slide presentation 1 q09
TRANSCRIPT
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Disclaimer
This presentation contains forward-looking statements regarding the prospects of thebusiness, estimates for operating and financial results, and those regarding Cia. Hering'sgrowth prospects. These are merely projections and, as such, are based exclusively onthe expectations of Cia. Hering management concerning the future of the business andits continued access to capital to fund the Company’s business plan. Such forward-looking statements depend, substantially, on changes in market conditions, governmentregulations, competitive pressures, the performance of the Brazilian economy and theindustry, among other factors and risks disclosed in Cia. Hering’s filed disclosuredocuments and are, therefore, subject to change without prior notice.
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AGENDA:AGENDA:AGENDA:AGENDA:
• Highlights• Operating Performance• Operating Performance• Business Strategy and Outlook
1Q09 Highlights
CIA. HERING ENDS UP 1Q09 WITH GROWTH
• Gross revenue in domestic market increased 42.6%
• Hering brand sales rose 48.3%
• Same-store sales growth of 19.0% in the Hering Stores
• EBITDA Margin of 15.2%
CONTINUED GROWTH PLAN
• 1 Hering Store opened in the 1Q09
• Marketing campaign “eu uso Hering desde sempre” with new cel ebrities
• Actions focused on store operating performance optimizati on
• 2 PUC stores opened in the new architectural project
SUSTAINABLE GROWTH
• Capex of R$ 6.5 million
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AGENDA:AGENDA:AGENDA:AGENDA:
• Highlights
• Operating Performance• Operating Performance• Business Strategy and Outlook
By Market
Gross Revenue (R$ million)
Foreign Market
10.0
4.9
50.5%
35.2%125.2
169.2
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Domestic Market
164.3
115.2
1Q08 1Q09
42.6%
Domestic Market represented 97.1% of the total gross reve nue in the 1Q09.
11.24.3
164.342.6% 164.342.6%
Gross Revenue – Domestic Market (R$ million)
PUC
dzarmOthers
Multi -
By Brand By Distribution Channel
89.3
132.5
16.3
12.610.72.6
1Q08 1Q09
48.3%
29.9%
4.3%115.2
84.355.3
80.0
59.9
1Q08 1Q09
115.2
52.4%
33.6%
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Hering
Franchise/Own Store
Multi -Brand
Relevant franchise and owned stores growth in the domestic market.
50.5%10.0
3.0
10.0
Private Label vs. Own Brands By Destination
Private
Gross Revenue – Foreign Market (R$ million)
4.9 4.9
5.1
1Q08 1Q09
1.8%
4.9
0.31.0 1.1
0.4
1.0
3.3
4.7
3.0
1Q08 1Q09
4.9
8
North America
MercosulEurope
Others
Latin America
Private Label
Own Brands
Own brands are the focus on exports, specially for Latin A merica.
41.6%42.2%
8 0
1 00
1 2 0
0 .3
0 .3 5
0 .4
0 .4 5-0.5p.p
15.2%14.3%
8 0
1 00
1 2 0
0 .1
0 .1 2
0 .1 4
0 .1 6
0.9 p.p
Gross Profit and EBITDA (R$ million)
Gross Profit (R$ million) andGross Margin (%) EBITDA (R$ million) and EBITDA Margin (%)
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43.657.2
0
2 0
4 0
6 0
1Q08 1Q09
0
0 .05
0 .1
0 .1 5
0 .2
0 .2 5
31.0%
14.8 20.80
2 0
4 0
6 0
1Q08 1Q09
0
0 .02
0 .04
0 .06
0 .08
0 .1
41.2%
Excluding the AVP, the gross margin would reach 42.4% in t he 1Q09.The higher EBITDA margin is due to the increase of the dome stic marketrevenue and the dilution of the operational expenses.
Stores Distribution
1 franchise Hering Store and 2 PUC Stores were opened in thequarter and we have 122 Hering Stores and 8 PUC Stores in the
respective new archictetural project.10
Expansion Plan
Hering Store Expansion
226274
151181
230268
325
182
231
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* estimated
10 25 37 42 51 25 37
141
193226
157194
156
2006 2007 2008 2009* 2010* 1Q08 1Q09
Owned Stores Franchises
The remodeling of the owned stores is the priority for 2009 .The goal of 325 stores is kept for 2010.
