiaí, in the countryside of the state of São Paulo, Vulcabrás Azaléia self names itself as the largest Brazilian company in the sector of sports and women's shoes, and sports clothing, counting with the following brands: Azaléia, AZ, Dijean, Funny, Opanka, OLK, Olympikus, Reebok and Vulcabras. Foundation Date: 01/07/1966

Address: AV ANTONIO F OZANAM, 1440, DA GRAMA - Jundiaí (SP) CNPJ: 50.926.955/0001-42

Company type: Public Auditing: KPMG

Information source: CVM and Klooks Files

BRANDS

MAIN EXECUTIVES Milton Cardoso dos Santos Filho

CEO

Ademir Anildo Dreger

CTO Edivaldo Rogerio de Brito

CFO

Eduardo Pereira Lara

COO Flavio de Carvalho Bento

CIO

Marco Antonio Sa Martins

COO - Argentina Pedro Bartelle

CMO

FINANCIAL RATIOS

Return Rat ios 2009 2010 2011 Industry

2011 EBITDA Margin 18,0% 14,8% -15,6% 7,8% Profit Margin 4,7% 7,2% -20,7% 1,5% Return on Assets (ROA) 4,64% 8,76% -20,44% 1,6% Return on Capital Employed (ROCE) 24,0% 19,3% -27,0% 9,1% Return on Equity (ROE) 16,7% 26,7% -148,5% 2,8%

E f f ic iency Rat ios 2009 2010 2011

Industry 2011

Inventory Turnover 10,1 8,7 5,6 7,9 Accounts Receivable Turnover 2,9 3,6 3,5 3,5 Assets Turnover 1,0 1,2 1,0 1,0

L iqu id i ty Rat ios 2009 2010 2011

Industry 2011

Cash Ratio 0,15 0,08 0,04 0,87 Current Ratio 1,51 1,50 1,27 2,65 Quick Ratio 1,26 1,14 0,86 2,16 General Liquidity Ratio 1,38 1,49 1,16 2,30

Debt Rat ios 2009 2010 2011

Industry 2011

Debt Ratio 72% 67% 86% 43%

18,0% 14,8%

-15,6% 2009 2010 2011

EBITDA Margin

72% 67% 86%

2009 2010 2011

Debt Ratio

INCOME STATEMENT

INCOME STATEMENT (thousands of BRL R$)

2009 2010 2011

Net Revenues 1 .597.101 1 .953.133 1 .529.200 Cost of Goods Sold (1.096.932) (1.351.390) (1.319.900)

Gross Prof i t 500.169 601 .743 209.300 Expenses and other revenues (265.035) (412.045) (448.600)

Sales (253.691) (314.663) (349.400) General and Administration (140.174) (136.523) (112.100) Other 128.830 39.141 12.900

Equity Income - - - EBIT 235.134 189.698 (239.300)

Financial Earnings/Losses (103.369) (76.959) (109.800) EBT 131 .765 1 12 .739 (349.100)

Income Tax (6.508) (2.084) 33.000 Deferred Income Tax 11.432 10.303 - Non recurrent Revenues/Expenses (62.054) 20.261 -

Prof i t /Loss 74.635 141 .219 (316.100) EBITDA 7.816 19. 170 20.930

1.597.101 1.953.133 1.529.200

2009 2010 2011

Net Revenues Thousands BRL R$

BALANCE SHEET Balance Sheet (thousands of BRL R$)

2009 2010 2011

ASSETS 1 .607.871 1 .612.649 1 .546.400 Current Assets 949.777 941.499 840.800

Cash 96.801 50.986 27.300 Accounts receivable 555.007 541.116 435.600 Tax Credits 30.821 34.416 26.000 Inventories 157.553 224.414 272.400 Others 109.595 90.567 79.500

Non-current Assets 658.094 671.150 705.600 Long term 70.669 73.606 109.700 Investments 24.408 22.669 24.400 Permanent 286.444 334.640 339.400 Patents, trademarks and goodwill 276.573 240.235 232.100

