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

Transcription

(A free translation of the original in Portuguese)
Result for
3Q14 and 9M14
Growth of profit of 3.2% in 3Q14 with 21% of net margin
Sobral, October 23, 2014 - GRENDENE (BM&FBovespa: New Market - GRND3) discloses the
results for 3Q14 and 9M14. The information is presented on a consolidated basis under
International Financial Reporting Standards (IFRS).
Highlights of the results for 3Q14 and 9M14
Main financial and economic indicators
BM&FBOVESPA ticker:
GRND3
http://ri.grendene.com.br
Number of shares:
Common: 300,720,000
Price (9/30/2014):
R$ 17.00 per share
Market value:
R$ 5.1 billion
US$ 2.1 billion
Brazilian conference
call:
10/24/2014 at 10:30 a.m.
Connect:
- Brazil:
+11-3193-1001 or
+11-2820-4001
International
conference call:
10/24/2014 at 10:30 a.m.
(Simultaneous translation)
R$ million
3Q13
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
739.0
595.6
143.4
598.2
(317.0)
281.2
(166.6)
114.6
124.0
28.5
122.1
0.41
54.1
43.2
10.9
13.66
13.79
13.12
730.1
590.8
139.3
601.2
(314.6)
286.6
(180.8)
105.8
118.0
34.2
126.0
0.42
54.9
43.5
11.4
13.31
13.60
12.22
Margins %
3Q13
3Q14
Gross
EBIT
EBITDA
Net
Contacts:
Francisco Schmitt
Investor Relations Officer
dri@grendene.com.br
Telephone:
+55-54-2109-9022

Fax:
+55-54-2109-9991
Result for 3Q14 and 9M14
% variation
3Q14/3Q13
47.7%
17.6%
19.6%
21.0%
(1.2%)
(0.8%)
(2.9%)
0.5%
(0.7%)
1.9%
8.5%
(7.7%)
(4.8%)
19.9%
3.2%
3.2%
1.4%
0.6%
4.3%
(2.6%)
(1.4%)
(6.9%)
Var.
(p.p.)
0.7
(1.6)
(1.1)
0.6
9M13
9M14
1,847.3
1,475.1
372.2
1,485.1
(813.6)
671.5
(411.7)
259.8
286.5
74.8
290.6
0.97
147.3
111.7
35.6
12.54
13.21
10.44
1,834.2
1,424.3
409.9
1,492.0
(836.7)
655.3
(438.2)
217.1
251.7
96.1
295.0
0.98
138.4
102.1
36.3
13.25
13.95
11.29
9M13
45.2%
17.5%
19.3%
19.6%
9M14
43.9%
14.5%
16.9%
19.8%
% variation
9M14/9M13
(0.7%)
(3.4%)
10.2%
0.5%
2.8%
(2.4%)
6.4%
(16.5%)
(12.2)%
28.4%
1.5%
1.5%
(6.1%)
(8.6%)
1.9%
5.7%
5.6%
8.1%
Var.
(p.p.)
(1.3)
(3.0)
(2.4)
0.2
Highlights of 3Q14 vs. 3Q13





Connect:
- USA and other
countries:
+1-786-924-6977
47.0%
19.2%
20.7%
20.4%
3Q14
Increase of 0.5% in net revenue.
EBIT of R$ 105.8 million, 7.7% lower.
Profit of R$ 126.0 million, increase of 3.2%.
Increase in gross and net margins and decrease of the EBIT margin.
Distribution of dividends - R$ 53.4 million, shares traded ex-dividend as from
October 31, 2014.
Leadership in footwear exports - Grendene maintains the leading position in
Brazilian footwear exports - 37.5% of Brazilian footwear exported in 3Q14 (38.6%
in 3Q13).
Page 1 of 27
Management Discussion and Analysis
Gross Revenue, Net Revenue and Volumes
As we had already foreseen, the domestic economic scenario remains challenging and, according to our
expectations, it will not improve this year. As from our last results disclosed on July 24, the expectations of
economic growth (Gross Domestic Product - GDP) mentioned in the Brazilian Central Bank Focus Bulletin for this
year have suffered successive reductions falling from 0.90% to 0.27% p.a.
Likewise, the results for 3Q14 were also as anticipated. We continue advancing little in revenue and increasing
profit despite the expenses related to yet pre-operating initiatives and even when compared to the same high
standard of last year. In the accumulated result for 2014 we obtained profit of R$ 295 million, 1.5% higher than the
same period last year and a slightly higher net margin of 19.8% (19.6% in 2013).
The Gross Revenue obtained in 3Q14 of R$ 730.1 million, comprising R$ 590.8 million in the domestic market and
R$ 139.3 million in the international market, was obtained with the sale of 43.5 million pairs in the domestic market
(increase of 0.6% versus 3Q13) and 11.4 million exported pairs (increase of 4.3% versus 3Q13) and average
prices of R$ 13.60 in the domestic market (decrease of 1.4%) and R$ 12.22 in the exported pairs (decrease of
6.9%) respectively, always compared with the same period of the previous year. In total, we have an increase of
1.4% in the number of pairs and a decrease of 2.6% in the average prices.
The efforts to manage the trade-off between prices and volumes continue, but the impacts on the increase of costs
occurred in 2H13 were offset and the net revenue increased 0.5% and the Cost of Sales (COGS) decreased 0.7%
in 3Q14, increasing the gross margin in 0.7 p.p. from 47% in 3Q13 to 47.7% in 3Q14.
However, with the low growth 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 furniture sector and Grendene UK Galeria Melissa in London), the operating expenses increased from 27.9% of the Net Revenue in 3Q13 to 30.1% of
the Net Revenue in 3Q14, resulting in the decrease of EBIT from R$ 114.6 million in 3Q13 to R$ 105.8 million in
3Q14 (7.7% of decrease) and margin decrease of 1.6 p.p. (from 19.2% in 3Q13 to 17.6% in 3Q14).
As in 1H14, the increase of the market interest rate provided growth in the finance result of 28.4% in 9M14, always
in comparison with the same period in 2013.
Profit increased 3.2% in 3Q14, even with all the difficulties and the high comparison basis mentioned above (profit
growth of 43.0% in 3Q12 and other 2.2% in 3Q13).
In this scenario of recession and with a high comparison basis of 9M13, period during which the EBIT grew 33.2%
and Profit grew 11.4% when respectively compared with the same period of 2012, we closed 9M14 with net
revenue in line with last year and profit increased by 1.5% in comparison with 2013. As for margins, there was a
decrease of 1.3 p.p. in gross margin, 3.0 p.p. in EBIT margin and net margin in line (0.2 p.p. higher), in comparison
with the same period of 2013.
COGS in 9M14 exceeded the amount of 9M13 in 2.8%, despite the decrease in the total number of pairs sold of
6.1%, with the increase in the COGS per pair from R$ 5.52 in 9M13 to R$ 6.05 in 9M14, an increase of 9.6%. The
various increases in raw material in 1H14 contributed to the growth of the unit cost the same way as in 2H13, as
well as the fact that we were unable to adjust the costs, mainly in 1H14, at the same speed of the decrease of
demand, reversing this trend in 3Q14. In our opinion reversing the downward trend in gross margin in a
recessionary market and after facing increases of costs is evidence of the resilience and flexibility of our business
model.
