| Apresentação do Roadshow

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Arezzo&Co Investor DayArezzo&Co Investor DayArezzo&Co Investor DayArezzo&Co Investor DaySourcing and LogisticsSourcing and LogisticsSourcing and LogisticsSourcing and Logistics

Márcio Jung,Sourcing Director

| Shoes Market

1. Global Industry

Note:DDP: delivered duty paidFOB: free on board

BRAZILLead time: 40 daysProduction (pairs): 894 miCost (w/ taxes ): US$ 19/pairCost (w/ taxes ): US$ 29/pair

ITALYLead time: 70 daysProduction (pairs): 202 miCost (FOB): US$ 26/pairCost (DDP): US$ 38/pair INDIA

Lead time: 160 daysProduction (pairs): 2.000 miCost (FOB): US$ 15/pairCost (DDP): US$ 23/pair

CHINALead time: 120 to 150 daysProduction (pairs): 10.000 miCost (FOB): US$ 16/pairCost (DDP): US$ 40/pair

VIETNALead time: 120 to 150 daysProduction (pairs): 682 miCost (FOB): US$ 15/pairCost (DDP): US$ 23/pair

Brazil is a major shoe producer with a competitive c ost of women leather shoes for the domestic market

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Source: Abilcalçados, Assintecal, Arezzo&Co3

2. Brazilian Industry

Brazilian Shoes Production (2010)

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South Region South Region

Vale dos Sinos(RS)

Production - # pairs (million) 302 ~187

Export - # pairs (million) 32 ~20

Export - (million USD) 733 ~455

Jobs (thousand) 130 ~81

Companies 3.400 ~2.000

Southeast RegionSoutheast

Region

Production - # pairs (million) 189

Export - # pairs (million) 9

Export - (million USD) 152

Jobs (thousand) 90

Companies 4.000

Northeast RegionNortheast

Region

Production - # pairs (million) 399

Export - # pairs (million) 102

Export - (million USD) 595

Jobs (thousand) 126

Companies 627

Main producer States

� Expertise in the production of women leather shoes

894million pairs

Other producer regions:

� Expertise in the production of sports shoes� Expertise in the production of men leather shoes

1Arezzo&Co mainly sources its products in the South of Brazil, the world’s largest footwear manufacturer cluster, specialized i n women leather shoes

Source: Abilcalçados, Assintecal, Arezzo&Co

Other667% Sports

8810%

Leather25328%

Rubber48755%

| Sourcing and Outsourcing Model

Constant involvement of Sourcing, R&D e Commercial departments ensure control of the entire chain

1. Sourcing and Logistics Cycle

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Solid sourcing model

� Knowledge of the cost structure of each SKU

� Flexibility to supply our product at multiple factories

and to maintain tight quality control

� Integration between engineering, R&D and Supply

Chain

Ability to keep up with new trends

� Sourcing of a large variety of SKU’s

� Specialized manufactures

Fast response to the market

� Agility in the development, production and delivery

of new products to the stores

Distribution Center

Transportation

Delivery at the stores

Production

Engineering

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Source: Arezzo&Co

Outsourcing-based model

22. Sourcing and Supply Chain Cycle

2,000Manufacturers

in Vale dos Sinos

60Active

manufacturers

100Accredited

manufacturers

Focus on engineering, R&D

and process auditing to assure

the quality

Sourcing model based on outsourcing, with constant monitoring of sourcing options

Source: Arezzo&Co

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Management of the entire supply chain

7 a 9Collections

Over 40 leather suppliers

Strong quality control and terms of the productive

process

Over 90 manufacturers

Other various inputs - jute, rubber,

synthetics, metal, etc

■ Low use of capital

■ Benefit from strong oscillation of the production

demand

■ Grow potential

Continuables Various SKUs

3. Strategic Inventories

■ Greater stock efficiency and better production costs

■ Products that repeat along various collections

■ Arezzo Classic and Schutz Essential

3% to 5% -continuable¹

30% to 35% -repetition of the model

65% to 70% -repetition of the construction (line)

Note:(1) Repetition of the same SKU

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Formação de estoques antecipados

■ Idle time at the factories

■ Opportunity to obtain discounts

■ Good results in the pilot projects

Suede Velvet Varnish Animal print

Lines

Colors

Materials

Models

Strategic inventories to reduce stock-out and obtai n economies of scale

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200.000

400.000

600.000

800.000

nov/10 jan/11 mar/11 may/11 jul/11 sep/11 nov/11

Production Idleness

Anticipation for the Winter Collection

Anticipation for the Winter Collection

Source: Arezzo&Co

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| Logistics and distribution

2. Distribution center

Simultaneous consolidation

and distribution in national scale

Located near the production chain and the South and

Southeast regions

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� Receiving: 100,000 units / day

� Stocking: 100,000 units / day

� Picking: 150,000 units / day

� Distribution: 200,000 units / day

� Replacement of the milky run strategy