L IABIL IT IES 1 . 161 .790 1 .083.127 1 .333.500 Current Liabilities 627.512 628.625 659.900

Accounts Payable 159.529 123.024 89.200 Loans 187.965 365.841 455.300 Labor Liabilities Payable 58.595 70.816 67.000 Current Tax Payable 23.299 14.523 12.200 Others 198.124 54.421 36.200

Non-current Liabilities 534.278 454.502 673.600 Loans 444.931 383.374 615.400 Deferred Tax 2.835 2.404 1.300 Provisions 33.215 28.088 4.800 Others 53.297 40.636 52.100

Stockholders' Equity 446.081 529.522 212.900 Capital Stock 200.000 208.597 208.600 Revaluation Reserve 19.571 17.983 16.600 Earnings Reserve 225.540 310.499 (4.200) Retained Earnings - - - Others 970 (7.557) (8.100)

1.607.871 1.612.649 1.546.400

1.161.790 1.083.127 1.333.500

446.081 529.522 212.900

2009 2010 2011

In thousands of BRL R$

ASSETS LIABILITIES STOCKHOLDERS' EQUITY

CURRENT ASSETS

27%

NON-CURRENT ASSETS

23%

CURRENT LIABILITIES

21%

NON-CURRENT LIABILITIES

22%

STOCKHOLDERS' EQUITY

7%

Alpargatas s.a. Shoe design, manufacturing and branding Specialty: sports shoes, men and women leather shoes, rubber sandals São Paulo - SP

GENERAL INFORMATION Founded in 1907, with the original name of Fábrica Brasileira de Alpargatas e Calçados, by a scottish named Robert Fraser together with an English manufacturer. Prior to that, Robert Fraser had founded factories of Alpargatas" (south american type of sandals) in Argentina and Uruguay. In Brazil, operations have begun in the neibourhood of Mooca, in the city of São Paulo. In 1909 the company found success thanks to the use of their sandals in the coffee crops. In the 30s the company control has been passed to the Argentinian enterprise and in 1982 it became a company controlled by the Camargo Correa Group. In 2006 Alpargatas Brasil acquired 60% of Alpargatas Argentina (former controller) and became the largest shoes group in South America. Foundation: 1907 Address: R FUNCHAL, 160, 7 ANDAR, VILA OLIMPIA CNPJ: 61.079.117/0001-05 Type: Public Auditing: Deloitte Touche Tohmatsu Auditores Independentes Information source: CVM and Klooks Files

BRANDS

MAIN EXECUTIVES Márcio Garcia de Souza Chairman Márcio Luiz Simões Utsch CEO Adalberto Fernandes Granjo Director Carla Schmitzberger Director Fabio Leite de Souza Director Fernando Beer Director Javier Goni Director Marcelo Turri Director Jose Roberto Lettiere Director Marcia Costa Director Rogerio Bastos Shimizu Director

FINANCIAL RATIOS


2011 EBITDA Margin 11,4% 16,8% 14,2% 7,8% Profit Margin 6,4% 13,9% 12,0% 1,5% Return on Assets (ROA) 6,75% 13,75% 12,65% 1,6% Return on Capital Employed (ROCE) 10,7% 19,6% 17,6% 9,1% Return on Equity (ROE) 11,0% 23,0% 20,7% 2,8%


Industry 2011



Industry 2011


Debt Rat ios 2009 2010 2011

Industry 2011

Debt Ratio 38% 40% 39% 43%

11,4% 16,8% 14,2%

2009 2010 2011

EBITDA Margin

38% 40%

39%

2009 2010 2011

Debt Ratio

INCOME STATEMENT

INCOME STATEMENT (thousands of BRL R$)

2009 2010 2011

Net Revenues 1 .927.021 2.231 .875 2.574.700 Cost of Goods Sold (1.096.077) (1.213.783) (1.420.772)

Gross Prof i t 830.944 1 .018.092 1 . 153.928 Expenses and other revenues (658.170) (684.645) (836.456)

Sales (506.192) (539.403) (663.238) General and Administration (111.247) (120.391) (144.194) Other (40.731) (24.851) (29.024)