We again emphasize what we said earlier this year: repeating the results of 2013 would be a challenge, which we
were able to overcome in 1H14 and now in 9M14. This does not mean we are satisfied. We have yet to regain the
level of our EBIT margin.
The foundations that have provided us market share gains with good returns remain in place. In periods of
recession these fundamentals prove their worth and demonstrate how Grendene managed to grow throughout its
history in very turbulent times. Again this could be noted in this quarter.
With these results, the generation of cash from operations in 9M14 was R$ 474.1 million, 55.5% higher than the
same period of the previous year, of which R$ 182.6 million was used for the payment of dividends.
In 9M14 the foreign exchange effect was positive by R$ 30.7 million, whereas the gross export revenue increased
1.9% before considering the exchange effect and 10.2% after considering this effect vs. 9M13.
We still believe that, this year, the domestic market will grow little and the foreign market must continue contributing
to the improvement of the margins.
At the end of 1H14, we said that, just as in the first half of the year, our expectations were worse margins in 2H14.
The EBIT margin actually confirmed our expectation decreasing from 19.2% to 17.6% in 3Q14.
Page 2 of 27
However, although the market has not recovered, the gross and net margins increased in comparison with last year
from 47% to 47.7% and from 20.4% to 21% respectively. The perspectives for the rest of the year remain
challenging.
In 4Q14, there must be a positive impact from the definition by the government of the Special System for Refund of
Tax Amounts to Exporting Companies (Reintegra) rate of 3% starting from October this year. 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).
The track record shows that Grendene reacts quickly to market changes, which once again was confirmed this
quarter. Nevertheless, we are still mobilized to tailor the portfolio and costs to the economy scenario, which was
worse than initially expected for 9M14 and seems unlikely to improve in the short term. 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.
R$ million
Changes of gross revenue from domestic sales and exports,
according to the volume, mix and average prices
(126.7)
75,9
6,9
0,1
1.847,3
Gross
revenue 9M13
30,7
1.834,2
1.803,5
Volume
impact FM
Average price
and mix
impact - DM
Volume
impact FM
Average
price
and mix
impact - FM
Gross
revenue
without
foreign
exchange
impact
Foreign
exchange
impact - FM
Gross
revenue 9M14
We continue progressing in performing our strategy. On October 9, we opened another Galeria Melissa, this time in
London, with the aim of strengthening the brand. Now there are three strategically placed Galerias - in New York,
São Paulo and London - to strengthen the brand that keeps growing in the international market. The next Galeria,
as already announced, will be located in an Asian city. These efforts have guaranteed the growth of Melissa
products in its main markets as well as of its relevance in Grendene's businesses. In the domestic market, the
operations of the franchise Clube Melissa reached 150 stores with good profitability. We will probably exceed 200
stores, which we had initially estimated as the potential of this operation for next year.
In our product portfolio, we kept the volume of launches and innovations, such as the remarkable "One by One"
shoes, which may be worn in either foot indistinctively, and may be bought per unit. The graphics and colors allow
numerous combinations. Concerning design, Karl Lagerfeld, Vivianne Westwood, Jason Wu and J. Maskrey were
some of the stars in the area who once again developed new products in partnership with Grendene.
In the celebrities portfolio, we counted once again with Ivete Sangalo, Shakira, Paula Fernandes, among many
others, and Juliana Paes is back. Regarding characters, besides the traditional ones by Mattel, Disney and others,
we had the addition of Peppa Pig, all of which contributed to the building of our brands.
We have also extended our operations in the brand portfolio. Aligned with our efforts to develop brands we have
negotiated the license for Azaleia and Dijean branded products as announced in Relevant Fact dated 10/23/14,
which will be produced and sold by Grendene. These brands, which are very strong in the Brazilian market, belong
to the Vulcabrás company, which is a Grendene's related party. The licensing contract follows the price and
condition standards which Grendene usually uses with other brands, characters and celebrities, and is limited to
the shoes segment in which Grendene operates, not competing with the products traditionally manufactured and
sold by Vulcabrás, which will keep exploring its brands as usual.
As expected, TOG (trade name of the furniture operation A3NP, a subsidiary of Grendene) has started sales, but
has not yet started billing, and already has a portfolio of orders of 400 thousand euros for delivery in the coming
months, especially in Europe. Sales in Brazil will start next year.
Our expectations concerning this business are still good but, as previously stated, the ultimate proof of success will
come when end users start using the products and there are new orders by the retail sector, or as we say with the
jargon: “spin the product in the store”.
Page 3 of 27
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 third quarters, from 2008 to 2014:
R$ million
Gross revenue
Y-o-Y variation
Profit
Y-o-Y variation
3Q08
457.9
R$ million
Advertising expenses
Participation % - Net operating
revenue
3Q08
32.3
9.0%
73.3
3Q09
475.5
3.9%
65.6
(10.5%)
3Q10
546.4
14.9%
104.8
59.7%
3Q11
511.3
(6.4%)
83.5
(20.3%)
3Q12
613.0
19.9%
119.4
43.0%
3Q13
739.0
20.6%
122.1
2.2%
3Q14
730.1
(1.2%)
126.0
3.2%
CAGR
8.1%
3Q09
33.9
9.0%
3Q10
44.4
10.2%
3Q11
46.3
11.2%
3Q12
42.9
8.6%
3Q13
45.7
7.6%
3Q14
53.4
8.9%
CAGR
8.8%
9.5%
We note that Gross Revenue in 3Q14 was the second best over the latest 7 third quarters, preceded only by that
obtained in 3Q13, and profit was the highest among third quarters.
Performance - Compound Annual Growth Rate (CAGR), in the first nine months, from 2008 to 2014:
R$ million
Gross revenue
Y-o-Y variation
Profit
Y-o-Y variation
9M08
1,076.1
R$ million
Advertising expenses
Participation % - Net operating
revenue
9M08
69.5
8.2%
156.7
9M09
1,218.7
13.2%
187.2
19.5%
9M10
1,394.0
14.4%
189.7
1.4%
9M11
1,210.6
(13.2%)
183.9
(3.1%)
9M12
1,521.1
25.6%
261.0
41.9%
9M13
1,847.3
21.4%
290.6
11.4%
9M14
1,834.2
(0.7%)
295.0
1.5%
CAGR
9.3%
9M09
72.3
7.4%
9M10
82.6
7.4%
9M11
85.0
8.7%
9M12
101.3
8.3%
9M13
105.2
7.1%
9M14
105.9
7.1%
CAGR
7.3%
11.1%
When comparing the first nine months, gross revenue in 9M14 was the second highest over the latest 7
comparable periods of each previous year, preceded only by 9M13. Profit was the highest obtained in this track
record.
These observations are clearer in the charts below:
Gross sales revenue
Growth at a Compound Annual Growth Rate (CAGR)
between 8% and 12%
2,300
2,100
1,847
1,900
1,834
R$ million
1,700
1,394
1,500
1,219
1,300
1,100
991
1,521
1,076
1,211
900
700
500
9M07
9M08
9M09
Guidance 8% p.a.
9M10
9M11
Guidance 12% p.a.
9M12
9M13
9M14
Realized
Page 4 of 27
Profit
Growth at a Compound Annual Growth Rate (CAGR) between 12% and
15%
410
R$ million
360
310
295
260
210
161
157
187
160
261
190
184
9M10
9M11
110
291
60
9M07
9M08
9M09
Guidance 12% p.a.
Guidance 15% p.a.
