Aumento de 10,5% da receita Bruta no 3T08

Transcription

(A free translation of the original in Portuguese)
Result of
2Q14 and 1H14
Growth of profit of 9.4% in 2Q14 with 18.2% of net margin
Sobral, July 24, 2014 – GRENDENE (BM&FBovespa: New Market - GRND3) discloses the
results for 2Q14 and 1H14. The information is presented on a consolidated basis under
International Financial Reporting Standards (IFRS).
Highlights of the results for 2Q14 and 1H14
Main financial and economic indicators
BM&FBOVESPA ticker:
GRND3
http://ri.grendene.com.br
Number of shares:
Common: 300,720,000
Price (6/30/2014):
R$ 13.81 per share
Market value:
R$ 4.2 billion
US$ 1.9 billion
Brazilian
conference call
7/25/2014 at 10:30 a.m.
Connect:
- Brazil:
+11-3193-1001 or
+11-2820-4001
International
conference call
7/25/2014 at 10:30 a.m.
(Simultaneous translation)
R$ million
Gross revenue
Domestic market
Exports
Net revenue
Cost of sales
Gross profit
Operating expenses
Ebit
Ebitda
Net finance result
Profit
Earnings per share (R$)
Volume (million pairs)
Domestic market
Exports
Average price (R$)
Domestic market
Exports
Margins %
Gross
Ebit
Ebitda
Net
2Q13
504.7
404.3
100.4
401.1
(230.6)
170.5
(114.9)
55.5
64.4
19.1
66.2
0.22
40.6
31.0
9.6
12.42
13.05
10.40
2Q13
42.5%
13.8%
16.1%
16.5%
2Q14
488.7
385.8
102.9
397.0
(237.1)
159.9
(121.1)
38.9
50.6
33.5
72.4
0.24
36.8
27.7
9.1
13.27
13.94
11.25
2Q14
Variation %
2Q14/2Q13
(3.2%)
(4.6%)
2.4%
(1.0%)
2.8%
(6.2%)
5.3%
(30.0%)
(21.4%)
76.0%
9.4%
9.5%
(9.4%)
(10.7%)
(5.4%)
6.8%
6.8%
8.2%
Variation
% (p.p.)
40.3%
9.8%
12.7%
18.2%
(2.2)
(4.0)
(3.4)
1.7
1H13
1,108.3
879.5
228.8
886.9
(496.6)
390.3
(245.1)
145.2
162.5
46.3
168.5
0.56
93.2
68.5
24.7
11.89
12.84
9.25
1H13
44.0%
16.4%
18.3%
19.0%
Variation %
1H14/1H13
1,104.2
(0.4%)
833.5
(5.2%)
270.7
18.3%
890.8
0.4%
(522.1)
5.1%
368.7
(5.5%)
(257.4)
5.0%
111.3
(23.4%)
133.6
(17.7%)
61.9
33.6%
168.9
0.2%
0.56
0.4%
83.5
(10.4%)
58.6
(14.4%)
24.9
0.8%
13.22
11.2%
14.22
10.7%
10.86
17.4%
1H14
1H14
41.4%
12.5%
15.0%
19.0%
Variation
% (p.p.)
(2.6)
(3.9)
(3.3)
-
Highlights of 2Q14 vs. 2Q13
Connect:
- USA and other
countries:
+1-786-924-6977
Decrease of 1% in net revenue.
Contacts:
Francisco Schmitt
Investor Relations Officer
dri@grendene.com.br
Increase of the net margin and decrease of the gross, EBIT and EBITDA
margins.
Telephone:
+55-54-2109-9022
Fax:
+55-54-2109-9991
Result of 2Q14 and 1H14
EBIT of R$ 38.9 million, 30.0% lower.
Profit of R$ 72.4 million, increase of 9.4%.
Distribution of dividends – R$ 29.9 million, 28% lower than in 2Q13 (R$ 41.5
million), shares traded ex-dividend as from August 1, 2014.
Leadership in footwear exports – Grendene maintains the leading position in
Brazilian footwear exports – 33.2% of Brazilian footwear exported in 2Q14
(36.4% in 2Q13).
Page 1 of 26
Management Discussion and Analysis
Gross Revenue, Net Revenue and Volumes
The economic indicators already disclosed have confirmed the impairment of the business activities in Brazil in
2014. The industrial production decreased in March and April in most categories. The data also shows unequivocal
impairment of sales in retail. In accordance with “Strategy Report” of BBI Equity Research (June 30, 2014), retail
sales did not show a reduction in two months consecutive since November 2008, in the culmination of the global
crisis.
The labor market is not exciting either. The creation of workstations in May, in accordance with data of the CAGED
was the worst result for the month in 22 years and the industry is decreasing the number of workers after
exhausting all alternatives: blanket vacations, paid leaves etc.
The trust indicators do not show expectations of improvement and the National Federation for the Distribution of
Automotive Vehicles (Fenabrave) disclosed a decrease of 17.2% in the licensing of vehicles in June of this year in
comparison with June 2013, which gives an idea of the harm made in the retail in this period due to the number of
holidays and days not worked.
In this scenario, we faced a rough challenge in the domestic market, which was partially offset with exports. Gross
revenue in the domestic market in 1H14 decreased 5.2% and increased 18.3% in the exports, which resulted in a
decrease of 0.4% in the total gross revenue of 1H14 vs. 1H13. Due to the environment and the fact that we have a
high comparison basis (growth of gross revenue of 29.8% in 1H12 and 22.0% in 1H13 compared, respectively, to
previous years), we consider this decrease insignificant.
The Gross Revenue obtained in 2Q14 of R$ 488.7 million, comprising R$ 385.8 million in the domestic market and
R$ 102.9 million in the international market was obtained with the sale of 27.7 million pairs in the domestic market
(decrease of 10.7% versus 2Q13) and 9.1 millions of exported pairs (decrease of 5.4% versus 2Q13) and prices of
R$ 13.94 in the domestic market (growth of 6.8%) and R$ 11.25 in the exported pairs (growth of 8.2%)
respectively, always compared to the same period of the previous year. In total, we have a decrease of 9.4% in the
number of pairs and a growth of 6.8% in the prices.
However, despite all the efforts to manage the trade-off between prices and volumes, the impacts on the increase
of costs occurred in 2H13 have not yet been offset and the net revenue decreased 1.0% and the Cost of Sales
(COGS) increased 2.8% in 2Q14, decreasing the gross margin in 2.2 p.p. from 42.5% in 2Q13 to 40.3% in 2Q14.
Due to the decrease of revenues, increase of salaries (the minimum wage grew 6.8% in January) and expenses in
units which are not yet operational (Subsidiary A3NP in the sector of furniture and Grendene U.K. – Galeria
Melissa in London), the operating expenses as increased from 28.7% of Net Revenue in 2Q13 to 30.5% of Net
Revenue in 2Q14, resulting in the decrease of EBIT of R$ 55.5 million in 2Q13 to R$ 38.9 million in 2Q14 (30% of
decrease) and margin decrease of 4.0 p.p. (from 13.8% in 2Q13 to 9.8% in 2Q14).
However, the increase of the market interest rate provided greater financial gains and the change in the Dividends
Policy provided lower taxation, which resulted in Profit 9.4% higher in 2Q14, even with all of the difficulties and the
high comparison basis already mentioned (growth of Profit of 61.4% in 2Q12 and more 11.2% in 2Q13). On the
other hand, the government was sensitized by the economic downturn and announced the maintenance of the
payroll charges relief, making it permanent, which benefits companies such as Grendene, which a great employer.
Currently, 56 different sectors are benefited by this measure, which, until then, would last up to the end of 2014.
The payroll charges relief of the companies was first adopted in December 2011 with the purpose to reduce the
Companies' labor costs and stimulate the economy, and in accordance with the original measure, it would be
terminated in December 2014.