Equity Income (18.420) (9.222) (5.657) EBIT 154.354 324.225 311 .815

Financial Earnings/Losses (28.091) 8.958 29.049 EBT 126.263 333.183 340.864

Income Tax (5.558) (25.972) (31.797) Non recurrent Revenues/Expenses 3.241 3.241

Prof i t /Loss 123.946 310.452 309.067 EBITDA 220.057 374.996 365.850

1.927.021 2.231.875 2.574.700

2009 2010 2011

Net Revenues In thousands of BRL R$


2009 2010 2011

ASSETS 1 .836.304

2.257.535

2.442.554 Current Assets 1.012.326 1.457.838 1.609.539


Non-current Assets 823.978 799.697 833.015 Long term 144.843 158.385 153.175 Investments 91.851 77.338 74.462 Permanent 328.086 301.520 341.980 Patents, trademarks and goodwill 259.198 262.454 263.398

L IABIL IT IES 1 .836.304

2.257.535

2.442.554 Current Liabilities 390.733 606.821 666.299

Accounts Payable 115.625 212.777 297.150 Loans 109.345 226.371 180.077 Labor Liabilities Payable 68.014 88.021 98.897 Current Tax Payable 20.395 22.114 15.515 Provisions 8.055 8.847 11.436

Others 69.299 48.691 63.224 Non-current Liabilities 315.599 302.641 286.396 Loans 86.909 69.589 55.856 Provisions 29.202 30.784 26.245 Others 199.488 202.268 204.295

Stockholders' Equity 1.129.972 1.348.073 1.489.859 Capital Stock 391.804 441.171 518.922 Revaluation Reserve 146.134 144.513 126.514 Earnings Reserve 558.970 757.956 865.824 Others 33.064 4.433 (21.401)

GRENDENE s.a. Shoe design, manufacturing and branding Specialty: plastic shoes São Paulo - SP

GENERAL INFORMATION Grendene S.A. is a brazilian manufacturer of specialty shoes made of PVC and EVA Grendene S. A. é um empresa brasileira de fabricação de calçados feitos em PVC e EVA. It was founded in the city of Farroupilha-RS in the 25th of Febrary of 1971. Now a days its production headquarter is located in the city of Sobral-CE and its administration is kept in Farroupilha-RS. In the 29th of October of 2004 the enterprise became public. Foundation: 25/02/1971 Address: AV PEDRO GRENDENE, 131, A, VOLTA GRANDE CNPJ: 89.850.341/0001-60 Company Type: Public Auditing: Ernst & Young Terco Information source: CVM and Klooks Files

BRANDS

MAIN EXECUTIVES

Alexandre Grendede Bartelle

Diretor Presidente Pedro Grendene Bartelle

Diretor Vice Presidente

Francisco Olinto Velo Schmitt

Diretor de Relações com Investidores Gelson Luis Rostirolla

Diretor Financeiro

Rudimar Dall’Onder

Diretor Industrial e Comercial

FINANCIAL RATIOS




Industry 2011



Industry 2011


Debt Rat ios 2009 2010 2011

Industry 2011

Debt Ratio 17% 16% 12% 43%

INCOME STATEMENT INCOME STATEMENT (thousands of BRL R$)

2009 2010 2011

Net Revenues 1 .455.757 1 .604.507 1 .482.636 Cost of Goods Sold (889.711) (953.261) (840.497)

Gross Prof i t 566.046 651 .246 642.139 Expenses and other revenues (413.862) (442.833) (454.846)

Sales (356.275) (377.010) (396.096) General and Administration (58.977) (61.878) (61.177) Other 1.390 (3.945) 2.427

Equity Income - - - EBIT 152.184 208.413 187.293

Financial Earnings/Losses 135.624 122.469 153.003 EBT 287.808 330.882 340.296

Income Tax (15.707) (18.415) (34.845) Prof i t /Loss 272.101 312.467 305.451 EBITDA 178.491 236.586 216.210


2009 2010 2011

ASSETS 1 .767.165 1 .998.281 2.045.624 Current Assets 1.558.720 1.786.708 1.815.815

