| Apresentação do Institutional Presentation...

| Apresentação do Roadshow

1

Institutional PresentationAs of 3Q17

November 2017

Statements regarding the Company’s future business perspectives and projections of operational and

financial results are merely estimates and projections, and as such they are subject to different risks and

uncertainties, including, but not limited to, market conditions, domestic and foreign performance in general

and in the Company’s line of business.

These risks and uncertainties cannot be controlled or sufficiently predicted by the Company management

and may significantly affect its perspectives, estimates, and projections. Statements on future

perspectives, estimates, and projections do not represent and should not be construed as a guarantee of

performance. The operational information contained herein, as well as information not directly derived from

the financial statements, have not been subject to a special review by the Company’s independent

auditors and may involve premises and estimates adopted by the management.

2

Disclaimer

| Company overview

Platform of brands of reference

Arezzo&Co is the leading Company in the footwear and accessories industry through its platform of Top of Mind brands

1

4

Company overview

Arezzo&Co is the reference in the Brazilian retail sector and has a unique positioning combining growth with high cash generation

1

51. 3Q17 LTM

2. Refers to the Brazilian women footwear market (source: Company estimates). Estimated for 2016.

Leading company

in the footwear

and accessories

industry with

presence in all

Brazilian states

Controlling

shareholders are

reference in the

sector

Development of

collections with

efficient supply

chain

Asset light: high

operational

efficiency

Strong cash

generation and

high growth

11.6 million pairs of shoes (1)

1,244 thousand handbags (1)

2,289 points of sale

12% market share (2)

More than 45 years of

experience in the sector

Wide recognition

~11,500 models created

per year

Lead time of 40 days

15 to 18 launches per year

90.7% outsourced

sdproduction

ROIC of 23.9% in 3Q17

2,355 employees

Net revenues CAGR:

10.5% (2011-2016)

Net Profit CAGR: 4.0%

(2011- 2016)

Increased operating

leverage

Founded in 1972

Focused on brand and

product

Consolidation of industrial

business model located in

Minas Gerais

1.5 mm pairs per year

and 2,000 employees

Focus on retail

R&D and production

outsourcing on Vale dos Sinos

- RS

Franchises expansion

Specific brands for each

segment

Expansion of distribution

channels

Efficient supply chain

First store

Fast Fashion

concept

Launch of the

first design with

national success

+

Schutz launch

Launch of

new brands

Merger

Commercial operations

centralized in São Paulo

Strategic Partnership

(November 2007)

Industry ReferenceFoundation and structuring Industrial Era Corporate EraRetail Era

2011 – 2017 70’s 80’s 90’s 00’s

Opening of the first

shoe factory

Opening of the flagship

store at Oscar Freire

Successful track record of

entrepreneurship

The right changes at the right time accelerated the Company's development1

Consolidate

leadership

position

Initial Public Offering

(February 2011)

6

Shareholder structure

1. Arezzo&Co capital stock is composed of 89,765,882 common shares, all nominative, book-entry shares with no par value

2. Shareholder structure as of September 2017

3. Includes Stock Options plan7

51.4% 48.6%

Birman family Float

1Management²Others

40.6%

Aberdeen

8.0% 0.0%

8

Culture & Management

101 That which cannot be transparent should not be done.

02 Always be true, so that at any point you are not false in your job. Always be authentic.

03 Clearly negotiate your goals and responsibilities, and consider achievement as a requirement for

continuity and prosperity.

04 Do not uncover problems only. Blaming others will never be the solution. Take risks, propose

solutions. In case of doubt, act!

05 Formalize everything, even if in an informal way.

06 Always be flexible. Be ready for changes.

07 Goals met are, at least, the basis for the next goal.

08 United we stand! Divergences are constructive, conflicts are destructive.

09 A humble stance: the key to our success.

10 Enjoy. Appreciate. Get involved. And always be happy!

Principles of success at Arezzo&Co:

2154

Foundation 1972 1995 2008 2009 2015

Brands profile

Trendy

New

Easy to use

Eclectic

Fashion

Up to date

Bold

Provocative

Pop

Flat shoes

Affordable

Colorful

Design

Exclusivity

Identity

Seduction

Casual

Young

Urban

Modern

Female target

market16 – 60 years 18 – 40 years 12 – 60 years 20 – 45 years 15 – 30 years

% Web Gross

RevenueR$55.5MM (6%) R$57.3MM (10%) R$8.7MM (6%) R$0.8MM (2%) R$1.5MM (9%)