Also as a way to stimulate exporting companies, the government announced the return of the Special System for
Refund of Tax Amounts to Exporting Companies (Reintegra), which will be permanent with variable rates from
0.3% to 3%. Reintegra is a Government program which returns to the companies which export manufactured items
a percentage of the revenue with international sales and offset them with direct taxes (up to the end of 2013,
Grendene had a rate of 3% in Reintegra).
As expected in the last quarter, the year had a difficult start with the downturn of the economy and an increased
comparison basis with 1H13, period in which EBIT grew 65.5% and the Profit grew 19.1% when compared
respectively with 1H12. In fact, the demand in the domestic market did not present growth, and the retail had few
working days (in 2Q14). Our higher costs not yet fully transferred to the prices were added to these difficulties.
Nevertheless, we finished 1H14 with gross revenue and profit in line with last year and falls of 2.6 p.p. in gross
margin and 23.4% in Ebit.
COGS in 1H14 exceeded the amount of 1H13 in 5.1%, despite the decrease in the total number of pairs sold of
10.4%, which may be explained by the increase in the COGS per pair from R$ 5.33 in 1H13 to R$ 6.25 in 1H14, an
increase of 17.3%. The various increases in raw material in 2H13 contributed to the growth of the unit cost the
same way as in 1Q14, as well as the fact that we were unable to adjust the costs at the same speed of the
Page 2 of 26
decrease of demand. On the other hand, part of the decrease in the volumes may be attributed to the
recomposition of prices.
Considering the market environment, or results were good. As mentioned at the beginning of the year, repeating
the results of 2013 would be a challenge, which we were able to overcome in 1H14. This does not mean we are
satisfied. We will not measure efforts to once again have the higher margins previously achieved.
The foundations which have guaranteed market share gains with good returns continue in place: the production in
scale of attractive products with high perceived value, strong brands and accessible prices produced at costs which
ensure profitability and distributed in and efficient manner. Between the external factors which affect the results, we
highlight the low dynamism in the economy, the persistent inflation and the uncertainties existing in an election
year.
With these results, the generation of cash from operations in 1H14 was R$ 402.2 million, 7.6% higher in the same
period of the previous year, in which R$ 152.8 million were used for the payment of dividends.
In 1H14 the foreign exchange effect was positive by R$ 31.1 million, whereas the gross export revenue increased
4.7% before considering the exchange effect and 18.3% after considering this effect vs. 1H13.
We still believe that, in this year, the domestic market must grow little and the foreign market must continue
contributing for the improvement of the margins.
In 2014, based on the first half, even with some growth in the foreign market, the total volumes must decrease.The
margins in 1H14 were worse than the same period of 2013, which should be repeated in 2H14. For the whole year,
the possible decrease of the margins will depend of the volumes in a market with weak demand and increase in
prices.
History shows that Grendene reacts quickly to the changes of market and we are mobilized to adjust the portfolio
and costs to the economic situation which was worse than initially expected for 1H14. Confirming our statements
made in prior years, we will keep our focus on strengthening our brands, achieving operational excellence,
consolidating the relationship with sales channels, and improving market share.
Changes in gross sales revenue from domestic market and exports,
due to volume, mix and average prices
(126.7)
80.6
1.8
9.0
1,073.1
31.1
1,104.2
R$ million
1,108.3
Gross
Volume
Average
Volume
Average
Gross
Exchange
Gross
revenue - Impact - DM price and impact - FM price and
revenue impact - FM revenue 1H13
mix impact mix impact - without
1H14
DM
FM
exchange
impact
Comparison of performance with targets:
Although we disclose the comparative amounts for each period for the purposes of follow-up of amounts
realized, we emphasize that the goals are established for full periods (full year).
Performance – Compound Annual Growth Rate (CAGR), in the second halves, from 2008 to 2014:
R$ million
Gross revenue
Y-o-Y variation
Profit
Y-o-Y variation
2Q08
286.9
R$ million
Advertising expenses
Participation % - Net operating
revenue
2Q08
19.8
9.1%
42.4
2Q09
371.7
29.6%
57.3
35.2%
2Q10
391.0
5.2%
38.0
(33.7%)
2Q11
307.2
(21.4%)
36.9
(3.1%)
2Q12
412.6
34.3%
59.5
61.4%
2Q13
504.7
22.3%
66.2
11.2%
2Q14
488.7
(3.2%)
72.4
9.4%
CAGR
9.3%
2Q09
19.8
6.7%
2Q10
19.9
6.5%
2Q11
20.0
8.2%
2Q12
28.5
8.6%
2Q13
26.7
6.6%
2Q14
26.2
6.6%
CAGR
4.7%
9.3%
We noticed that the Gross revenue in 2Q14 was the second best over the last 7 second quarters, lower than the
revenue of 2Q13, only. Profit was the higher obtained over the last 7 second quarters.
Page 3 of 26
Performance – Compound Annual Growth Rate (CAGR), in the first halves, from 2008 to 2014:
R$ million
Gross revenue
Y-o-Y variation
Profit
Y-o-Y variation
1H08
618.2
R$ million
Participation % - Net operating
revenue
1H08
37.2
7.7%
83.4
1H09
743.2
20.2%
121.6
20.3%
1H10
847.6
14.1%
84.9
(30.1%)
1H11
699.3
(17.5%)
100.4
18.2%
1H12
908.1
29.8%
141.5
41.0%
1H13
1,108.3
22.0%
168.5
19.1%
1H14
1,104.1
(0.4%)
168.9
0.2%
CAGR
10.1%
1H09
38.5
6.4%
1H10
38.3
5.6%
1H11
38.7
6.9%
1H12
58.4
8.0%
1H13
59.5
6.7%
1H14
52.5
5.9%
CAGR
5.9%
12.5%
When the first haves are analyzed, the aforementioned observation is also valid, that is, the gross revenue in 1H14
was the second best over the last 7 first halves, lower than the revenue of 1H13, only. Profit was the higher
obtained over the last 7 second halves.
These observations are clearer in the charts below:
Gross sales revenue
R$ million
Growth at a Compound Annual Growth Rate (CAGR) between
8% and 12%.
1.300
1.200
1.100
1.000
900
800
700
600
500
1.220
1.108
743
692
577
618
1H08
1H09
Guidance 8% a.a.
1.104
973
1.090
869
779
668
1H07
848
776
721
699
1H10
1H11
908
841
1H12
Guidance 12% a.a.
981
908
1H13
1H14
Realized
Profit
Growth at a Compound Annual Growth Rate (CAGR) between
12% and 15%.
193
200
R$ million
180
146
160
142
140
122
120
100
81
83
80
93
1H07
1H08
1H09
Guidance 12% a.a.
147
110
117
105
169
165
127
96
60
169
168
131
100
85
1H10
1H11
Guidance 15% a.a.
1H12
1H13
1H14
Realized
Page 4 of 26
The resilience in the results obtained confirm our expectations and reinforce our confidence in Grendene’s
business model, which encourages us to maintain the projection of our long-term targets for the period from 2008
through 2015, as follows:
Targets maintained for the period 2008-2015:

Gross revenue growth at a compound annual growth rate (CAGR) between 8% and 12%.

Profit growth at a compound annual growth rate (CAGR) between 12% and 15%.
 In this period Grendene aims at keeping advertising expenses at an average of 8% to 10% of net revenue.
We understand that during this period some years may result in higher growth rate and others with a lower growth
rate, but on average we intend to achieve these targets.
Reasons for maintaining the announced targets:
The market outlook in Brazil and abroad is still challenging, as expected and, in our opinion, it must not improve in
the short term. In the domestic market, after the soccer world cup, the election uncertainties remain. In the foreign
market, the recovery of the main markets has not yet been strong.
2Q14 was not surprising to us. The difficulties faced were the expected ones and the adjustments in this
environment keep on. Nevertheless, the results continue with positive trends and are within the expected range, in
comparison with the last 5 years (2008-2013) and also the last 7 first halves (1H08-1H14). This trend analysis in a
longer term evidences the high comparison basis which constitutes 1H13, which makes 1H14 seem worse than it
really is in a long-term context.