Cash 794.359 1.030.726 915.580 Accounts receivable 581.689 560.579 663.852 Tax Credits 20.421 18.863 23.263 Inventories 148.571 149.036 144.112 Others 13.680 27.504 69.008

Non-current Assets 208.445 211.573 229.809 Long term 15.525 15.483 23.294 Investments 873 877 1.670 Permanent 179.638 181.828 191.706 Patents, trademarks and goodwill 12.409 13.385 13.139

L IABIL IT IES 1 .767.165 1 .998.281 2.045.624 Current Liabilities 267.977 305.849 229.549

Accounts Payable 40.009 31.687 27.011 Loans 107.587 166.500 97.551 Labor Liabilities Payable 63.888 53.352 38.592 Current Tax Payable 9.143 7.746 13.759 Provisions 1.303 1.103 1.003 Advances - - - Others 46.047 45.461 51.633

Non-current Liabilities 34.619 16.766 15.123 Loans 33.188 14.766 13.123 Provisions 1.300 2.000 2.000 Others 131 - -

Stockholders' Equity 1.464.569 1.675.666 1.800.952 Capital Stock 1.226.760 1.231.302 1.231.302 Capital Reserve 1.086 1.953 2.685 Earnings Reserve 230.870 449.557 568.743 Retained Earnings 10.622 - - Others (4.769) (7.146) (1.778)

CALÇADOS BEIRA-RIO S.A. Shoe design, manufacturing and branding Specialty: rubber sandals, children women shoes, leather and synthetic women shoes Novo Hamburgo - RS

GENERAL INFORMATION The company was founded in 1975, in the city of Igrejinha-RS. Now-a-days its administration headquarters is based in Novo Hamburgo-RS, and production facilities in Roca Sales, Sapiranga, Taquara, Osório, Mato Leitão, Novo Hamburgo and Teutônia. It is one of the largest shoes manufacturers in Brazil and its products are available in more than 60 different countries. Foundation: 24/01/1975 Address: R DOM PEDRO II, 367, CONJ 501, SAO JOAO - Porto Alegre (RS) CNPJ: 88.379.771/0001-82 Company Type: Private Auditing: Rokembach + Lahm, Villanova, Gais e Cia Auditores Information source: Diário Oficial do Estado do Rio Grande do Sul and Klooks files

MAIN EXECUTIVES Clovis Moacir Gruhlke

CFO

Eunice Cristina da Silva Moser

Accountant

FINANCIAL RATIOS




Industry 2011



Industry 2011


Debt Rat ios 2009 2010 2011

Industry 2011

Debt Ratio 38% 40% 40% 43%

INCOME STATEMENT Income Statement thousands of BRL R$ 2009 2010 2011

Net Revenues

525.123

775.887

957.496

Cost of Goods Sold (371.461)

(533.295) (681.563)

Gross Prof i t

153.662

242.592

275.933 Expenses and other revenues (85.404) (115.444) (152.381)

Sales (63.698) (90.793) (115.843) General and Administration (8.356) (12.531) (14.460) Other (13.350) (12.120) (22.078)

Equity Income 1.258 - - EBIT 69.516 127.148 123.552

Financial Earnings/Losses 2.997 454 2.411 EBT 72.513 127.602 125.963

Income Tax (23.124) (41.231) (42.205) Deferred Income Tax (4.296) (3.947) (7.374) Profit Sharing Program (4.439) (7.106) (8.843)

Prof i t /Loss

40.654 75.318 67.541

EBITDA 76.973 135.561 133.762

BALANCE SHEET Balance Sheet (thousands of BRL R$) 2009 2010 2011

ASSETS 271 .897 365.510 461 .572 Current Assets 196.029 264.845 342.002

Cash 26.924 8.073 42.247 Accounts receivable 133.856 204.202 264.942 Tax Credits 1.625 981 1.721 Inventories 30.586 53.441 41.145 Others 3.038 (1.852) (8.053)

Non-current Assets 75.868 100.665 119.570 Long term 11.764 18.800 25.638 Investments 5.902 68 68 Permanent 57.472 80.618 92.846 Patents, trademarks and goodwill 730 1.179 1.018