9M12
9M13
9M14
Realized
In the past 12 months ended 9/30/2014, Grendene presented a return to stockholders (retained earnings in 12
months divided by Equity adjusted by distributed dividends) of 23.6%, distributed R$ 266.4 million in dividends,
generated R$ 472.5 million of operating cash and increased its cash and cash equivalents and financial
investments to R$ 1,010.9 million.
The results obtained with a difficult year exceeded our expectations and reinforce our confidence in Grendene's
business model andencourages 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 World Cup, electoral uncertainties remain and macroeconomic
data shows weakness already indicated by the downgrade of the Brazil's credit rating by two rating agencies and
the analysis announced to the International Monetary Fund (IMF) itself. In the foreign market, recovery in major
markets has not shown strength, worsened by low economic growth in Latin America with crises in traditional
Brazilian trade partners, such as Argentina and Venezuela. The continued poor health of the domestic market
makes it more and more difficult to grow.
Although we started the year with low expectations for the Brazilian economy, so far the results have been even
worse than those expectations, in a surprisingly negative way. Nevertheless, our results follow with positive trends
with revenue close to the expected base range and profit almost on the expected base range, when we analyze the
last six 9M periods (9M08-9M14).
This trend analysis in a longer term evidences the high comparison basis which constitutes 9M13, which makes
9M14 seem worse than it really is in a long-term context. It also indicates the possibility of being below the range if
the economic situation continues to worsen.
However, we notice that every year we have improved the last result line as we did in 9M14. 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 difficulties. In 2014, it was not different.
We also note that, in October this year, we complete ten years from the Initial Public Offering of shares of
Grendene (IPO on 10/28/2004). In this period, we have distributed R$ 1.7 billion of dividends and also virtually
Page 5 of 27
tripled the Company's equity. We have multiplied the annual profit by two (up to 12/31/2013), accumulating R$ 3.2
billion in the 10-year period (up to 9/30/2014). We have manufactured 1.72 billion pairs of shows, 1.3 billion in the
domestic market and we have exported 420 million pairs. In the domestic market, this volume corresponds to
approximately 1 pair for each inhabitant in each year of the period and in the foreign market, it represents the
leadership in exports of shoes from Brazil during the whole period. In 2013, we reached a record of 216 million
pairs in one year. This grow was obtained with a relatively small investment in property, plant and equipment, of
R$ 546 million, and a higher investment in marketing (recorded as expenses) of R$ 1.3 billion. Despite the
investments and the distribution of dividends, the Company's net cash (less financial debt) increased from R$ 184
million on 12/31/2004 to R$ 868 million on 9/30/2014. And the share price, adjusted at the breakdowns, increased
from R$ 10.33 (adjusted price at the IPO) to R$ 17.00 on 9/30/2014: a growth of 64.5%.
For 2014, the quarterly results have not changed our expectations about the year and we still do not have the
expectation of growing in volume, but we expect some growth in revenue and profit. When analyzing the entire
year, it will be a challenge to maintain the margins of the last year, as we started this year with the high costs of
2H13 and difficulties to align prices in a weak market. We are still 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.
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 finance 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 6 of 27
Highlights
In August, Melissa presented its new Summer Collection, "Eat My Melissa", which combines fashion and food in an
alluring and fun way.
At the end of September 2014, the Club Melissa franchise network had
more than 150 stores throughout Brazil.
Melissa surprises and innovates once again by launching
Melissa One by One, a type of shoe that fits either the right
or the left foot and is sold per unit.
There are nine different models, which allow up to 81
different look combinations.
Galeria Melissa - with great emphasis in the
media, Galeria Melissa opened on October 9
in London. The space of almost 400 square
meters, one of the largest spaces of the
brand in the world, mixes a clean design in the inside with Georgian
architecture on the outside.
The new Concept Store in London is located at number 43, in the heart of
Covent Garden.
Inside the Concept Store
The 2nd movie of the LIFEAHOLIC campaign of the Rider brand
started to be shown in the breaks of the main soccer games of the
SporTV channel.
Page 7 of 27
Fernanda Paes Leme
Sheron Menezes
Ivete Sangallo
The merchandising actions had the presence of
celebrities Ivete Sangallo, Paula Fernandes, Juliana
Paes, Sheron Menezes and Fernanda Paes Leme.
Paula Fernandes
Juliana Paes
In September, the furniture brand TOG, started
showcasing its products in various showrooms of the
RBC Design Center - France.
Products launches
Page 8 of 27
Awards
In the award ceremony that took place on September 30, 2014, Grendene was honored
as the leader in the Leather & Shoes sector by the 500 Greatest in the South (500
Maiores do Sul) ranking, which is sponsored by Revista Amanhã, in partnership with
PWC. In the 2014 edition, the Company holds the 9th position overall among the large
companies in the State of Rio Grande do Sul and the 29th in the Southern Region of
Brazil.
Grendene is one of the highlights of the Textile, Leather and Apparel
Industry in the 14th edition of the Valor 1000 Yearbook - 2014 edition. The
publication of the Valor Econômico magazine shows the Company as the
best and biggest company in the sector in the Northeastern region of Brazil,
3rd place among the best companies in the sector and the 220th position
among the top 1000. The other highlights are the 2nd place in current
liquidity, 3rd in activity margin and profit, 4th in EBITDA margin, 7th in interest
coverage and profitability and 10th in sustainable growth.
Grendene was recognized by Associação Serrana de Recursos Humanos
(Serrana Human Resources Association - ARH Serrana) with the "Highlights of the
Year in HR - Edition 2014" award in the Projects category with the case of the
Programa Estagiar (Intern Program).
Programa Estagiar aims to attract and develop young talents who have values
aligned with the business and also meet the demand for professionals in early
career, through behavioral training and hands-on experience in the Company.
ARH Serrana is an association representing professionals engaged in the
management of people in the region of Serra Gaucha.
Page 9 of 27
Analysis of the operations for 3Q13 and 9M13 (on a consolidated basis under the IFRS)
Gross revenue
We expected a small increase in gross revenue but we had a slight decrease. Although the number of pairs has
increased, the mix of products sold had lower prices.
Total (DM + FM)
3Q13
Total gross revenue (R$ million)
Average price (R$)
3Q14
739.0
54.1
13.66
730.1
54.9
13.31
Var.
3Q14/3Q13
(1.2%)
1.4%
(2.6%)
9M13
Var.
9M14/9M13
1,834.2
(0.7%)
138.4
(6.1%)
13.25
5.7%
9M14
1,847.3
147.3
12.54
739,0
730,1
54,1
54,9
3Q13
3Q14
3Q13
3Q14
Gross sales revenue (R$ MM)
Volume (MM of pairs)
13,66
13,31
3Q13
3Q14
Average price (R$)
Share in gross revenue
3Q13
3Q14
19,4%
19,1%
80,6%
Domestic market
Exports
80,9%
Domestic market
Exports
Page 10 of 27
Share in sales volume
3Q13
3Q14
20,8%
20,2%
79,2%
79,8%
Domestic market
Exports
1.847,3
1.834,2
9M13
9M14
Domestic market
Exports
147,3
138,4
9M13
9M14
Gross sales revenue (R$ MM)
Volume (MM of pairs)
12,54
13,25
9M13
9M14
Average price (R$)
9M13
9M14
20,1%
22,3%
77,7%
79,9%
Domestic market
Exports
Domestic market
Exports
Page 11 of 27
9M13
9M14
24,2%
26,2%
73,8%
75,8%
Domestic market
Exports
Domestic market
Exports
Domestic market (DM):
The decrease of 0.8% in revenue of the domestic market results primarily from the sale of a mix of lower prices,
which is a result of a consumer with less disposable income. Concerning volume, even after several years of robust
growth in the third quarters (3Q12 - 25.5% and 3Q13 - 11.6%), we maintained a growth of 0.6% compared to
3Q13, which means a cumulative growth of 48% in 3 years, well above the market growth.