Every year our results have been better than the previous years. Sometimes a little better and others, much better.
In average, when the longer period is considered, we are able to maintain ourselves reasonably within the
projected range even facing many unexpected difficulties. In 1H14, it was not different.
For this year, we do not expect volume growth, but we still expect some growth in revenue and profit. When the
whole year is analyzed, it will be a challenge to maintain the last year margins, because we began the year with the
highest costs of 2H13 and with prices not fully aligned yet. We also must adjust our costs structure to the volumes
really demanded in this environment.
However, we are confident. In turbulent times, or growth always came and one of our characteristics is the agility of
adaptation. We believe in the potential of this market and, accordingly, we invest in the expansion of the capacity to
serve it.
Domestically, we will keep our focus on strengthening our brands, achieving operational excellence and gaining
market share and mainly on recovering margins.
Based on the performance presented, we believe we will achieve the goals proposed for the period 2008-2015.
Page 5 of 26
2Q14 Highlights:
Melissa keeps being revolutionary. It gains space in
the portfolio of Grendene and its relevance in sales
grows at the same time its concept is firmed in the
international market.
Facade of Galeria Melissa in
São Paulo
Internal environment
In June the collection of miniatures of Melissa most iconic and
best sold pieces, named Miniatures Design Collection was
launched, with the object to associate art, design, fashion and
architecture. In its first edition, it pays homage to the designers
and architects (and long-time collaborators): Campana Brothers,
Karim Rashid, Zaha Hadid and Gaetano Pesce, turning models of
the brand into decorative and collectible objects which fit in the
palm of our hands.
Miniatures Design Collection
Rider Meets Ausländer - Coachella 2014 - Rider in a partnership with the
Ausländer brand was one of the sponsors of the Pool Party that happened
during the first weekend of the Coachella, in Palm Springs, California, USA.
Coachella Valley Music and Arts Festival, or simply Coachella, is an annual
three-day music and art event, organized by Goldenvoice, a subsidiary of AEG
Live.
Cartago – Actor Malvino Salvador was the celebrity
chosen to represent the brand in the campaign of
Father's day.
Casa Ipanema has been a highlight in the opinion maker media, for housing the main
fashion, art, music and welfare news. Besides gathering the launches of Ipanema
Sandals, the place has been a collaborative space, with exposures, courses, workshops
and performances, always in synergy with the brand's philosophy to encourage the
constant search for the new.
CompulsArt
Exposure
Kátia Wille
Mana Bernardes
Ocupation
Page 6 of 26
In the women's line, actresses Juliana Paiva, Flávia Alessandra and Hanna Romanazzi were present in the
brands merchandising actions.
Juliana Paiva
Flávia Alessandra
Hanna Romanazzi
Grendene presented the Spring-Summer collection in the 46th edition of
the International Shoes and Accessories Fashion Event (Francal) from July
15 to 18, 2014, at Parque do Anhembi - São Paulo http://www.feirafrancal.com.br. In a space with more than 600 square
meters, it launched more than 60 models of the lines Ipanema, Grendha,
Zaxy, Grendene Kids, Rider, Cartago, Guga, Mormai and Bad Boy.
The participation of Grendene in fashion events is in line with its strategy to
strengthen its brands both in the domestic and international markets,
besides giving feedback to customers concerning the acceptance of the
models and the idea of the behavior of the market for future businesses.
Since its launch on April 7, 2014, the
furniture brand “TOG” has been
received with interest and attention by
both the Brazilian and international
presses. Vehicles such as Casa
Vogue, Revista Casa e Jardim, Folha de São Paulo and Estado
de São Paulo in Brazil, Economist.com and Wallpaper.com of the
United Kingdom, Architectural Digest of Spain, Liberation Next
and Maisonapart.com of France, La Repubblica, Designboom.com
and Corriere Della Sera of Italy, among others, highlight the
simple yet innovative concept of the brand to make design
accessible and with the possibility of customization.
Designers team: Sebastian Bergne, Dai
Sugasawa, Kim Colin & Sam Hecht, Nicola
Rapetti, Ambroise Maggiar, Jonathan Bui
Quang Da and Philippe Starck.
Page 7 of 26
Products launches
Awards:
Grendene was recognized as the Best Company in the Textile Sector in Brazil in 2013 in
the 41st edition of "Melhores e Maiores 2014 da Exame", being the 4th Brazilian Company in
General Liquidity and 22nd better dividend payer.
Clube Melissa, the franchise network of Grendene, establishes itself
as a sales channel.
Clube Melissa, the official network of Melissa brand stores, achieved
the Seal of Excellence in Franchising (SEF), in the Senior category.
The award is granted by the Ethics Commission of the Brazilian
Association of Franchising (ABF) and happens once a year, to
recognize the work of the franchiser, through analysis of the
franchisees.
Clube Melissa (Melissa Club): 129
stores at the end of the month of
June/2014.
The certification confirmed the excellence of the work developed at the
Melissa brand stores, throughout Brazil.
Page 8 of 26
Analysis of the operations for 2Q14 and 1H14
Gross revenue
High comparison basis of the 1H13 in conjunction with the slowdown of consumption in the domestic market
resulted in gross revenue in line with the previous year. The increase of the average prices was only enough to
offset the decrease of 10.4% in the volume of pairs.
The decrease of 9.7 million pairs in 1H14 compared to 1H13 must be considered in conjunction with the increase of
19.6 million pairs obtained in 1H13 (26.7% of growth) against 1H12 for a clearer view of the market share progress
in the various lines of shoes in which Grendene operates.
Total (DM + FM)
Total gross revenue (R$ thousands)
Volume (thousands of pairs)
Average price (R$)
2Q13
2Q14
504,714
40,648
12.42
488,745
36,829
13.27
Variation %
2Q14/2Q13
(3.2%)
(9.4%)
6.8%
1H13
1H14
1,108,285
93,208
11.89
1,104,161
83,544
13.22
504.7
488.7
40.6
36.8
2Q13
2Q14
2Q13
2Q14
Gross sales revenue (R$ MM)
Variation %
1H14/1H13
(0.4%)
(10.4%)
11.2%
Volume (MM of pairs)
12.42
13.27
2Q13
2Q14
Average price (R$)
Share in gross revenue
2Q13
19.9%
2Q14
21.1%
78.9%
80.1%
Domestic market
Exports
Domestic market
Share in sales volume
2Q13
23.8%
2Q14
24.8%
75.2%
76.2%
Domestic market
Exports
Exports
Domestic market
Exports
Page 9 of 26
1,108.3
1,104.2
93.2
83.5
1H13
1H14
1H13
1H14
Gross sales revenue (R$ MM)
Volume (MM of pairs)
11.89
13.22
1H13
1H14
Average price (R$)
1H14
1H13
20.6%
24.5%
75.5%
79.4%
Domestic market
Exports
Domestic market
1H13
Exports
1H14
26.5%
29.8%
70.2%
73.5%
Domestic market
Exports
Domestic market
Exports
Domestic market (DM):
The volume decrease in 1H14 occurred in the domestic market. We notice, however, that in the domestic market
we had the strongest growth in the previous year: growth of 32,9% in the volume of pairs in the comparison 1H13 x
1H12 – increase of 17 million pairs, establishing a high basis of comparison for 2014.