L IABIL IT IES 271 .897 365.510 461 .572 Current Liabilities 50.668 82.779 100.243

Accounts Payable 5.602 12.245 10.925 Loans 5.193 6.209 8.597 Labor Liabilities Payable 10.077 - - Current Tax Payable 4.100 17.471 26.960 Provisions 576 705 791 Interests on own capital 11.536 24.552 28.090 Others 13.584 21.597 24.880

Non-current Liabilities 52.189 61.721 83.434 Loans 4.277 4.105 2.966 Current Tax Payable 8.846 12.000 19.229 Provisions 24.647 28.147 45.718 Others 14.419 17.469 15.521

Stockholders' Equity 169.040 221.010 277.895 Capital Stock 85.000 95.000 120.000 Capital Reserve 21 21 21 Earnings Reserve 120.929 168.709 200.594 Treasury Shares (36.910) (42.720) (42.720)

CAMBUCI S.A. PENALTY Shoe design, manufacturing and branding Specialty: sports shoes São Paulo - SP

GENERAL INFORMATION One of the most importante manufacturers of sports products in the country, owner of the brands Penalty and Stadium. The company is already established in São Paulo, Paraíba, Bahia, Argentina, Chile, Paraguay, China and Spain. Penalty is a sports materials brand started in 1970 in the city of São Paulo and manufactures shoes, balls, accessories, and other products. Foundation: 11/07/1966

Address: AV PEDROSO DE MORAIS, 1553, 3 AN - CJ 3 E 4 EDIFICIO CAPITAL PLAZA, PINHEIROS - São Paulo (SP) CNPJ: 61.088.894/0001-08

Company Type: Public Auditing: GF Auditores Independentes

Information source: Diário Oficial do Estado de São Paulo and Klooks files

MAIN EXECUTIVES

Roberto Estefano

President and IR Director

Eduardo Estefano Filho

Director

Alexandre Estefano

Director of Internationl Operations

Marcelo Kolanian

Supply Director

T.A. STAR

FINANCIAL RATIOS




Industry 2011



Industry 2011


Debt Rat ios 2009 2010 2011

Industry 2011

Debt Ratio 102% 89% 104% 43%

INCOME STATEMENT Income Statement thousands of BRL R$

2009 2010 2011

Net Revenues 222.921 247.758 278.773 Cost of Goods Sold (131.708) (142.210) (155.669)

Gross Prof i t 91 .213 105.548 123.104 Expenses and other revenues (4.733) (83.541) (102.690)


Equity Income (20) 296 - EBIT 86.460 22.303 20.414

Financial Earnings/Losses (16.830) (12.583) (14.126) EBT 69.630 9.720 6.288

Income Tax - (271) 271 Deferred Income Tax - - - Non recurrent Revenues/Expenses 108 48 164

Prof i t /Loss 69.738 9.497 6.723 EBITDA 84.829 28.042 26.206


2009 2010 2011

ASSETS 271 .897 365.510 461 .572 Current Assets 196.029 264.845 342.002

Cash 26.924 8.073 42.247 Accounts receivable 133.856 204.202 264.942 Tax Credits 1.625 981 1.721 Inventories 30.586 53.441 41.145 Others 3.038 (1.852) (8.053)

Non-current Assets 75.868 100.665 119.570 Long term 11.764 18.800 25.638 Investments 5.902 68 68 Permanent 57.472 80.618 92.846 Patents, trademarks and goodwill 730 1.179 1.018

L IABIL IT IES 257.478 348.041 446.051 Current Liabilities 50.668 82.779 100.243

Accounts Payable 5.602 12.245 10.925 Loans 5.193 6.209 8.597 Labor Liabilities Payable 10.077 - - Current Tax Payable 4.100 17.471 26.960 Provisions 576 705 791 Interests on own capital 11.536 24.552 28.090 Others 13.584 21.597 24.880

Non-current Liabilities 37.770 44.252 67.913 Loans 4.277 4.105 2.966 Current Tax Payable 8.846 12.000 19.229 Provisions 24.647 28.147 45.718