Goal:172
Goal:57
Goal:224
Distribution Network Evolution
Distribution Network (number of stores)
5967
75
23
22
22
23
209248
311
423
357
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Goal:172Goal:224
Goal of 38 Hering Stores and 8 PUC stores opening for 200 9.
151 181230
26832539
192344
2006 2007 2008 2009* 2010*
Hering PUC Abroad
209
Expansion Plan 2009 – Franchise
Status
1Q09
1 Franchise opened
2Q09
11 Franchises forecasted
Period State City Location Status
1Q09 SP São Paulo Rua São Bento Opened
2Q09 SP Bauru Bauru Shopping Forecasted
2Q09 AM Manaus Shopping Manauara U.C. Forecasted
2Q09 CE Fortaleza Shopping Via Sul Forecasted
2Q09 DF Taguatinga Shopping Taguatinga Forecasted
2Q09 RS Caxias Do Sul Shopping Iguatemi Forecasted
2Q09 RS Pelotas Galeria Malcom Forecasted
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11 Franchises forecasted2Q09 RS Pelotas Galeria Malcom Forecasted
2Q09 SP São Paulo Rua Damasceno Vieira Forecasted
2Q09 SP Diadema Shopping Praça Da Moça U.C. Forecasted
2Q09 SP São B.do Campo Rua Joao Pessoa Forecasted
2Q09 SP Itatiba Rua Rui Barbosa Forecasted
2Q09 SP Araraquara Centro Forecasted
Expansion Plan 2009 – Franchise
Status
3Q09
10 Franchises forecasted
4Q09
11 Franchises forecasted
Period State City Location Status
3Q09 PB Petrolina Shopping River / Rua Forecasted
3Q09 PR Maringa Shopping Catuaí U.C. Forecasted
3Q09 SC Lages Rua Forecasted
3Q09 SP Spaulo / Ribeirão Preto Novo Shopping Ribeirão Forecasted
3Q09 SP São Paulo Rua Cardoso De Almeida Forecasted
3Q09 MG Varginha Rua Forecasted
3Q09 RJ Cabo Frio Rua Forecasted
3Q09 SP Sorocaba Shopping Villagio Forecasted
3Q09 SP São Paulo Tatuapé (Rua) Forecasted
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3Q09 SP São Paulo Tatuapé (Rua) Forecasted
4Q09 BA Salvador Shopping Paralela Forecasted
4Q09 DF Brasilia Shopping Iguatemi Forecasted
4Q09 PA Belem Doca Boulevard Forecasted
4Q09 RS Canoas Shopping Canoas Forecasted
4Q09 SP Bertioga Centro Forecasted
4Q09 SP São Paulo Av. Cantareira Forecasted
4Q09 SP Sto Andre Rua Das Figueiras Forecasted
4Q09 SP Guarulhos Centro (Rua) Forecasted
4Q09 RJ Rio De Janeiro Shopping Botafogo Forecasted
4Q09 SP Jundiai Centro (R Barao De Jundiai) Forecasted
4Q09 SP Campinas Rua Cel. Quirino Forecasted
4Q09 PE Recife Centro, Rua Nova Forecasted
Expansion Plan 2009 – Own Stores
Status
2Q09
3 Stores forecasted
3Q09
1 Store forecasted
Period State City Location Status
2Q09 SP Itupeva Premium Outlet São Paulo Forecasted
2Q09 SP Osasco Shopping União Osasco Forecasted
2Q09 SP São Paulo Avenida Paulista Forecasted
3Q09 RJ Niteroi Rua Moreira Cesar Forecasted
4Q09 SP São Paulo Metro Tucuruvi Forecasted
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1 Store forecasted
4Q09
1 Store forecasted
Hering Store Indicators
Hering Store Performance 1Q08 1Q09 Var.