Domestic market
Average price (R$)
2Q13
404,256
30,986
13.05
2Q14
385,843
27,685
13.94
Variation %
2Q14/2Q13
(4.6%)
(10.7%)
6.8%
1H13
879,524
68,483
12.84
1H14
833,483
58,620
14.22
Variation %
1H14/1H13
(5.2%)
(14.4%)
10.7%
Page 10 of 26
due to volume, mix and average price
( 43.1)
R$ million
404.3
Gross revenue - 2Q13 Volume impact - DM
31.0
27.7
2Q13
2Q14
24.6
385.8
Average price and
mix impact - DM
Gross revenue - 2Q14
13.05
13.94
2Q13
2Q14
Volume DM (MM of pairs)
Average price DM (R$)
due to volume, mix and average price
(126.7)
R$ million
879.5
Gross revenue - 1H13 Volume impact - DM
68.5
58.6
1H13
1H14
80.6
833.5
Average price and
mix impact - DM
Gross revenue - 1H14
12.84
14.22
1H13
1H14
Volume DM (MM of pairs)
Average price DM (R$)
Foreign market (FM):
Growth in foreign market was favored by the more favorable exchange rate. In 2Q14, the exports revenue in U.S.
dollars decreased 4.9%, but in Brazilian Reais, it grew 2.4% in comparison with 2Q13.
Foreign market
Total gross revenue (US$ thousands)
Average price (R$)
Average price (US$)
2Q13
100,458
48,530
9,662
10.40
5.02
2Q14
102,902
46,150
9,144
11.25
5.05
Variation - %
2Q14/2Q13
2.4%
(4.9%)
(5.4%)
8.2%
0.6%
1H13
228,761
112,531
24,725
9.25
4.55
1H14
270,678
117,847
24,924
10.86
4.73
Variation - %
1H14/1H13
18.3%
4.7%
0.8%
17.4%
4.0%
Page 11 of 26
R$ million
Changes in gross sales revenue from export, due to volume, mix and
average price
0.5
100.4
(5.4)
Gross revenue
- 2Q13
Volume
impact - FM
102.9
7.4
95.6
Average price Gross revenue
Exchange
and mix
without exchange impact - FM
impact - FM
impact
Gross revenue
- 2Q14
US$ million
average price
48.5
(2.6)
0.2
46.1
Volume impact - FM
Average price and mix
impact - FM
9.7
9.1
10.40
11.25
2Q13
2Q14
2Q13
2Q14
FM Volume (MM of pairs)
Average price-FM (R$)
R$ million
average price
228.8
1.8
Gross revenue
- 1H13
Volume
impact - FM
9.0
239.6
Average price Gross revenue
and mix
without
impact - FM
exchange
impact - 1H13
31.1
270.7
Exchange
impact - FM
Gross revenue
- 1H14
average price
0.9
4.4
117,8
Impact volume - FM
Average price and mix
impact - FM
US$ million
112.5
Page 12 of 26
24.7
24.9
9.25
1H13
1H14
1H13
Volume FM (MM of pairs)
10.86
1H14
Average Price - FM (R$)
According to data from Foreign Trade Secretariat (SECEX)/Brazilian Footwear Industry Association
(ABICALÇADOS), Brazilian footwear exports in 1H14 vs. 1H13 decreased 2.6% in U.S. dollar and 8.2% in the
average price in U.S. dollars, while increasing 6.2% in the volume of pairs sold. In 1H14, Grendene grew in the
exports revenues 18.3% in reais and 4.7% in US$, 0.8% in volumes, and the average prices grew 17.4% in reais
and 4.0% in US dollars.
Grendene’s share in the Brazilian footwear exports, when comparing 1H14 vs.1H13 decreased 39.1% in volumes
of pairs (41.2% in 1H13) and increased to 22.6% in export revenue in dollars (21.0% in 1H13) , maintaining the
leading position in Brazilian footwear exports for the 12th consecutive year.
Net sales revenue:
R$ thousand
2Q13
2Q14
Gross revenue DM
Gross revenue FM
Total gross revenue
Returns and taxes on sales
Discounts granted to customers
Sales deductions
Net sales revenue
404,256
100,458
504,714
(77,636)
(25,965)
(103,601)
401,113
385,843
102,902
488,745
(73,064)
(18,661)
(91,725)
397,020
Variation %
2Q14/2Q13
(4.6%)
2.4%
(3.2%)
(5.9%)
(28.1%)
(11.5%)
(1.0%)
1H13
1H14
879,524
228,761
1,108,285
(166,065)
(55,300)
(221,365)
886,920
833,483
270,678
1,104,161
(167,718)
(45,635)
(213,353)
890,808
401.1
397.0
886.9
890.8
2Q13
2Q14
1H13
1H14
Net sales revenue (R$ MM)
Variation %
1H14/1H13
(5.2%)
18.3%
(0.4%)
1.0%
(17.5%)
(3.6%)
0.4%
Net sales revenue (R$ MM)
Cost of goods sold (COGS):
As in 1Q14, even with the decrease in the volumes sold of 9.4% in 2Q14, COGS grew 2.8% and in this quarter Net
revenue decreased 1%. COGS per pair grew 13.6%, an amount higher than the growth of the price per pair of
6.8%. The higher cost is due to two factors: the increase of various raw materials in the second half of 2013 and
the decrease of the volumes higher than expected, which led us to an insufficient adjustment in costs to the level of
production effectively occurred.
In the second quarter of each year, there is always an impact resulting from the increase in labor costs due to the
collective bargaining agreement in the municipality of Sobral, where most of our employees are located.
Page 13 of 26
In 1H14, the raw material costs presented, in total, a slight increase of 0,1% and labor costs increased 11.7%.
When converted to amounts per pair, the variations are even higher, reflecting the decrease of volumes.
R$ thousand
2Q13
Cost of sales
Cost of sales per pair (R$)
2Q14
230,644
5.67
237,074
6.44
Variation %
2Q14/2Q13
2.8%
13.6%
1H13
1H14
496,579
5.33
522,075
6.25
( 21.7)
28.1
237.1
COGS - 2Q13
Impact - Volume of
pairs
Unit cost increase
COGS - 2Q14
R$ million
230.6
Variation %
1H14/1H13
5.1%
17.3%
5.67
6.44
2Q13
2Q14
COGS per pair (R$)
(51.5)
77.0
522.1
COGS- 1H13
Impact - Volume of
pairs
Increase of unit cost
COGS - 1H14
R$ million
496.6
5.33
6.25
1H13
1H14
COGS per pair - R$
Page 14 of 26
The chart below shows the changes in market prices in dollar terms (according to ICIS-LOR), converted into
Brazilian reais, of Grendene's main raw materials, and the changes in Grendene's average cost per pair, showing
the behavior by pair for each quarter of 2013 and 2014.
Thousands of pairs
3Q13
4Q13
54,118
68,869
2Q13
40,648
5,5
5,0
4,5
4,0
3,5
3,0
2,5
2,0
1,5
5.86
5.67
1Q14
46,715
6.44
6.10
5.52
5.06
2Q14
36,829
7,00
5,60
4,20
2,80
R$ / per pair
1,40
Plastifying oils / metric ton. (FOB) - R$
PVC resin / metric ton. (CFR) - R$
Jun-14
May-14
Apr-14
Mar-14
Feb-14
Jan-14
Dec-13
Nov-13
Oct-13
Sep-13
Aug-13
Jul-13
Jun-13
May-13
Apr-13
Mar-13
Feb-13
0,00
Jan-13
R$ thousand / Metric ton.
1Q13
52,560
COGS / per pair - R$
Source: ICIS-LOR petrochemicals prices and Company’s quarterly data
Gross profit:
Gross profit decreased approximately R$ 11 million in each quarter of this year, resulting in a total decrease of
R$ 21.6 million in 1H14 vs. 1H13. In the first quarter, the gross margin decreased 3.0 p.p. and in the second
quarter 2.2 p.p. In total, 1H14 had a decrease of gross margin of 2.6 p.p. vs. 1H13.
R$ thousand
2Q13
Gross profit
% of net revenue
2Q14
170,469
42.5%
159,946
40.3%
Variation %
2Q14/2Q13
(6.2%)
(2.2 p.p.)
34.7%
39.0%
67.8
84.9
111.4
91.8
85.5
2Q07
2Q08
2Q09
2Q10
2Q11
37.8%
30.0%
35.0%
Gross profit (R$ MM)
1H13
1H14
390,341
44.0%
41.8%
368,733
41.4%
42.5%
40.3%
170.5
159.9
2Q13
2Q14
138.3
2Q12
Variation %
1H14/1H13
(5.5%)
(2.6 p.p.)