Stockholders' Equity 169.040 221.010 277.895 Capital Stock 85.000 95.000 120.000 Capital Reserve 21 21 21 Earnings Reserve 120.929 168.709 200.594 Treasury Shares (36.910) (42.720) (42.720)

A. GRINGS S.A. PICCADILLY Shoe design, manufacturing and branding Specialty: synthetic materials shoes Igrejinha - RS

GENERAL INFORMATION 56 years, 5 manufacturing plants (all in Rio Grande do Sul state), and around 4 thousand employees. Its main brand, Piccadilly, has presence in 90 countries and more than 7 thousand employees. Its main brand, Piccadilly, is present in 90 countries and more than 7 thousand stores. Piccadilly has 22 exclusive stores: 10 in Venezuela, 8 in Kuwait, 2 in Miami, 1 in Peru and 1 in Guadalupe. Foundation: 23/09/1966

Address: R ERNESTO DORNELES, 577, 595, CENTRO - Igrejinha (RS) CNPJ: 97.755.177/0001-30

Company Type: Private Auditing: Schimitt e Auditores Associados

Information source: Diário Oficial do Estado do Rio Grande do Sul and Klooks files

MAIN EXECUTIVES

Paulo Grings

CEO

Adair Grings

CFO

Juliano Konzen

Accountant

Paulo Grings

CEO

FINANCIAL RATIOS




Industry 2011



Industry 2011


Debt Rat ios 2009 2010 2011

Industry 2011

Debt Ratio 39% 35% 31% 43%

INCOME STATEMENT Income Statement (thousands of BRL R$)

2009 2010 2011


Gross Prof i t 62.821 80.373 1 12 . 107 Expenses and other revenues (49.156) (47.073) (69.632)

Sales (37.137) (41.388) (54.197) General and Administration (9.445) (10.200) (11.930) Other (2.573) 4.515 (3.504)

Equity Income 3.030 58 (1.011) EBIT 16.695 33.358 41 .464

Financial Earnings/Losses (2.644) (1.906) 708 EBT 14.050 31 .452 42.172

Income Tax (2.912) (8.250) (13.068) Deferred Income Tax - - - Non recurrent Revenues/Expenses - - -

Prof i t /Loss 1 1 . 138 23.202 29.104 EBITDA 19.582 35.990 44.582


2009 2010 2011

ASSETS 1 15.620 140.434 165.195 Current Assets 91.563 116.456 136.163


Non-current Assets 24.057 23.977 29.031 Long term 4.070 4.179 5.253 Investments 3.292 2.771 1.706 Permanent 16.322 16.733 21.679 Patents, trademarks and goodwill 373 294 392

L IABIL IT IES 1 15.620 140.434 165.195 Current Liabilities 31.041 42.753 36.667

Accounts Payable 14.008 20.878 17.899 Loans 6.667 10.586 6.474 Labor Liabilities Payable 1.866 2.293 1.888 Current Tax Payable 3.640 3.753 3.230 Others 4.861 5.244 7.175

Non-current Liabilities 13.550 6.406 14.907 Loans 556 - 7.429 Deferred Tax 4.401 592 1.715 Provisions 8.594 5.729 4.297 Others - 85 1.467

Stockholders' Equity 71.028 91.274 113.620 Capital Stock 45.000 45.000 47.400 Revaluation Reserve 26.028 46.274 66.220 Earnings Reserve - - - Retained Earnings - - - Others - - -

USAFLEX S.A. Shoe design, manufacturing and branding Specialty: leather shoes Igrejinha - RS

GENERAL INFORMATION Founded in 1994 and with operations since 1998 in the city of Igrejinha-RS focused specially in the manufacturing of women leather shoes. Since the year 2k operates under the brand "Usaflex". In 2010 the company became a "Sociedade Anonima" (equivalent of a corporation).