Retail price

pointR$190 / pair R$330 / pair R$110 / pair R$960 / pair R$248 / pair

Sales

Volume3 R$874MM R$557MM R$149MM R$50MM R$17MM

% Gross

Revenues4 53.1% 33.8% 9.1% 3.0% 1.0%

Strong platform of brands

Strong platform of brands, aimed at specific target markets, enables the Company to capture growth from different income segments

1D

istr

ibu

tio

n

ch

an

nel1 POS 1

9

% gross

rev.2

O F MB EX

15

65%14%

75

2%

22 62

16% 29%27% 18%

4 89

46% 36%10%

19

2%

O MB EX

4

4%28%

44

66%

20

O MB EX

4

53%38%

2

0%

296136

O F MB EX O F MB EX

1,136369

13%

1,200 1,201

Notes:1. Points of sales (LTM); O = Owned Stores; F = Franchised Stores; MB = Multi-brand Stores; EX = Exports (including US and ROW wholesalers).

2. % of each brand gross revenues (LTM) does not include other revenues (not generated by any of the 5 brands).

3. Gross revenues LTM, including external market; does not include other revenues (not generated by any of the 5 brands).

4. % of Company’s total gross revenues LTM.

Multiple distribution channels

1

10

Flexible platform through different distribution channels with specific strategies, maximizing the Company's profitability

49 owned stores in

Brazil

2,289 multibrand¹

clients in more than

1,220 cities

520 franchises in

more than 220 cities

in Brazil

Broad distribution

network throughout

Brazil

Gross Revenue Breakdown by Channel – (R$ mm)²

1. Without store overlap between brands

2. Last twelve months

44.4% 20.4% 18.3% 7.5% 0.2% 9.2% 100%

733

337

302 124 3

152 1,650

Franchises Multibrand Owned Stores Web commerce Other External Market Total

| Business model

Management

BRANDS OF REFERENCE

Customer focus: we are at the forefront of Brazilian women fashion and design

Multi-channelSourcing & LogisticsCommunication &

Marketing

SEASONED

MANAGEMENT

TEAM WITH

PERFORMANCE

BASED INCENTIVES

NATIONWIDE

DISTRIBUTION

STRATEGY

EFFICIENT

SUPPLY CHAIN

SOLID MARKETING

AND

COMMUNICATION

PROGRAM

ABILITY TO

INNOVATE

R&D

1 4 5

12

Unique business model in Brazil

enhanced by…. 2

2 3

Ability to Innovate

We produce 15 to 18 collections per year2I. Research

Creation: 11,500 SKUs / year

II. Development III. Sourcing IV. Delivery

Arezzo&Co fulfills the various aspirations of women, delivering on average 5 new models at the stores per day, allowing for consistent desire-driven purchases

Available for selection:

63% of SKUs created / year

13

Stores:52% of SKUs created /

year

Creation

Launch

Orders

Production

Delivery

Normal sale

Discount sale

Winter I Winter II Winter III Summer I Summer II Summer III Summer IV

Activities JAN FEV MAR APR MAY JUN JUL AUG SEP OCT NOV DEC

CRM – VIP sales

In-store events – PA

Stylists Fashion Advisors

Broad media plan

2

14

Each brand has an integrated and expressive communication strategy, from the creation of

campaigns to the point of sales

Strong presence in printed media

Digital communication

Presence in electronic media and television

Demi Moore

Seasonal showroom in Los Angeles near

the Red Carpet Season

Celebrity Endorsement Marketing Events

+2.2 million accesses to site/month

+180k monthly access to Schutz’s Blog

Average navigation time: 8 minutes

Gisele Bündchen Blake Lively

1 Source: Indexsocial/ Agência Espalhe, 2013

Over 6 million followers/ fans: Facebook,

Instagram and Twitter (all 4 Brands)

Arezzo is leader in interactions1

Stores constantly modified to incorporate the concept of each new collection, creating desire-driven purchases

Communication & marketing program

reflected in every aspect of the stores2

15

All visual communication at stores is monitored and updated simultaneously throughout Brazilfor each new collection

Flagship storesStore layout & visual merchandising

POS materials (catalogs, packaging, and others)

15

Distinguished storefront

Atmosphere of stores: differentiated

concepts for each brand2

16

Video Wall

Closet Essentials

Niches and lighting

Jackets and accessories

Campaigns and marketing

actions

Preeminence for products

Differentiated products

Display of a large variety of

products

Inventory at the sales area:

lower necessity of space for

storage

Atmosphere of a jewelry

store

Private shop experience

Focus on exclusivity, design

and highly selected materials

Wall display

Combos

Each theme is disposed in different niches

Accessories

Sophisticated lightingStorage

Iguatemi Faria Lima - SP

Shelves, Niches and Suspended shelves

Visual merchandising:

Window related to the

brand’s “ZZ” symbol

To increase in 50% the

number of models exposed

Products highlighted in the

center of the stores

Lights that highlighting the

product

A better distribution of the

furniture offers more

comfort for clients

Suspended Shelves

Experimental and creative

space

Interaction with the customer

Collaborative experience (in-

store office)

Experimental and creative

Oscar Freire St 1128

Large distribution network and scale of

store chain2

17

BrandAverage

size (m2)

Net Revenue/m2

(R$ 000s)

Total

Stores1

69 32 562

140 16 644

1,317 10 444

1,040 6 398

59 11 327

Mono-brand store chain with high distribution network, reaching more than 220 cities and well-positioned among the retail companies

369 franchises +

15 owned stores +

1,211 multibrand clients

62 franchises +

22 owned stores(ii) +


Points of sale (3Q17)3

89 franchises

4 owned stores


4 owned store +

64 multibrand clients

Source: IBGE, Companies’ filings.1. Considers only mono-brand stores of Arezzo&Co.2. Domestic market only.3. Domestic and external market – multibrand without overlap.

GDP³: 14%

A&C¹: 17%

GDP³: 55%

A&C¹: 55%

GDP³: 17%

A&C¹: 14%

GDP³: 9%

A&C¹: 9%

GDP³: 5%

A&C¹: 5%

85sq m

80sq m

Points of sale – average size: new stores are increasing

the network’s average store size

2011 new

stores

2012 new

stores

2013 new

stores

55sq m

3

2014 new

stores

52sq m

2015 new

stores

69sq m

4 owned store

298 multibrand clients

17

Size and average sales per mono-brand stores – 2016

66sq m

2016 new

stores

Reception: 100,000 units/day

Storage: 100,000 units/day

Picking: 150,000 units/day

Distribution: 200,000 units/day

Flexible production process…

2

18

Production speed, flexibility and scalability to ensure Arezzo&Co’s expected growth based on asset light model

Arezzo’s scale and structure gives flexibility to source a large number

of SKU’s from various factories on a short time frame at competitive

prices

Owned factory with capacity to produce 1,1mm pairs annually and a

strong relationship with Vale dos Sinos production cluster as the

main outsourcing region

Sourcing Model Gains of scale

Joint purchasesCertification and auditing of suppliers

In-house certification and auditing ensure quality and punctuality

(ISO 9001 certification in 2008)

Coordination of material purchase jointly with shoe, handbag and

accessories’ suppliers

New Distribution Center Sourcing model – 91% of production outsourced¹

Consolidation and improvement of distribution in

national scale

12

34

9%

91%

Arezzo&Co OwnedFactories

Others

497 515 514 518 525

47 50 48 49 51

37.7 38.8 38.6 38.9 39.4

-

100

200

300

400

500

600

700

3Q16 4Q16 1Q17 2Q17 3Q17

Franchises Owned Stores¹ Area (000 M²)

... sold through owned stores…

Capturing value from the network while developing retail know-how and brands’ visibility2Flagship Stores

19

Greater brand awareness coupled with operational efficiencies

Clustering higher productivity stores in main areas (mainly SP and RJ) improving

operational efficiency and profitability:

Direct costumers interaction develops retail assets which are also reflected at

franchised stores

Flagship stores ensure greater visibility and reinforce brand image

R$6.2mm

Ow

ned

Fra

nchis

eAverage

Sales per Store

3Q17 LTM

Total sales area and # of stores (000 m2)

R$1.4mm

Arezzo – Iguatemi / SP

Schutz – Oscar Freire/ SP Arezzo – Oscar Freire/ SP

Schutz – Morumbi/ SP

Anacapri – Oscar Freire/ SP1.1%

+18

-0.2% 0.5%

+3 -2

-1

0.3%

+1

+4

+2

+7

Structure applied to retail in order to achieve better sales and margin results as well as to integrate and connect all monobrand stores’ back office

2

20

… based on a retail oriented

structure...