Gross margin (%)
Despite the difficulties, when we analyze the progress of gross margin over the 8 last second quarters, we notice
that in the last three years, we have been in another level with gross margin equal to or higher than 40%.
35.7%
35.1%
37.7%
162.6
169.8
226.3
206.8
204.9
1H07
1H08
1H09
1H10
1H11
30.4%
Gross profit (R$ MM)
36.6%
42.2%
44.0%
41.4%
390.3
368.7
1H13
1H14
306.7
1H12
Gross margin (%)
Page 15 of 26
Selling expenses:
The selling expenses did not reflect the decrease of the revenue basically due to the commercial expenses
incurred in the new subsidiary A3NP, which started the commercial effort in April and in Grendene U.K. where it is
in the process of implementation of a new Galeria Melissa.
R$ thousand
2Q13
Selling expenses
% of net revenue
Variation - %
2Q14/2Q13
5.7%
101,856
1.7 p.p.
25.7%
2Q14
96,403
24.0%
1H13
Variation - %
1H14/1H13
1.8%
213,570
0.3 p.p.
24.0%
1H14
209,861
23.7%
24.0%
25.7%
23.7%
24.0%
96.4
101.9
209.9
213.6
2Q13
2Q14
1H13
1H14
Sales expenses (R$ MM)
Sales expenses (R$ MM)
% of net revenue
% of net revenue
Advertising expenses:
Advertising expenses (included in selling expenses) remain in line with the Company’s strategy.
R$ thousand
2Q13
% of net revenue
Variation - %
2Q14/2Q13
(1.9%)
26,152
6.6%
2Q14
26,663
6.6%
1H13
59,549
6.7%
Variation - %
1H14/1H13
(11.8%)
52,502
(0.8 p.p.)
5.9%
1H14
6.6%
6.6%
6.7%
26.7
26.2
59.5
52.5
2Q13
2Q14
1H13
1H14
5.9%
Advertising (R$ MM)
Advertising (R$ MM)
% of net revenue
% of net revenue
General and administrative expenses (G&A):
The increase of the general and administrative expenses also reflects, besides the increases of salaries, the
expenses made in pre-operating units.
R$ thousand
G&A expenses
% of net revenue
2Q13
19,406
4.8%
2Q14
21,269
5.4%
Variation - %
2Q14/2Q13
9.6%
0.6 p.p.
1H13
37,424
4.2%
1H14
41,482
4.7%
Variation - %
1H14/1H13
10.8%
0.5 p.p.
Page 16 of 26
4.7%
4.2%
4.8%
5.4%
19.4
21.3
41.5
37.4
2Q13
2Q14
General and administrative expenses (R$
MM)
1H13
1H14
General and administrative expenses (R$
MM)
% of net revenue
% of net revenue
Ebit and Ebitda:
Ebit:
Ebit – earnings before interest and taxes – operating profit before finance result. The Company considers that, as it
has a large cash balance, which generates significant interest income, the profit from its operating activity is best
represented by Ebit.
The expressive increase of 72.3% in the Ebit of 2Q13 vs. 2Q12 establishes a high comparison basis for 2Q14.
13.8%
16.1%
9.8%
12.7%
55,5
64,4
38,9
2Q13
EBIT (R$ MM)
2Q14
50,6
2Q13
EBIT margin (%)
2Q14
EBITDA (R$ MM)
EBITDA margin (%)
18.3%
16.4%
15.0%
12.5%
145,2
1H13
EBIT (R$ MM)
Reconciliation of
EBIT/EBITDA*(R$ thousand)
Profit for the period:
Non-controlling interests
Taxes on profit
Finance result, net
EBIT
Depreciation and amortization
EBITDA
EBIT margin
EBITDA margin
162,5
133,6
111,3
1H14
1H13
EBIT margin (%)
EBITDA (R$ MM)
66,184
(182)
8,585
(19,055)
55,532
8,864
64,396
72,413
(2,041)
2,036
(33,531)
38,877
11,722
50,599
Variation - %
2Q14/2Q13
9.4%
1,021.4%
(76.3%)
76.0%
(30.0%)
32.2%
(21.4%)
13.8%
16.1%
9.8%
12.7%
(4.0 p.p.)
(3.4 p.p.)
2Q13
1H14
2Q14
EBITDA margin (%)
168,532
(287)
23,297
(46,299)
145,243
17,208
162,451
168,946
(3,569)
7,797
(61,862)
111,312
22,304
133,616
Variation - %
1H14/1H13
0.2%
1,143.6%
(66.5%)
33.6%
(23.4%)
29.6%
(17.7%)
16.4%
18.3%
12.5%
15.0%
(3.9 p.p.)
(3.3 p.p.)
1H13
1H14
* In accordance with the Brazilian Securities Commission (CVM) Instruction 527 of October 4, 2012.
Page 17 of 26
Ebitda:
Ebitda - Profit before net finance result, income tax and social contribution on income, depreciation and
amortization. Ebitda is not a measure used in accounting practices adopted in Brazil. It does not represent cash
flow for the periods presented and should not be construed as an alternative to profit as an indicator of operational
performance or as an alternative to cash flow as an indicator of liquidity. Ebitda does not have a standardized
definition, and the Company's computation of Ebitda may not be comparable with the adjusted Ebitda of other
companies. The Company understands that certain investors and financial analysts use Ebitda as an indicator of
operational performance of a company and/or of its cash flow.
Grendene’s business is low-capital-intensive, with depreciation at around 2% of net revenue (1.9% in 1H13 and
2.5% in 1H14). Therefore, we understand that the analysis of Ebit is more pertinent for the operational Company's
management.
Net finance result:
The net finance result in 2Q14 and 1H14 compared with the same period of 2013 is shown in the table below:
R$ thousand
2Q13
Interest received from customers
2Q14
Variation - %
2Q14/2Q13
1H13
1H14
Variation - %
1H14/1H13
24.6%
937
837
(10.7%)
3,028
6.0%
9,293
8,398
(9.6%)
25,271
19.6%
39,988
47,470
18.7%
366
456
2,857
Gain on foreign exchange hedge BM&FBovespa
Income from financial investments
21,133
Foreign exchange gains
13,199
2,944
(77.7%)
17,748
14,187
(20.1%)
7,704
10,056
30.5%
16,169
21,435
32.6%
387
45,646
3,058
44,813
690.2%
1,225
85,360
3,813
96,140
211.3%
Adjustment to present value
Other finance income
Finance income
R$ thousand
2Q13
2Q14
(1.8%)
Variation - %
2Q14/2Q13
1H13
1H14
12.6%
Variation - %
1H14/1H13
Expenses of foreign exchange hedge (95.5%)
(15,460)
(2,523)
(83.7%)
42.8%
(7,300)
(10,016)
37.2%
(57.2%)
(13,797)
(18,989)
37.6%
(2,750)
(34,278)
9.8%
(57.6%)
(2,504)
(39,061)
(12.2%)
76.0%
46,299
61,862
33.6%
(12,314)
(552)
Financing expenses
(3,745)
(5,349)
Foreign exchange losses
(9,342)
(3,998)
(1,190)
(26,591)
(1,383)
(11,282)
16.2%
19,055
33,531
BM&FBOVESPA
Other finance costs
Finance costs
Net finance result (R$ thousand)
Note that as from January 1, 2009, discounts for prompt payment granted to customers have been recognized as a deduction
from gross sales revenue (see the item "net sales revenue").
Profit:
Profit in 1H14 in line with 1H13, notwithstanding the increased adverse situations of this year, proves the resilience
of our operation. After decreasing in 1Q14, we recovered in 2Q14 with growth of 9.4% vs. 2Q13.
R$ thousand
Profit
Net margin, %
2Q13
66,184
16.5%
Variation - %
2Q14/2Q13
9.4%
72,413
1.7 p.p.