Number of Stores 182 231 26.9%
Franchise 157 194 23.6%
Own 25 37 48.0%
Sales (R$ thousand) 68,652 96,457 40.5%
Same Store Sales growth 39.9% 19.0% -20.9 p.p.
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Same store sale growth of 19.0%
Same Store Sales growth 39.9% 19.0% -20.9 p.p.
Sales Area (m²) 24,399 29,893 22.5%
Sales (R$ per m²) 2,826 3,240 14.6%
Check-Outs 915,577 1,274,257 39.2%
Units 2,150,542 2,899,517 34.8%
Average Sales Ticket (R$) 75.00 75.70 0.9%
IT
Other
By activity
Capex (R$ million)
0.8 0.1
29.3% 6.5
5.0
Industry
Stores
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1.12.32.0
3.21.6
0.3
1Q08 1Q09
15.0%
190.9%
50.0%
Investments in the industry with the ampliation and update of theunits, including the new one in Parnamirim - RN
Indebtedness Evolution Short Term x Long Term
Indebteness
Short Term55%
201.3
184.6
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Long Term45%
Total Debt in 03/31/09 = R$ 116.2 million
* Last 12 months EBITDA
Net Debt/EBITDA*
Net Debt (R$ million)
-33.4
11.0
-17.3
4.63.5
-0.70.1
-0.2
2005 2006 2007 2008 1Q09
Financial Result
• Positive Financial Result
- On 03/31/09, Cia. Hering registered a revenue of R$ 22.4 million due to thereversal of part of the expense accrued at the end of 2008, referring to the fair
R$ thousand 1Q08 1Q09 Var.
Net Financial Revenues (Expenses) (1,222) (1,098) -10.1%
Net Financial Derivative Instruments Results - 22,038 -
Total Financial Revenues (Expenses) (1,222) 20,940 -1813.6%
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reversal of part of the expense accrued at the end of 2008, referring to the fairvalue of derivatives.
• Swap with 19 dollar verifications (April/09 to Oct/10)
– April/09 and May/09 verifications: exchange rate lower than R$/USD 2.80
– On 05/04/09, Cia. Hering renegotiated the contract, eliminating nine monthlyverifications, from June/09 up to Feb/10 (included), at a R$ 3.1 million cost.
• The Company will remain searching alternatives to minimize and/or to eliminate theexchange risk of the remaining derivatives operations.
Payment to Shareholders
Dividends
� The payment of dividends amounting to R$ 10.6 million (R$ 0.1 9616/share),
related to the year ended on December 31, 2008, was proposed a nd approved
at the General Shareholders’ Meeting held on April 28, 2009.
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at the General Shareholders’ Meeting held on April 28, 2009.
AGENDA:AGENDA:AGENDA:AGENDA:
• Highlights• Operating Performance
• Business Strategy and Outlook
Strategy & Outlook
Hering Store chain
� Continue expansion plan – 325 stores by the end of 2010
� Maximize operation performance
– Store space allocation review and optimization
– Automatic replenishment for basic items
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– Fast response for best sellers and continuous promotional s ales for slow movers
� Promote the Hering Store credit card
Marketing campaign “eu uso Hering porque”
Opening of PUC Stores in the new architectural project
Implementation of dzarm. relaunching plan
InvestorInvestor RelationsRelations
Fabio Hering Fabio Hering –– PresidentPresident andand IR IR DirectorDirectorFrederico de Aguiar Oldani Frederico de Aguiar Oldani –– Financial Financial DirectorDirectorKarina Koerich Karina Koerich –– IR ManagerIR ManagerGracila Camargo Lopes Gracila Camargo Lopes –– IR IR AnalystAnalyst
Tel.: +55 (47) 3321Tel.: +55 (47) 3321--3469 3469 EE--mailmail: [email protected]: [email protected]: www.ciahering.com.br/ir: www.ciahering.com.br/ir
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Investor Relations Consulting Firm
FIRB – Financial Investor Relations Brasil
Ligia Montagnani – IR Consultant
Tel: +55 (11) 3897-6857
E-mail: [email protected]