Domestic market
3Q13
Gross revenue (R$ million)
Average price (R$)
3Q14
595.6
43.2
13.79
590.8
43.5
13.60
Var.
3Q14/3Q13
(0.8%)
0.6%
(1.4%)
9M13
9M14
1,475.1
111.7
13.21
1,424.3
102.1
13.95
Var.
9M14/9M13
(3.4%)
(8.6%)
5.6%
Changes in Brazilian Reais of gross sales revenue from domestic market and
exports, due to volume and average price
R$ million
3,7
(8.5)
595,6
Gross revenue DM - 3Q13
590,8
Volume Impact - DM
Average price and
mix impact - DM
Gross revenue
DM - 3Q14
43,2
43,5
13,79
13,60
3Q13
3Q14
3Q13
3Q14
Volume DM (MM of pairs)
Average price DM (R$)
Page 12 of 27
R$ million
Changes in Brazilian Reais of gross sales revenue from domestic market and
exports, due to volume and average price
(126.7)
75,9
1.475,1
1.424,3
Gross revenue DM - 9M13
Volume Impact - DM
Average price and
mix impact - DM
Gross revenue
DM - 9M14
111,7
102,1
13,21
13,95
9M13
9M14
9M13
9M14
Volume DM (MM of pairs)
Average price - FM (R$)
Foreign market (FM):
In the foreign market, we had no growth either. The difficulties in Argentina, which normally contributes to the sales
of this period, and the low activity in Europe contributed to this result. Foreign exchange was almost neutral, but its
volatility also had a negative impact. Even so, the volume grew compared to last year, which also represents a high
comparison basis.
Exports
3Q13
Gross revenue (R$ million)
Gross revenue (US$ million)
Average price (R$)
Average price (US$)
3Q14
143.4
62.7
10.9
13.12
5.73
139.3
61.2
11.4
12.22
5.37
Var.
3Q14/3Q13
(2.9%)
(2.3%)
4.3%
(6.9%)
(6.3%)
9M13
9M14
372.2
175.7
35.6
10.44
4.93
409.9
179.0
36.3
11.29
4.93
Var.
9M14/9M13
10.2%
1.9%
1.9%
8.1%
-
R$ million
Changes in Brazilian Reais of gross sales revenue from export, due to volume,
mix and average price
6,1
143,4
(9.4)
(0.8)
140,1
139,3
Gross revenue FM Volume impact - Average price and Gross revenue Foreign exchange Gross revenue FM
- 3Q13
FM
mix impact - FM without foreign
impact - FM
- 3Q14
exchange impact
Page 13 of 27
Changes in U.S. dollars of gross sales revenue from export, due to volume and
average price
US$ million
2,6
(4.1)
62,7
61,2
Gross revenue FM - 3Q13
Volume impact - FM
Average price and mix
impact - FM
Gross revenue FM - 3Q14
10,9
11,4
13,12
12,22
3Q13
3Q14
3Q13
3Q14
Volume FM (MM of pairs)
R$ million
Changes in Brazilian Reais of gross sales revenue from export, due to volume,
mix and average price
0,1
6,9
30,7
409,9
379,2
372,2
Gross revenue FM Volume impact - Average price and Gross revenue Foreign exchange Gross revenue FM
- 9M13
FM
mix impact - FM without foreign
impact - FM
- 9M14
exchange impact
Changes in U.S. dollars of gross sales revenue from export, due to volume and
average price
US$ million
3,2
0,1
179,0
175,7
Gross revenue FM - 9M13
Volume Impact - FM
Average price and
mix impact - FM
Gross revenue
FM - 9M14
Page 14 of 27
35,6
36,3
10,44
11,29
9M13
9M14
9M13
9M14
Volume FM (MM of pairs)
According to data of the Foreign Trade Secretariat (SECEX)/Brazilian Footwear Industry Association
(ABICALÇADOS), Brazilian footwear exports in 9M14 vs. 9M13 showed an increase of 6.5% in the number of pairs
sold and a 2.4% decrease in revenue in U.S. dollars and 8.4% in average price in U.S. dollars. Grendene grew
1.9% in export revenue in US$ and in the volume of exported pairs, 10.2% in gross export revenues in Brazilian
Reais and 8.1% in the average cost, and average prices in US$ were maintained.
In 9M14, Grendene participation in Brazilian exports of footwear was 38.6%. Again, Grendene brands confirm the
sales leadership of pairs exported from Brazil.
Net sales revenue:
In 3Q14, net revenue, unlike the gross revenue, had a small increase of 0.5% as a result of reduced discounts to
customers.
R$ million
3Q13
Gross revenue DM
Gross revenue FM
Total gross revenue
Returns and taxes on sales
Discounts granted to customers
Sales deductions
Net sales revenue
595.6
143.4
739.0
(106.0)
(34.8)
(140.8)
598.2
3Q14
590.8
139.3
730.1
(101.4)
(27.4)
(128.9)
601.2
Var.
3Q14/3Q13
(0.8%)
(2.9%)
(1.2%)
(4.3%)
(21.1%)
(8.5%)
0.5%
9M13
1,475.1
372.2
1,847.3
(272.1)
(90.1)
(362.2)
1,485.1
9M14
1,424.3
409.9
1,834.2
(269.2)
(73.1)
(342.2)
1,492.0
598,2
601,2
1.485,1
1.492,0
3Q13
3Q14
9M13
9M14
Net sales revenue (R$ MM)
Var.
9M14/9M13
(3.4%)
10.2%
(0.7%)
(1.1%)
(18.9%)
(5.5%)
0.5%
Net sales revenue (R$ MM)
We note that, as from 1/1/2008, in agreement with the IFRS provisions, we now present Net Revenues less finance
income embedded in credit to customers (Present Value Adjustments - AVP) and as from 1/1/2009, also less
discounts granted to customers for prompt payment.
Page 15 of 27
Cost of goods sold (COGS):
In 1Q14 and 2Q14, we had a decrease of revenues and COGS growth compared to the same period in the last
year. In 3Q14, we managed to control this situation and COGS decreased 0.7% compared to 3Q13, even with the
growth of the Net Revenue of 0.5% and the growth in the number of pairs of 1.4%. Naturally a mix with lower prices
has lower costs.
COGS/pair in 3Q14 decreased 2%, reflecting the mix and the efforts of adjustments in the cost structure.
3Q13
COGS (R$ million)
Cost of sales per pair (R$)
3Q14
317.0
5.86
314.6
5.74
R$ million
4,3
Var.
3Q14/3Q13
(0.7%)
(2.0%)
9M13
813.6
5.52
836.7
6.05
314,6
Impact -Volume of pairs
Decrease of unit cost
COGS - 3Q14
5,86
5,74
5,52
6,05
3Q13
3Q14
9M13
9M14
COGS per pair (R$)
COGS per pair (R$)
R$ million
(49.3)
72.4
836,7
813,6
COGS - 9M13
Var.