18.2%
2Q14
1H13
168,532
19.0%
Variation - %
1H14/1H13
0.2%
168,946
19.0%
1H14
Page 18 of 26
18.2%
16.5%
19.0%
19.0%
66.2
72.4
168.5
168.9
2Q13
2Q14
1H13
1H14
Profit (R$ MM)
Net margin (%)
Profit
Net margin
Investments (property, plant and equipment and intangible assets):
Investments in 1H14 were focused on the maintenance of industrial buildings and facilities, replacement of fixed
assets and purchase of new equipment for modernization of the plant and greater production efficiency and
investment in A3NP.
R$ thousand
2Q13
Investments
Variation - %
2Q14/2Q13
(36.1%)
27,092
2Q14
42,415
1H13
Variation - %
1H14/1H13
20.0%
65,741
1H14
54,769
Cash generation:
Cash generation and net cash:
Grendene has a healthy financial situation. Net cash (considering cash and cash equivalents and short-term and
long-term financial investments less short and long term loans and financing) at 6/30/2014 totaled R$ 841.8 million,
an increase of 36.6% in relation to the R$ 616.2 million at 12/31/2013 and less 5.2% in relation to the same period
of 2013.
The proportion of net revenue accumulated in 12 months and maintained in cash and cash equivalents and
financial investments decreased from 48.1% in 1H13 to 42.8% in 1H14.
The cash generated in the operating activities, of R$ 402.2 million was designed for the payment of investments in
property, plant and equipment and intangible assets of R$ 65.7 million; financial investments of R$ 171.1 million, in
the net decrease of debts with financial institutions of R$ 23.2 million, in the net purchase of shares for the
maintenance in treasury of R$ 1.4 million and in the payment of dividends of R$ 152.8 million.
The decrease of R$ 12.0 million of the amount maintained in current account and financial investments of very
short term completes the amount of the appropriation of cash described above. The complete cash flow analysis is
detailed in appendix IV.
The progress of cash and cash equivalents, short and long term financial investments, borrowings (current and
long terms) and net cash is shown in the chart below:
R$ million
1.600
1,600
1,200
1.200
990.4
983.6
867.4
800
800
400
400
917.7
888.4
740.5
1,045.8
938.5
876.4
841.8
734.0
616.3
-0
(400)
(72.8)
(95.2)
(126.9)
(117.7)
(169.4)
(96.7)
3/31/13
6/30/13
9/30/13
12/31/13
3/31/14
6/30/14
Cash and cash equivalents and financial investments (ST and LT)
Borrowings (ST and LT)
Net cash
Page 19 of 26
Structure of Assets, Liabilities and value indicators
Assets
June 30, 2013
December 31, 2013
15.0%
June 30, 2014
17.9%
19.3%
50.4%
35.2%
44.1%
34.6%
36.6%
46.9%
Cash and cash equivalents and financial investments (ST and LT)
Working capital (without Cash and cash equivalents and financial investments (ST and LT)
Non-current assets
Liabilities: Current + Non-current
June 30, 2013
4.3%
December 31, 2013
5.0%
7.6%
4.1%
7.8%
87.3%
88.0%
June 30, 2014
7.1%
88.8%
Liabilities – Financial
Liabilities – Operational
Consolidated equity
Value indicators
13.81
9.59
6.89
3.12
4.26
Cash and cash Net working capital
equivalents and
per share*
financial
investments (ST
and LT) per share*
1.44
Book value per
share*
Profit per share**
Share price*
Share price* / profit
per share**
* June 30, 2014
** Profit in the last 12 months
Page 20 of 26
Dividends:
In 1H14, Grendene prepays dividends of R$ 71.9 million, 31.9% lower than the dividend distributed in 1H13
(R$ 105.6 million) in accordance with the new policy of dividends adopted in February 2014.
In accordance with the Company's bylaws, the minimum mandatory dividend is computed based on 25% of the net
profit for the year, after transfers to reserves as required by law. Based on the balance at 6/30/2014, maintaining
the policy of quarterly advance payment of dividends and in accordance with the new policy disclosed on
2/13/2014, the Company prepays the second installment of interim dividends subject to ratification of the Annual
General Meeting that will approve the accounts for 2014, in the amount of R$ 29.9 million, as from August 13,
2014, totaling in the half a prepayment of R$ 71.9 million. The holders of record of common shares GRND3 on
July 31, 2014 (cut-off date) will be entitled to such dividends. Therefore, Grendene's shares (GRND3) will be traded
ex-dividend as from August 1, 2014 on the BM&FBovespa.
Basis for distribution of dividends for 1H14
Parent Company Information – GRENDENE
R$
168,946,124.23
(93,230,664.80)
(3,785,772.97)
71,929,686.46
(42,063,777.28)
(29,865,909.18)
300,320,000
0.23951014405
Tax incentives – Parent company
Transfer to legal reserve
Dividend calculation basis referring to 1H14
1
Dividend proposed referring to 1Q14
1
Dividend proposed referring to 2Q14
2
Number of common shares
Dividend per share in 1H14
1
Dividends approved “ad referendum” of the shareholders Annual General Meeting that will examine the balance sheets and the financial
statements for 2014.
2
Less 400,000 shares held in treasury.
Resolutions
Date of approval
Ex-dividend date
Payment beginning
date
Total amount of
dividend R$
Dividend per share
R$
1st advance payment
4/24/2014
4/30/2014
5/14/2014
42,063,777.28
0.14006319020
2nd advance payment
7/24/2014
8/1/2014
8/13/2014
29,865,909.18
0.09944695385
R$ 0.3380
R$ 0.3510
R$ 0.2395
R$ 0.1150
74.5%
74.7%
%
R$ per share
R$ 0.2390
64.8%
43.6%
41.5%
2.7%
5.3%
7.2%
3.5%
3.2%
1H10
1H11
1H12
1H13
1H14
Dividend per share
Payout (*)
Dividend yield (**)
(*) Payout: Dividend divided by profit after transfer to legal reserves
(**) Dividend yield: Dividend per share in the period divided by the weighted average price of the share, annualized.
Page 21 of 26
Corporate events:
4/24/2014 – Notice to stockholders: As from 5/14/2014, the Company started the first advance payment of
dividends, relating to 2014, in the amount of R$ 42,063,777.28 corresponding to R$ 0.1400631902 per common
share. The shares were traded ex-dividend beginning on 4/30/2014.
7/24/2014 – Board of Directors’ Meeting The members of the Board of Directors approved the financial
information relating to the second quarter and first half of 2014; the second advance payment of interim
dividends in the amount of R$ 29,865,909.18 corresponding to R$ 0.09944695385 per common share, based on
the results obtained up to 6/30/2014, which are subject to ratification at the Annual General Meeting that will
examine the balance sheet accounts and the financial statements for 2014 and the amendment to the Policy of
Disclosure of relevant acts and/or facts (CVM Instruction 547/14).
Capital Markets:
In 1H14, the share of Grendene (GRND3) devalued 21.0% considering the reinvestment of the dividends and in the
same period IBOVESPA index valued 3.2%. The daily average financial volume was R$ 6.3 million in 1H14
(R$ 10.1 million in 1H13).
The amount of businesses, number of shares negotiated, financial volume and the daily averages are presented in
the following table:
Average amount of
shares
Price R$
Trading Number of Number of
Period
sessions businesses
shares
Average volume R$
Volume R$
Weighted
average
Closing
Per
business
Daily
Per
business
Daily
1H13
122
199,318
60,980,700 1,238,362,808.00
20.31
20.26
306
499,842
6,213.00
10,150,514.82
1H14
121
183,877
51,485,800
14.93
13.81
280
425,502
4,180.86
6,353,420.18
768,763,842.00
The chart below shows the evolution of Grendene's common shares compared to the IBOVESPA Index,
considering the base 100 equal to December 31, 2013, and the daily financial volume.