MAIN EXECUTIVES Samuel Fernando Lauck

CEO

Simone Groeler Kohlrawsch

Vice President

Foundation: 17/03/1994 Address: R MAL. DEODORO DA FONSECA, 530, ANEXO 01, BLOCO A,B

ANEXO 02, BLOCO B ANEXO C, CASA DE PEDRA - Igrejinha (RS) CNPJ: 86.900.925/0001-04

Company type: Private Audited: No

B’N’B STAR

FINANCIAL RATIOS




Industry 2011



Industry 2011


Debt Rat ios 2009 2010 2011

Industry 2011

Debt Ratio 76% 80% 75% 43%


2009 2010 2011


Gross Prof i t 42.488 47.552 60.546 Expenses and other revenues (21.745) (28.712) (34.367)

Sales (18.778) (26.137) (32.499) General and Administration (2.766) (3.839) (4.453) Other (200) 1.264 2.586

Equity Income - - - EBIT 20.743 18.840 26.179

Financial Earnings/Losses (4.616) (8.667) (8.416) EBT 16. 127 10. 173 17 .763

Income Tax (4.320) (2.819) (4.920) Deferred Income Tax - - - Non recurrent Revenues/Expenses - - -

Prof i t /Loss 1 1 .807 7.354 12.843 EBITDA 21 .766 22.221 29.726


2009 2010 2011

ASSETS 91 .539 128.124 134.049 Current Assets 75.929 107.685 106.411


Non-current Assets 15.611 20.440 27.638 Long term 521 185 193 Investments 180 180 180 Permanent 11.622 16.788 23.978 Patents, trademarks and goodwill 3.287 3.287 3.287

L IABIL IT IES 91 .539 128.124 134.049 Current Liabilities 49.386 67.160 70.287

Accounts Payable 9.797 13.681 13.056 Loans 33.884 45.772 48.727 Labor Liabilities Payable 743 1.162 1.894 Current Tax Payable 1.784 2.113 3.621 Others 3.178 4.433 2.989

Non-current Liabilities 20.079 35.746 30.369 Loans 16.080 31.708 26.252 Deferred Tax 3.968 3.986 4.065 Provisions - - - Others 30 52 52

Stockholders' Equity 22.075 25.218 33.393 Capital Stock 25.000 25.000 25.000 Revaluation Reserve 1.905 1.905 1.905 Earnings Reserve 12.660 15.802 23.978 Capital to Cash-in (17.500) (17.500) (17.500) Others 10 10 10

CALÇADOS JACOB S.A. KILDARE Shoe design, manufacturing and branding Specialty: leather shoes Novo Hamburgo - RS

GENERAL INFORMATION Shoes manufacturer established in the 20's in Novo Hamburgo (RS). Since the 70's has been working with "Kildare" as main brand. Address: R MARCILIO DIAS, 684, RIO BRANCO - Novo Hamburgo (RS) CNPJ: 91.669.242/0001-28

Company type: Private Audited: No


MAIN EXECUTIVES Eduardo Kurt Jacob

Director

Raul Gastão Klein

Director Mauricio Klein

Director

Elenice Flach Schuh

Accountant

FINANCIAL RATIOS


2011 EBITDA Margin -4,0% 4,8% 8,4% 7,8% Profit Margin -0,3% 1,5% 5,4% 1,5% Return on Assets (ROA) -0,22% 1,36% 5,27% 1,6% Return on Capital Employed (ROCE) -3,6% 4,2% 8,4% 9,1% Return on Equity (ROE) -0,2% 1,5% 6,0% 2,8%


Industry 2011



Industry 2011


Debt Rat ios 2009 2010 2011

Industry 2011

Debt Ratio 5% 10% 13% 43%


2009 2010 2011


Gross Prof i t 9.370 15. 1 14 19.218 Expenses and other revenues (10.760) (13.285) (15.268)

Sales (7.520) (9.109) (12.078) General and Administration (2.316) (2.730) (2.603) Other (924) (1.446) (587)

Equity Income (124) (5) 6 EBIT ( 1 .515) 1 .824 3.956

Financial Earnings/Losses 1.426 (662) (202) EBT (89) 1 . 162 3.754

Income Tax (9) (505) (903) Deferred Income Tax - - - Non recurrent Revenues/Expenses - - -