9M14/9M13
2.8%
9.6%
(6.7)
317,0
COGS - 3Q13
9M14
Impact - Volume of pairs
Increase of unit cost
COGS - 9M14
The following chart shows the changes in market prices in dollar terms (according to the Independent Commodity
Information Services London Oil Reports - 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.
Page 16 of 27
1Q13
52,560
2Q13
40,648
Thousands of pairs
4Q13
68,869
3Q13
54,118
1Q14
46,715
2Q14
36,829
6,0
5,67
5,74
5,52
6,00
5,06
5,00
4,0
4,00
3,0
3,00
2,0
R$ /pair
R$ thousand/metric ton
5,0
7,00
6,44
6,10
5,86
3Q14
54,852
2,00
1,0
1,00
Plastifying oils / metric ton (FOB ) - R$
PVC resin / metric ton (CFR) - R$
set-14
ago-14
jul-14
jun-14
mai-14
abr-14
mar-14
fev-14
jan-14
dez-13
nov-13
out-13
set-13
ago-13
jul-13
jun-13
mai-13
abr-13
mar-13
fev-13
jan-13
-
COGS / per pair - R$
Source: ICIS-LOR petrochemicals prices and Company's quarterly data
Gross profit:
Gross profit grew 1.9% in 3Q14 and decreased 2.4% in the accumulated amount compared with 2013. Gross
margins were 42.3%, 40.3% and 47.7% in 1Q14, 2Q14 and 3Q14, respectively, reflecting the seasonal behavior of
the business.
R$ million
3Q13
Gross profit
Gross margin, %
281.2
47.0%
3Q14
286.6
47.7%
Var.
3Q14/3Q13
1.9%
0.7 p.p.
9M13
9M14
671.5
45.2%
655.3
43.9%
45,2%
43,9%
286,6
671,5
655,3
3Q14
9M13
9M14
47,0%
47,7%
281,2
3Q13
Gross profit (R$ MM)
Gross profit (R$ MM)
Gross margin (%)
Gros margin (%)
Var.
9M14/9M13
(2.4%)
(1.3 p.p.)
Selling expenses:
The selling expenses increased less than inflation and did not reflect the increase 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 UK. where the implementation of a new Galeria Melissa was in process, and which opened on October
09, 2014.
R$ million
Selling expenses
% of net revenue
3Q13
146.9
24.6%
3Q14
155.5
25.9%
Var.
3Q14/3Q13
5.8%
1.3 p.p.
9M13
356.8
24.0%
9M14
369.1
24.7%
Var.
9M14/9M13
3.4%
0.7 p.p.
Page 17 of 27
24,6%
25,9%
24,0%
24,7%
146,9
155,5
356,8
369,1
3Q13
3Q14
9M13
9M14
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$ million
3Q13
Advertising and publicity
% of net revenue
3Q14
45.7
7.6%
7,6%
8,9%
45,7
53,4
3Q13
3Q14
53.4
8.9%
Var.
3Q14/3Q13
17.0%
1.3 p.p.
9M13
9M14
105.2
7.1%
105.9
7.1%
7,1%
7,1%
105,2
105,9
9M13
9M14
Advertising (R$ MM)
Advertising (R$ MM)
% of net revenue
% of net revenue
Var.
9M14/9M13
0.7%
-
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$ million
3Q13
G&A
% of net revenue
3Q14
21.3
3.6%
25.2
4.2%
Var.
3Q14/3Q13
18.0%
0.6 p.p.
9M13
9M14
58.8
4.0%
66.7
4.5%
4,2%
4,0%
4,5%
21,3
25,2
58,8
66,7
3Q13
3Q14
9M13
9M14
3,6%
General and administrative expenses
(R$ MM)
(R$ MM)
% of net revenue
% of net revenue
Var.
9M14/9M13
13.4%
0.5 p.p.
Page 18 of 27
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.
17,5%
19,2%
14,5%
17,6%
114,6
105,8
3Q13
3Q14
EBIT (R$ MM)
Reconciliation of EBIT / EBITDA *
(R$ thousand)
Profit for the period:
259,8
9M13
EBIT margin (%)
3Q13
122,093
Non-controlling interests
217,1
9M14
EBIT (R$ MM)
3Q14
Var.
3Q14/3Q13
126,005
EBIT margin (%)
9M13
3.2%
9M14
290,625
294,951
Var.
9M14/9M13
1.5%
(294)
(541)
84.0%
(581)
(4,110)
607.4%
21,311
14,500
(32.0%)
44,608
22,297
(50.0%)
Finance result, net
(28,528)
(34,206)
19.9%
(74,827)
(96,068)
28.4%
EBIT
114,582
105,758
(7.7%)
259,825
217,070
(16.5%)
Taxes on profit
Depreciation and amortization
9,442
12,284
30.1%
26,650
34,588
29.8%
124,024
118,042
(4.8%)
286,475
251,658
(12.2%)
EBIT margin
19.2%
17.6%
(1.6 p.p.)
17.5%
14.5%
(3.0 p.p.)
EBITDA margin
20.7%
19.6%
(1.1 p.p.)
19.3%
16.9%
(2.4 p.p.)
EBITDA
* In accordance with the Brazilian Securities Commission (CVM) Instruction 527 of October 4, 2012.
Grendene's business is low-capital-intensive, with depreciation at around 2% of net revenue (1.8% in 9M13 and
2.3% in 9M14). Therefore, we understand that the analysis of EBIT is more pertinent for the operational Company's
management.
20,7%
19,6%
19,3%
124,0
118,0
286,5
251,7
3Q13
3Q14
EBITDA (R$ MM)
9M13
9M14
EBITDA (R$ MM)
EBITDA margin (%)
16,9%
EBITDA margin (%)
Net finance result:
The net finance result compared with the same period of 2013 is shown in the table below:
(R$ thousand)
Expenses of foreign exchange hedge BM&FBOVESPA
Financing expenses
Foreign exchange losses
Other finance costs
Finance costs
3Q13
3Q14
(5,863)
(6,666)
Var.
3Q14/3Q13
9M13
9M14
Var.
9M14/9M13
13.7%
(21,323)
(9,189)
(56.9%)
27.7%
(5,694)
(6,581)
15.6%
(12,994)
(16,597)
(10,957)
(7,371)
(32.7%)
(24,754)
(26,360)
6.5%
(1,295)
(1,720)
32.8%
(3,799)
(4,470)
17.7%
(23,809)
(22,338)
(6.2%)
(62,870)
(56,616)
(9.9%)
Page 19 of 27
(R$ thousand)
3Q13
Interest received from customers
392
Gain on foreign exchange hedge - BM&FBovespa
3Q14
Var.
3Q14/3Q13
9M13
9M14
Var.
9M14/9M13
616
57.1%
1,329
1,453
9.3%
7,377
1,790
(75.7%)
16,670
10,188
(38.9%)
Income from financial investments
21,822
24,085
10.4%
61,810
71,555
15.8%
Foreign exchange gains
13,316
15,950
19.8%
31,064
30,137
(3.0%)
8,976
13,591
51.4%
25,145
35,026
39.3%
Other finance income
Finance income
454
52,337
512
56,544
12.8%
8.0%
1,679
137,697
4,325
152,684
157.6%
10.9%
Net finance result (R$ thousand)
28,528
34,206
19.9%
74,827
96,068
28.4%
Adjustment to present value
Profit:
In 9M14, profit increased 1.5% even after growing 11.4% in 9M13 and 41.9% in 9M12, always compared to the
equivalent period last year.