50
125
40
100
30
75
20
50
10
25
12/31/13
1/31/14
2/28/14
Daily financial volume - R$
3/31/14
4/30/14
GRND3 - with reinvest. dividends
5/31/14
Basis 100 = 12/31/13
Financial volume - R$ million
Daily financial volume and GRND3 x IBOVESPA
0
6/30/14
Ibovespa
Information contained in this release includes assumptions about the future and reflects the Officers’ current perception and
perspectives on the outlook for the business, based on the evolution of the macroeconomic environment, industry conditions, the
Company’s performance and financial results. Any changes in such expectations and factors may mean that the actual results could
be significantly different from the current expectations, which are subject to various risks and uncertainties.
Page 22 of 26
Appendix I – Gross revenue, volume, average price and analysis by market
Gross sales
(R$ thousand)
1Q12
2Q12
3Q12
4Q12
1Q13
2Q13
3Q13
4Q13
1Q14
2Q14
Domestic market
377,782
322,941
528,725
615,954
475,268
404,256
595,605
671,789
447,640
385,843
(4.6%)
879,524
833,483
(5.2%)
Exports
117,661
89,697
84,290
187,400
128,303
100,458
143,395
192,289
167,776
102,902
2.4%
228,761
270,678
18.3%
66,558
45,686
41,548
91,039
64,289
48,530
62,664
84,467
70,971
46,150
(4.9%)
112,531
117,847
4.7%
Total
495,443
412,638
613,015
803,354
603,571
504,714
739,000
864,078
615,416
488,745
(3.2%)
1,108,285
1,104,161
(0.4%)
1Q12
2Q12
3Q12
4Q12
1Q13
2Q13
3Q13
4Q13
1Q14
2Q14
1H13
1H14
Exports - US$
Variation - %
2Q14/2Q13
Variation - %
2Q14/2Q13
1H13
Variation - %
1H14/1H13
1H14
Variation - %
1H14/1H13
Domestic market
26,510
25,009
38,702
49,500
37,497
30,986
43,188
53,996
30,935
27,685
(10.7%)
68,483
58,620
Exports
14,244
7,796
8,796
14,510
15,063
9,662
10,930
14,873
15,780
9,144
(5.4%)
24,725
24,924
0.8%
Total
40,754
32,805
47,498
64,010
52,560
40,648
54,118
68,869
46,715
36,829
(9.4%)
93,208
83,544
(10.4%)
Average price (R$)
Domestic market
1Q12
2Q12
3Q12
4Q12
1Q13
2Q13
3Q13
4Q13
1Q14
2Q14
Variation - %
2Q14/2Q13
1H13
(14.4%)
Variation - %
1H14/1H13
1H14
14.25
12.91
13.66
12.44
12.67
13.05
13.79
12.44
14.47
13.94
6.8%
12.84
14.22
10.7%
Exports
8.26
11.51
9.58
12.92
8.52
10.40
13.12
12.93
10.63
11.25
8.2%
9.25
10.86
17.4%
Exports (US$)
4.67
5.86
4.72
6.28
4.27
5.02
5.73
5.68
4.50
5.05
0.6%
4.55
4.73
4.0%
12.16
12.58
12.91
12.55
11.48
12.42
13.66
12.55
13.17
13.27
6.8%
11.89
13.22
11.2%
Total
U.S. dollar
1Q12
2Q12
3Q12
4Q12
1Q13
2Q13
3Q13
4Q13
1Q14
2Q14
Variation - %
2Q14/2Q13
1H13
1H14
Variation - %
1H14/1H13
Final U.S. Dollar
1.8221
2.0213
2.0306
2.0435
2.0138
2.2156
2.2300
2.3426
2.2630
2.2025
(0.6%)
2.2156
2.2025
(0.6%)
Average U.S. Dollar
1.7678
1.9633
2.0287
2.0585
1.9957
2.0700
2.2883
2.2765
2.3640
2.2297
7.7%
2.0329
2.2969
13.0%
Analysis by market
Gross sales
1Q12
2Q12
3Q12
4Q12
1Q13
2Q13
3Q13
4Q13
1Q14
2Q14
1H13
1H14
Domestic market
76.3%
78.3%
86.2%
76.7%
78.7%
80.1%
80.6%
77.7%
72.7%
78.9%
79.4%
75.5%
Exports
23.7%
21.7%
13.8%
23.3%
21.3%
19.9%
19.4%
22.3%
27.3%
21.1%
20.6%
24.5%
100.0%
100.0%
100.0%
100.0%
100.0%
100.0%
100.0%
100.0%
100.0%
100.0%
100.0%
100.0%
Total
Analysis by market
Sales volume
%
1Q12
2Q12
3Q12
4Q12
1Q13
2Q13
3Q13
4Q13
1Q14
2Q14
1H13
1H14
Domestic market
65.0%
76.2%
81.5%
77.3%
71.3%
76.2%
79.8%
78.4%
66.2%
75.2%
73.5%
70.2%
Exports
35.0%
23.8%
18.5%
22.7%
28.7%
23.8%
20.2%
21.6%
33.8%
24.8%
26.5%
29.8%
100.0%
100.0%
100.0%
100.0%
100.0%
100.0%
100.0%
100.0%
100.0%
100.0%
100.0%
100.0%
Total
Page 23 of 26
Appendix II - Consolidated Balance Sheet under IFRS (all amounts in thousands of reais)
Assets
Current
Cash and cash equivalents
Financial investments
Securities at fair value through profit or loss
Held-to-maturity investments
Trade receivables
Inventories
Tax credits
Income tax and social contribution recoverable
Securities receivable
Costs and prepaid expenses
Other receivables
Non-current
Held-to-maturity investments
Judicial deposits
Tax credits
Securities receivable
Deferred income tax and social contribution
Prepaid expenses
Investments
Property, plant and equipment
Intangible assets
Total assets
Liabilities and equity
Current
Borrowings
Trade payables
Contractual obligations – Licensing
Commissions payable
Taxes and contributions
Income tax and social contribution payable
Salaries and social security charges payable
Provision for labor risks
Other payables
Non-current
Borrowings
Consolidated equity
Controlling interests
Share capital
Carrying value adjustments
Capital reserves
Revenue reserves
Treasury shares
Retained earnings
Total liabilities and equity
12/31/2013
1,694,062
39,360
392,665
119,548
273,117
900,048
205,724
22,031
1,704
69,819
1,210
61,501
675,280
301,940
2,454
563
288
15,656
3,568
877
315,087
34,847
2,369,342
12/31/2013
285,066
101,909
39,792
16,862
39,078
12,683
4,272
63,756
1,838
4,876
16,316
15,827
489
2,067,960
2,060,734
1,231,302
(4,470)
5,078
839,294
(10,470)
7,226
2,369,342
% of total
71.5%
1.7%
16.6%
5.0%
11.5%
38.0%
8.7%
0.9%
0.1%
2.9%
0.1%
2.6%
28.5%
12.7%
0.1%
0.7%
0.2%
13.3%
1.5%
100.0%
% of total
12.0%
4.3%
1.7%
0.7%
1.6%
0.5%
0.2%
2.7%
0.1%
0.2%
0.7%
0.7%
87.3%
87.0%
52.0%
(0.2%)
0.2%
35.4%
(0.4%)
0.3%
100.0%
6/30/2014
1,498,484
27,320
474,656
296,664
177,992
550,886
255,923
26,623
3,873
91,442
14,142
53,619
848,042
436,504
1,907
560
125
13,280
3,476
877
344,272
47,041
2,346,526
6/30/2014
216,393
50,689
40,392
11,880
25,038
12,437
2,130
65,980
1,878
5,969
46,296
46,011
285
2,083,837
2,071,172
1,231,302
(10,584)
4,096
823,887
(7,395)
29,866
12,665
2,346,526
% of
total
63.9%
1.2%
20.2%
12.6%
7.6%
23.5%
10.9%
1.1%
0.2%
3.9%
0.6%
2.3%
36.1%
18.6%
0.1%
0.6%
0.1%
14.7%
2.0%
100.0%
% of
total
9.2%
2.2%
1.7%
0.5%
1.1%
0.5%
0.1%
2.8%
0.1%
0.3%
2.0%
2.0%
88.8%
88.3%