Prof i t /Loss (97) 657 2.851 EBITDA (1 .288) 2. 100 4.435

BALANCE SHEET Balance Sheet thousands of BRL R$

2009 2010 2011

ASSETS 45.029 48.256 54.067 Current Assets 40.687 44.677 50.550

Cash 1.346 527 858 Accounts receivable 14.191 19.011 22.883 Tax Credits 439 280 709 Inventories 4.860 3.931 4.843 Others 19.850 20.927 21.257

Non-current Assets 4.342 3.579 3.516 Long term 107 111 141 Investments 1.861 396 402 Permanent 2.260 2.957 2.859 Patents, trademarks and goodwill 114 114 114

L IABIL IT IES 45.029 48.256 54.067 Current Liabilities 2.452 4.937 6.763

Accounts Payable 735 904 1.193 Loans - - - Labor Liabilities Payable 302 318 232 Current Tax Payable 161 524 262 Others 1.254 3.190 5.075

Non-current Liabilities - - - Loans - - - Deferred Tax - - - Provisions - - - Others - - -

Stockholders' Equity 42.577 43.319 47.304 Capital Stock 31.095 31.605 33.260 Revaluation Reserve 455 186 186 Earnings Reserve 11.027 11.528 13.858 Retained Earnings - - - Others - - -

DAKOTA S.A. Shoe design, manufacturing and branding Specialty: leather shoes Novo Petrópolis - RS

GENERAL INFORMATION Foundation: 10/12/1976 Address: AV 15 DE NOVEMBRO, 3665, PIA - Nova Petrópolis (RS) CNPJ: 89.086.961/0001-74 Company type: Private Auditing: Confidor Auditores Associados Information source: Diário Oficial do Estado do Rio Grande do Sul and Klooks files

MAIN EXECUTIVES Romeu Lehnen

CEO

Ernani Volmir Kiekow

Director Bruno Waldemir Kuhn

Director

Lino Schneider

Director Gilberto Scholles

Director

Jorge Wanderlei Welter

Director

LBO STAR

FINANCIAL RATIOS




Industry 2011



Industry 2011


Debt Rat ios 2009 2010 2011

Industry 2011

Debt Ratio 8% 10% 8% 43%


2009 2010 2011

Net Revenues 64.622 101 .921 86.726 Cost of Goods Sold (52.623) (73.261) (66.156)

Gross Prof i t 12 .000 28.660 20.570 Expenses and other revenues (5.468) (10.752) (1.018)


Equity Income - - - EBIT 6.531 17 .908 19.553

Financial Earnings/Losses 922 419 1.321 EBT 7.454 18.328 20.874

Income Tax (615) (3.884) (1.658) Non recurrent Revenues/Expenses - - -

Prof i t /Loss 6.839 14.443 19.216

EBITDA 7.816 19. 170 20.930


2009 2010 2011

ASSETS 99.025 1 10.932 127.289 Current Assets 52.181 55.552 47.464

Cash 9.632 7.686 5.493 Advances 45 220 299 Accounts receivable 30.106 34.743 28.406 Tax Credits 1.635 903 498 Inventories 10.258 11.514 11.167 Others 505 485 1.601

Non-current Assets 46.844 55.379 79.825 Long term 2.780 1.357 195 Investments 34.044 43.264 64.249 Permanent 9.768 10.548 15.207 Patents, trademarks and goodwill 252 210 174

L IABIL IT IES 99.025 1 10.932 127.289 Current Liabilities 7.721 11.153 10.428

Accounts Payable 2.503 4.143 3.243 Loans 1.158 1.324 1.184 Labor Liabilities Payable 1.362 825 426 Provisions 290 375 336 Dividends 1.624 3.430 4.564 Others 784 1.055 676

Non-current Liabilities - - - Stockholders' Equity 91.304 99.778 116.861

Capital Stock 51.613 51.613 51.613 Capital Reserve 12 12 12 Earnings Reserve 40.879 53.516 70.599 Others (1.200) (5.363) (5.363)

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