R$ million
3Q13
Profit
Net margin, %
3Q14
122.1
20.4%
126.0
21.0
Var.
3Q14/3Q13
3.2%
0.6 p.p.
9M13
9M14
290.6
19.6%
295.0
19.8%
20,4%
21,0%
19,6%
19,8%
122,1
126,0
290,6
295,0
3Q13
3Q14
9M13
9M14
Profit (R$ MM)
Profit (R$ MM)
Net margin (%)
Net margin (%)
Var.
9M14/9M13
1.5%
0.2 p.p.
Investments (property, plant and equipment and intangible assets)
Investments in 9M14 were focused on the maintenance of industrial buildings and facilities, replacement of
property, plant and equipment and purchase of new equipment for modernization of the plant and greater
production efficiency and investment in A3NP.
R$ million
3Q13
Total
3Q14
49.2
30.6
Var.
3Q14/3Q13
(37.8%)
9M13
103.9
9M14
96.3
Var.
9M14/9M13
(7.3%)
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 borrowings) at 9/30/2014 totaled R$ 867.6 million, an
increase of 40.8% in relation to the R$ 616.2 million at 12/31/2013 and 17.2% vs. 9/30/2013.
The proportion of net revenue accumulated in 12 months and maintained in cash and cash equivalents and
financial investments increased from 40.4% considering the scenario on 9/30/2013 to 46.1% on 9/30/2014.
The cash generated from operations of R$ 474.1 million is added to the net increase in debt with financial
institutions of R$ 17.6 million, and the result of cash is appropriated to pay investments in property, plant and
equipment and intangible assets of R$ 96.3 million; financial investments in the net amount of R$ 226.0 million, the
net purchase of treasury shares amounting to R$ 5.0 million and the payment of dividends in the amount of
R$ 182.6 million. The decrease of R$ 18.2 million of the amount maintained in current account and financial
Page 20 of 27
investments of very short term completes the amount of the appropriation. 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
1.500
990,4
983,6
1.000
500
917,7
888,4
867,4
740,5
616,3
0
(500)
1.045,8
938,5
1.010,9
876,4
841,8
867,6
734,0
(72,8)
(95,2)
(126,9)
(117,7)
(169,4)
(96,7)
(143,4)
3/31/13
6/30/13
9/30/13
12/31/13
3/31/14
6/30/14
9/30/14
Cash and cash equivalents and financial investments (ST and LT)
Borrowings (ST and LT)
Net cash
Structure of the Assets, Liabilities and Value Indicators
Assets
9/30/2013
12/31/2013
16,4%
9/30/2014
17,9%
19,3%
42,7%
35,2%
45,3%
40,8%
35,5%
46,9%
Cash and cash equivalents and financial investments
Working capital (less cash and cash equivalents and financial investments)
Non-current assets
Liabilities: Current liabilities + non-current liabilities
9/30/2013
12/31/2013
5,4%
5,0%
9,0%
85,6%
87,3%
9/30/2014
5,6%
7,7%
8,6%
85,8%
Liabilities - Financial
Liabilities - Operating
Consolidated equity
Page 21 of 27
Value indicators
17,00
11,68
7,21
4,92
3,36
1,46
Cash and cash
Net working
Book value* / per Profit per share**
equivalents and capital* / per share
share
financial
investments * / per
share
Share price*
Price* / Profit per
share**
* 9/30/2014 / ** last 12 months
Dividends
In 9M14, Grendene prepays dividends of R$ 125.4 million, 33.8% lower than the dividend distributed in 9M13
(R$ 189.4 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 9/30/2014, 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 third installment of interim dividends subject to ratification of the Annual
General Meeting that will approve the accounts for 2014, in the amount of R$ 53.4 million, equivalent to
R$ 0.17805518276 per share, less treasury shares, paid as from November 12, 2014, totaling in the nine months of
2014 a prepayment of R$ 125.4 million.
The holders of record of common shares GRND3 on October 30, 2014 (cut-off date) will be entitled to such
dividends. Therefore, Grendene's shares (GRND3) will be traded ex-dividend as from October 31, 2014 on the
BM&FBovespa.
Basis for distribution of dividends for 9M14
Parent Company Information - GRENDENE
R$
294,951,490.92
(162,996,833.44)
(6,597,732.88)
125,356,924.60
Tax incentives
Transfer to legal reserve
Dividend calculation basis for the period ended September 30, 2014
Date of
approval
Ex-dividend date
Payment
beginning date
1
4/24/2014
4/30/2014
5/14/2014
42,063,777.28
0.14006319020
1
7/24/2014
8/1/2014
8/13/2014
29,865,909.18
0.09944695385
1
10/23/2014
10/31/2014
11/12/2014
53,427,238.14
0.17805518276
125,356,924.60
0.41756532681
Resolutions
1st advance payment - 1Q14
2nd advance payment - 2Q14
3rd advance payment - 3Q14
Sum
Total amount of
dividend R$
Dividend per share
R$
1
R$ 0,4400
R$ 0,6260
R$ 0,6300
R$ 0,4176
R$ 0,2350
74,9%
75,0%
%
R$ per share
Dividends approved "ad referendum" of the stockholders Annual General Meeting that will examine the balance sheets and the financial
statements for 2014.
67,5%
43,5%
37,9%
3,8%
6,7%
8,1%
4,2%
2,8%
9M10
9M11
9M12
9M13
9M14
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 22 of 27
Corporate Events
7/24/2014 - Notice to stockholders: On August 13, 2014, the Company started the second advance payment of
dividends, relating to 2014, in the amount of R$ 29,865,909.18 corresponding to R$ 0.0994 per common share.
The shares were traded ex-dividend beginning on 8/1/2014.
10/23/2014 - Meeting of the Board of Directors: The members of the Board of Directors approved the financial
information relating to the third quarter and accumulated nine months of 2014; the third advance payment of
interim dividends in the amount of R$ 53,427,238.14 corresponding to R$ 0.17805518276 per common share,
less treasury shares, based on the results obtained up to 9/30/2014, which are subject to ratification at the Annual
General Meeting that will examine the balance sheet accounts and the financial statements for 2014.
10/23/2014 – Relevant Event: Grendene’s Executive Board approved the execution of a licensing contract to
use the brands “Azaleia” and “Dijean” owned by Vulcabras|azaleia – CE, Calçados e Artigos Esportivos S.A.
and Vulcabras|azaleia – RS, Calçados e Artigos Esportivos S.A., both subsidiaries of Vulcabras|azaleia S.A.,
related parties, to production and sales of women’s footwear in general for a period of 3 (three) years and that may
be renewed for an additional period of 3 (three) years.
Capital Markets
In the first nine months of 2014, the share of Grendene (GRND3) devalued 2.0% considering the reinvestment of
the dividends and in the same period IBOVESPA index valued 5.0%. The daily average financial volume was
R$ 6.0 million in 9M14 (R$ 9.3 million in 9M13).