52.5%
(0.5%)
0.2%
35.1%
(0.3%)
1.3%
0.5%
100.0%
2013
over
2014
88.5%
69.4%
120.9%
248.2%
65.2%
61.2%
124.4%
120.8%
227.3%
131.0%
1.168.8%
87.2%
125.6%
144.6%
77.7%
99.5%
43.4%
84.8%
97.4%
109.3%
135.0%
100.0%
2013
over
2014
75.9%
49.7%
101.5%
70.5%
64.1%
98.1%
49.9%
103.5%
102.2%
122.4%
283.7%
290.7%
58.3%
100.8%
100.5%
100.0%
236.8%
80.7%
98.2%
70.6%
175.3%
100.0%
Page 24 of 26
Appendix III - Consolidated Statement of Income (all amounts in thousands of reais)
R$ thousand
2Q13
Domestic market
Exports
Gross sales and services revenue
Sales returns and taxes on sales
Sales deductions
Net sales revenue
Cost of goods sold
Gross profit
Operating income (expenses)
Selling expenses
General and administrative expenses
Other operating income
Other operating expenses
Operating profit before finance result and taxes (EBIT)
Finance income
Finance costs
Finance result
Profit before taxation
Income tax and social contribution:
Current
Deferred
EBITDA
404,256
100,458
504,714
(77,636)
(25,965)
(103,601)
401,113
(230,644)
170,469
(114,937)
(96,403)
(19,406)
2,631
(1,759)
55,532
45,646
(26,591)
19,055
74,587
100.8%
25.0%
125.8%
(19.4%)
(6.5%)
(25.8%)
100.0%
(57.5%)
42.5%
(28.7%)
(24.0%)
(4.8%)
0.7%
(0.4%)
13.8%
11.4%
(6.6%)
4.8%
18.6%
385,843
102,902
488,745
(73,064)
(18,661)
(91,725)
397,020
(237,074)
159,946
(121,069)
(101,856)
(21,269)
2,859
(803)
38,877
44,813
(11,282)
33,531
72,408
97.2%
25.9%
123.1%
(18.4%)
(4.7%)
(23.1%)
100.0%
(59.7%)
40.3%
(30.5%)
(25.7%)
(5.4%)
0.7%
(0.2%)
9.8%
11.3%
(2.8%)
8.4%
18.2%
Variation - %
% 2Q14/2Q13
(4.6%)
2.4%
(3.2%)
(5.9%)
(28.1%)
(11.5%)
(1.0%)
2.8%
(6.2%)
5.3%
5.7%
9.6%
8.7%
(54.3%)
(30.0%)
(1.8%)
(57.6%)
76.0%
(2.9%)
(3,810)
(4,775)
182
66,184
8,864
64,396
(0.9%)
(1.2%)
16.5 %
2.2%
16.1 %
(3,505)
1,469
2,041
72,413
11,722
50,599
(0.9%)
0.4%
0.5%
18.2%
3.0%
12.7%
(8.0%)
(130.8%)
9.4%
32.2%
(21.4%)
R$ thousand
1H13
Domestic market
Exports
Gross sales and services revenue
Sales returns and taxes on sales
Sales deductions
Net sales revenue
Cost of goods sold
Gross profit
Operating income (expenses)
Selling expenses
General and administrative expenses
Other operating income
Other operating expenses
Operating profit before finance result and taxes (EBIT)
Finance costs
Finance income
Finance result
Profit before taxation
Income tax and social contribution:
Current
Deferred
EBITDA
879,524
228,761
1,108,285
(166,065)
(55,300)
(221,365)
886,920
(496,579)
390,341
(245,098)
(209,861)
(37,424)
5,241
(3,054)
145,243
(39,061)
85,360
46,299
191,542
(15,294)
(8,003)
287
168,532
17,208
162,451
% of total
% of total
99.2%
25.8%
125.0%
(18.7%)
(6.2%)
(25.0%)
100.0%
(56.0%)
44.0%
(27.6%)
(23.7%)
(4.2%)
0.6%
(0.3%)
16.4%
(4.4%)
9.6%
2Q14
1H14
833,483
270,678
1,104,161
(167,718)
(45,635)
(213,353)
890,808
(522,075)
368,733
(257,421)
(213,570)
(41,482)
4,077
(6,446)
5.2%
21.6%
111,312
(34,278)
96,140
61,862
173,174
(1.7%)
(0.9%)
19.0%
1.9%
18.3%
(9,567)
1,770
3,569
168,946
22,304
133,616
% of total
93.6%
30.4%
124.0%
(18.8%)
(5.1%)
(24.0%)
100.0%
(58.6%)
41.4%
(28.9%)
(24.0%)
(4.7%)
0.5%
(0.7%)
12.5%
(3.8%)
10.8%
Variation - %
1H14/1H13
(5.2%)
18.3%
(0.4%)
1.0%
(17.5%)
(3.6%)
0.4%
5.1%
(5.5%)
5.0%
1.8%
10.8%
(22.2%)
111.1%
(23.4%)
(12.2%)
12.6%
6.9%
19.4%
33.6%
(9.6%)
(1.1%)
0.2%
0.4%
19.0%
2.5%
15.0%
(37.4%)
(122.1%)
0.2%
29.6%
(17.7%)
% of total
Page 25 of 26
Appendix IV - Consolidated Statement of Cash Flows (all amounts in thousands of reais)
Statement of cash flows
Cash flows from operating activities
Adjustments to reconcile profit to cash from operating activities:
Carrying value adjustments
Deferred income tax and social contribution
Gain on sale and write-off of property, plant and equipment
Gain on sale and write-off of intangible assets
Stock option or subscription plan
Provision for impairment of trade receivables
Provision for discount on prompt payments
Provision for obsolete inventories
Interest expenses on borrowings
Interest income on financial investments
Foreign exchange variations, net
Changes in assets and liabilities:
Trade receivables
Inventories
Other receivables
Trade payables
Salaries and social security charges payable
Taxes and contributions
Income tax and social contribution payable
Other payables
Net cash provided by operating activities
Cash flows from investing activities:
In property, plant and equipment
In intangible assets
Financial investments
Redemption of financial investments
Interest received
Net cash used in investing activities
Cash flows from financing activities:
New borrowings
Repayments of borrowings
Interest paid
Dividends paid
Purchase of treasury shares
Sale of treasury shares through exercise of purchase options
Net cash used in financing activities
Increase (decrease) in cash and cash equivalents
6/30/2013
6/30/2014
168,532
1,986
168,946
5,439
1,251
17,208
7,857
2,676
76
2,182
(15,651)
(10,056)
594
(129)
4,228
(38,024)
4,788
147,518
(6,114)
22,304
2,376
922
735
1,719
(344)
(19,752)
3,197
(164)
7,685
(45,439)
(5,093)
136,417
289,507
(62,091)
30,913
(17,398)
11,751
(3,474)
(9,166)
(13,834)
369,258
(53,396)
(32,629)
600
2,224
(246)
(2,142)
(17,929)
373,726
402,157
(48,406)
(7,619)
(904,843)
815,565
34,121
(111,182)
(49,143)
(16,596)
(1,494,825)
1,269,058
54,651
(236,855)
323,343
(371,899)
(3,998)
(169,306)
(47,281)
22,799
192,762
(204,182)
(11,809)
(152,729)
(5,499)
4,115
(246,342)
(177,342)
16,202
(12,040)
14,489
30,691
16,202
39,360
27,320
(12,040)
Changes in cash and cash equivalents:
At the beginning of the period
At the end of the period
Increase (decrease) in cash and cash equivalents
Page 26 of 26

Aumento de 10,5% da receita Bruta no 3T08

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