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$
Period
Trading
sessions
Number of Number of
businesses
shares
Average volume R$
Volume R$
Weighted
average
Closing
Per
business
Daily
Per
business
Daily
9M13
187
300,246
85,408,800 1,736,592,300
20.33
19.74
284
456,731
5,783
9,286,589
9M14
186
268,732
74,806,700 1,111,974,767
14.86
17.00
278
402,187
4,137
5,978,358
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
3/31/14
Daily financial volume - R$
4/30/14
5/31/14
6/30/14
7/31/14
GRND3 - with reinvest. dividends
8/31/14
0
9/30/14
Basis 100 = 12/31/2013
Financial volume - R$ million
Daily financial volume and GRND3 x IBOVESPA
Ibovespa
Page 23 of 27
Appendix I - Gross revenue, volume, average price and analysis by market
Gross sales revenue
(R$ thousand)
1Q12
2Q12
3Q12
4Q12
1Q13
2Q13
3Q13
4Q13
1Q14
2Q14
3Q14
Domestic market
377,782
322,941
528,725
615,954
475,268
404,256
595,605
671,789
447,640
385,843
590,822
Exports
117,661
89,697
84,290
187,400
128,303
100,458
143,395
192,289
167,776
102,902
139,270
66,558
45,686
41,548
91,039
64,289
48,530
62,664
84,467
70,971
46,150
Total
495,443
412,638
613,015
803,354
603,571
504,714
739,000
864,078
615,416
Volume (thousands of pairs)
1Q12
2Q12
3Q12
4Q12
1Q13
2Q13
3Q13
4Q13
1Q14
Export - US$
Var.
3Q14/3Q13
Var.
9M14/9M13
9M13
9M14
(0.8%)
1,475,129
1,424,305
(3.4%)
(2.9%)
372,156
409,948
10.2%
61,213
(2.3%)
175,710
179,045
1.9%
488,745
730,092
(1.2%)
1,847,285
1,834,253
(0.7%)
2Q14
3Q14
9M13
9M14
Var.
3Q14/3Q13
Var.
9M14/9M13
Domestic market
26,510
25,009
38,702
49,500
37,497
30,986
43,188
53,996
30,935
27,685
43,457
0.6%
111,671
102,077
Exports
14,244
7,796
8,796
14,510
15,063
9,662
10,930
14,873
15,780
9,144
11,395
4.3%
35,655
36,319
1.9%
Total
40,754
32,805
47,498
64,010
52,560
40,648
54,118
68,869
46,715
36,829
54,852
1.4%
147,326
138,396
(6.1%)
Average price (R$)
Domestic market
1Q12
2Q12
3Q12
4Q12
1Q13
2Q13
3Q13
4Q13
1Q14
2Q14
3Q14
Var.
3Q14/3Q13
9M13
(8.6%)
Var.
9M14/9M13
9M14
14.25
12.91
13.66
12.44
12.67
13.05
13.79
12.44
14.47
13.94
13.60
(1.4%)
13.21
13.95
5.6%
Exports
8.26
11.51
9.58
12.92
8.52
10.40
13.12
12.93
10.63
11.25
12.22
(6.9%)
10.44
11.29
8.1%
Export (US$)
4.67
5.86
4.72
6.28
4.27
5.02
5.73
5.68
4.50
5.05
5.37
(6.3%)
4.93
4.93
-
12.16
12.58
12.91
12.55
11.48
12.42
13.66
12.55
13.17
13.27
13.31
(2.6%)
12.54
13.25
5.7%
Total
U.S. dollar
1Q12
2Q12
3Q12
4Q12
1Q13
2Q13
3Q13
4Q13
1Q14
2Q14
3Q14
Var.
3Q14/3Q13
9M13
Var.
9M14/9M13
9M14
Final U.S. Dollar
1.8221
2.0213
2.0306
2.0435
2.0138
2.2156
2.2300
2.3426
2.2630
2.2025
2.4510
9.9%
2.2300
2.4510
9.9%
Average U.S. Dollar
1.7678
1.9633
2.0287
2.0585
1.9957
2.0700
2.2883
2.2765
2.3640
2.2297
2.2752
(0.6%)
2.1180
2.2896
8.1%
Analysis by market
Gross sales revenue
Domestic market
Exports
Total
1Q12
76.3%
2Q12
78.3%
3Q12
86.2%
4Q12
76.7%
1Q13
78.7%
2Q13
80.1%
3Q13
80.6%
4Q13
77.7%
1Q14
72.7%
2Q14
78.9%
3Q14
80.9%
9M13
79.9%
9M14
77.7%
23.7%
21.7%
13.8%
23.3%
21.3%
19.9%
19.4%
22.3%
27.3%
21.1%
19.1%
20.1%
22.3%
100.0%
100.0%
100.0%
100.0%
100.0%
100.0%
100.0%
100.0%
100.0%
100.0%
100.0%
100.0%
100.0%
Analysis by market
Sales volume
1Q12
2Q12
3Q12
4Q12
1Q13
2Q13
3Q13
4Q13
1Q14
2Q14
3Q14
9M13
9M14
Domestic market
65.0%
76.2%
81.5%
77.3%
71.3%
76.2%
79.8%
78.4%
66.2%
75.2%
79.2%
75.8%
73.8%
Exports
35.0%
23.8%
18.5%
22.7%
28.7%
23.8%
20.2%
21.6%
33.8%
24.8%
20.8%
24.2%
26.2%
100.0%
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 24 of 27
Appendix II - Consolidated Balance Sheet under IFRS (all amounts in thousands of reais)
Assets
Current assets
Cash and cash equivalents
Vertical
Analysis
12/31/2013
1,694,062
Vertical
Analysis
9/30/2014
71.5%
1,786,477
Horizontal
Analysis
70.3%
105.5%
39,360
1.7%
21,130
0.8%
53.7%
392,665
16.6%
666,176
26.2%
169.7%
Securities at fair value through profit or loss
119,548
5.0%
361,500
14.2%
302.4%
Held-to-maturity investments
111.6%
Financial investments
273,117
11.5%
304,676
12.0%
Trade receivables
900,048
38.0%
748,772
29.5%
83.2%
Inventories
205,724
8.7%
259,108
10.2%
125.9%
Tax credits
22,031
0.9%
15,793
0.6%
71.7%
1,704
0.1%
4,125
0.2%
242.1%
69,819
2.9%
25,836
1.0%
37.0%
1,210
0.1%
12,887
0.5%
1,065.0%
Income tax and social contribution recoverable
Securities receivable
Costs and prepaid expenses
Other receivables
61,501
2.6%
32,650
1.3%
53.1%
Non-current assets
675,280
28.5%
754,377
29.7%
111.7%
324,469
13.7%
343,988
13.5%
106.0%
301,940
12.7%
323,633
12.7%
107.2%
301,940
12.7%
323,633
12.7%
107.2%
2,454
0.1%
1,921
0.1%
78.3%
Tax credits
563
-
600
-
106.6%
Securities receivable
288
-
70
-
24.3%
15,656
0.7%
14,098
0.6%
90.0%
3,568
0.2%
3,666
0.1%
102.7%
877
-
877
-
100.0%
315,087
13.3%
360,829
14.2%
114.5%
Long-term receivables
Held-to-maturity investments
Judicial deposits
Deferred income tax and social contribution
Prepaid expenses
Investments
Property, plant and equipment
Intangible assets
Total assets
Liabilities and equity
Current liabilities
34,847
1.5%
48,683
1.9%
139.7%
2,369,342
100.0%
2,540,854
100.0%
107.2%
Vertical
Analysis
12/31/2013
9/30/2014
Vertical
Analysis
Horizontal
Analysis
285,066
12.0%
307,395
12.1%
107.8%
101,909
4.3%
90,184
3.5%
88.5%
Trade payables
39,792
1.7%
47,485
1.9%
119.3%
Contractual obligations - Licensing
16,862
0.7%
17,504
0.7%
103.8%
Commissions payable
39,078
1.6%
34,509
1.4%
88.3%
Taxes and contributions
12,683
0.5%
23,743
0.9%
187.2%
4,272
0.2%
6,826
0.3%
159.8%
63,756
2.7%
78,644
3.1%
123.4%
Provision for labor risks
1,838
0.1%
1,268
-
69.0%
Other payables
4,876
0.2%
7,232
0.3%
148.3%
16,316
0.7%
53,383
2.1%
327.2%
15,827
0.7%
53,205
2.1%
336.2%
489
-
178
-
36.4%
2,067,960
87.3%
2,180,076
85.8%
105.4%
2,060,734
87.0%
2,167,904
85.3%
105.2%
1,231,302
52.0%
1,231,302
48.5%
100.0%
(4,470)
(0.2%)
(7,176)
(0.3%)
160.5%
5,078
0.2%
4,869
0.2%
95.9%
Borrowings
Income tax and social contribution payable
Salaries and social security charges payable
Non-current liabilities
Borrowings
Consolidated equity
Controlling interests
Share capital
Carrying value adjustments
Capital reserves
Revenue reserves
839,294
35.4%
896,323
35.3%
106.8%
Treasury shares
(10,470)
(0.4%)
(10,841)
(0.4%)
103.5%
-
-
53,427
2.1%
-
Retained earnings
Total liabilities and equity
7,226
0.3%
12,172
0.5%
168.4%
2,369,342
100.0%
2,540,854
100.0%
107.2%
Page 25 of 27
Appendix III - Consolidated Statement of Income (all amounts in thousands of reais)
R$ thousand
3Q13
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 expenses
Selling 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
595,605
143,395
739,000
(106,044)
(34,757)
(140,801)
598,199
(316,992)
281,207
(166,625)
(146,927)
(21,344)
2,247
(601)
114,582
52,337
(23,809)
28,528
143,110
Vertical
Analysis
99.6%
24.0%
123.5%
(17.7%)
(5.8%)
(23.5%)
100.0%
(53.0%)
47.0%
(27.9%)
(24.6%)
(3.6%)
0.4%
(0.1%)
19.2%
8.7%
(4.0%)
4.8%
23.9%
(17,700)
(3,611)
294
122,093
9,442
124,024
(3.0%)
(0.6%)
20.4%
1.6%
20.7%
R$ thousand
9M13
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
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
1,475,129
372,156
1,847,285
(272,109)
(90,057)
(362,166)
1,485,119
(813,571)
671,548
(411,723)
(356,788)
(58,768)
7,488
(3,655)
259,825
137,697
(62,870)
74,827
334,652
99.3%
25.1%
124.4%
(18.3%)
(6.1%)
(24.4%)
100.0%
(54.8%)
45.2%
(27.7%)
(24.0%)
(4.0%)
0.5%
(0.2%)
17.5%
9.3%
(4.3%)
5.0%
22.5%
1,424,305
409,948
1,834,253
(269,166)
(73,056)
(342,222)
1,492,031
(836,739)
655,292
(438,222)
(369,076)
(66,668)
5,499
(7,977)
(32,994)
(11,614)
581
290,625
(2.2%)
(0.8%)
19.6%
26,650
286,475
1.8%
19.3%
(24,491)
2,194
4,110
294,951
34,588
251,658
Vertical
Analysis
590,822
139,270
730,092
(101,448)
(27,421)
(128,869)
601,223
(314,664)
286,559
(180,801)
(155,506)
(25,186)
1,422
(1,531)
105,758
56,544
(22,338)
34,206
139,964
Vertical
Analysis
98.3%
23.2%
121.4%
(16.9%)
(4.6%)
(21.4%)
100.0%
(52.3%)
47.7%
(30.1%)
(25.9%)
(4.2%)
0.2%
(0.3%)
17.6%
9.4%
(3.7%)
5.7%
23.3%
Var. %
3Q14/3Q13
(0.8%)
(2.9%)
(1.2%)
(4.3%)
(21.1%)
(8.5%)
0.5%
(0.7%)
1.9%
8.5%
5.8%
18.0%
(36.7%)
154.7%
(7.7%)
8.0%
(6.2%)
19.9%
(2.2%)
(14,924)
424
541
126,005
12,284
118,042
(2.5%)
0.1%
0.1%
21.0%
2.0%
19.6%
(15.7%)
(111.7%)
84.0%
3.2%
30.1%
(4.8%)
Vertical
Analysis
95.5%
27.5%
122.9%
(18.0%)
(4.9%)
(22.9%)
100.0%
(56.1%)
43.9%
(29.4%)
(24.7%)
(4.5%)
0.4%
(0.5%)
14.5%
10.2%
(3.8%)
Var. %
9M14/9M13
(3.4%)
10.2%
(0.7%)
(1.1%)
(18.9%)
(5.5%)
0.5%
2.8%
(2.4%)
6.4%
3.4%
13.4%
(26.6%)
118.2%
(16.5%)
10.9%
(9.9%)
6.4%
21.0%
28.4%
(6.4%)
(1.6%)
0.1%
0.3%
19.8%
2.3%
16.9%
(25.8%)
(118.9%)
607.4%
1.5%
29.8%
(12.2%)
3Q14
9M14
217,070
152,684
(56,616)
96,068
313,138
Page 26 of 27
Appendix IV - Consolidated Statement of Cash Flows (all amounts in thousands of reais)
Statement of cash flows
9/30/2013
9/30/2014
Cash flows from operating activities
290,625
294,951
3,859
4,946
Adjustments to reconcile profit to cash from operating activities:
Carrying value adjustments
185
(2,706)
26,650
34,588
Deferred income tax and social contribution
11,625
1,558
3,032
1,839
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
76
959
3,354
2,492
(15,807)
(1)
(1,402)
(14,806)
268
3,943
(431)
(881)
Interest expenses on borrowings
7,484
10,206
(59,437)
(69,222)
5,251
(2,784)
275,332
265,082
Interest income on financial investments
Foreign exchange variations, net
Changes in assets and liabilities:
Trade receivables
Inventories
Other receivables
73,180
166,083
(67,367)
(57,327)
9,979
65,590
Trade payables
(8,159)
7,693
Salaries and social security charges payable
26,543
14,888
Taxes and contributions
Income tax and social contribution payable
Other payables
8,107
(8,838)
(4,454)
11,060
2,554
(1,571)
Net cash provided by operating activities
304,323
474,052
In property, plant and equipment
(91,140)
(75,923)
In intangible assets
(17,084)
(20,418)
(1,380,099)
(1,786,570)
1,388,774
1,504,217
76,120
56,371
(23,429)
(322,323)
Cash flows from investing activities:
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
Treasury shares sold
487,620
310,076
(506,918)
(277,233)
(5,349)
(15,235)
(210,806)
(182,595)
(49,718)
(9,471)
22,799
4,115
-
384
(262,372)
(169,959)
18,522
(18,230)
At the beginning of the period
14,489
39,360
At the end of the period
33,011
21,130
18,522
(18,230)
Net cash used in financing activities
Increase (decrease) in cash and cash equivalents
Changes in cash and cash equivalents
Increase (decrease) in cash and cash equivalents
Page 27 of 27

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

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