Strong focus on franchise and owned store performance

• All sales team (4,000+) get connected through national internet broadcast for three sales conventions per year,creating an aligned sales pitch and a great sense of motivation before each season

• Large service program to assist franchisees on sales and profitability goals

• Recurring training programs in products, fashion trends, sales techniques, store management, IT, among others

• Strong visual merchandising, trade marketing and ambiance investments and training

57%24%

9%

9%

Intense retail training

Ongoing support: average of 6 stores/ consultant and average of

22 visits per store/ year

Strong relationship with and ongoing support to franchisee

IT integration with our franchises amounts to 100%

As mono-brand stores, franchises reinforce branding in each city

they are located

24 or more

franchises

1 franchise

2 franchises

3 franchises

.10 …with efficient management of the

franchise network...

Model allows rapid expansion with low invested capital by Arezzo&Co and high profitability to franchisees

Successful Partnership: “Win – Win” Franchise Concentration per Operator

96% satisfaction of franchisees1

Excellence in Franchising (ABF). Awarded in the last 8 years

Best Franchise in Brazil (2005 and 2012) and in the industry for 7 years since 2004

(# of franchises by # of franchisees)

Notes:

1. 96% of the current franchisees indicated they would be interested in opening a

franchise if they did not already have one

2. Annual sales of R$ 3.3 million + average initial investment of R$ 900 thousand +

working capital of R$ 600 thousand

21

5-year contract and average payback of 48 months2

291

337 2,091

2,289

1.800

1.900

2.000

2.100

2.200

2.300

2.400

200

250

300

350

400

450

500

2016 2017

Gross Revenue LTM

# Stores MB

...and of the multi-brand stores

2

22

Multi-brand stores’ Gross Revenue¹ Improved distribution and brand visibility Greater brand distribution network

Presence in over 1,220 cities

Rapid expansion at low investment and risk

Main focus: share of wallet

Owner’s loyalty

Schutz Club – Relationship program that offers

advantages to the 50 Top Multi-brand stores, such as

better products display, training and awards to the best

sales teams.

Important sales channel for smaller cities

Sales team optimization: internal team and commissioned sales

representatives

Multi-brand stores widen the distribution network and the brands’ visibility, resulting in a strong retail footprint

Notes:

1. Domestic market only

Multi-brand stores

15.9%

9.5%

• USA

• Fiever/ New Brands

• Strategic Planning

/Innovation

/Franchising /CRM

/PMO

• Expansion*

• Portfolio Management

/Competitive

intelligence

• BU Arezzo

• BU Schutz

• BU Anacapri

• BU A.Birman

• E-commerce

• Commercial

(Multiband/Exports)

• Sourcing

• Engineering

• Quality

• Industry

• Planning

• Logistics

• People

• Sustainability*/PR

• Non productive

purchase

• Management

(Method, goals and

indicators)

• Finance/Legal/Fiscal

• IT

• Controller

• Investor Relations

• Risk Management

Board of Directors

BrandsSilvia Machado

Industrial & OperationsCisso Klaus e Cassiano Lemos

New Business DevelopmentAdministrative & Finance

Daniel LevyHR & ManagementMarco Aurélio Vidal

Risk, Audit and Finance Committee

People Committee

Strategy Committee

Internal Auditing

* 2018 onwards

CEO

The new structure presents a reduction in the number of CEO reports, value chain integration and higher speed

in decision making, with an increased focus on people and sustainability

New Organizational Structure

2

José Bolonha (Coordinator)Juliana Rozenbaum (Coordinator)

Corporate governance

2

24

Risk, Audit and Finance Committee

Committees

Strategy and Brands Committee People Committee

Members:

Alessandro Carlucci, Guilherme A. Ferreira and

Edward Ruiz

Members:

Alexandre Birman, Paula Bellizia and Juliana

Rozenbaum

Members:

Luiz Fernando Giorgi, José Bolonha and Ligia

Martins

The Board is comprised of 7 members, of which 2 are independent, and has a very large engagement on the strategic planning of Arezzo&Co

Name Experience Name Experience

Title Title

Board of Directors

Alessandro CarlucciChairman of the Board

Natura’s CEO for over a decade and former Board

Member of Lojas Renner, Redecard, Alcoa Latam and

Itau-Unibanco

Luiz Fernando Giorgimember

28 years of experience in Management and Leadership.

Current member of people committees for Santander, Sul

América and Grupo Martins

Alexandre BirmanMember

Current CEO of Arezzo&Co and part of the controlling group.

Founder of Schutz brand, with over 18 year of experience on

the footwear industry.

Juliana RozenbaumMember

Over 13 years of experience as sell side equity research

analyst, focused on retail and consumer sector

Paula BelliziaIndependent member

CEO of Microsoft Brasil. Former CEO for Apple Brasil and

Facebook Latam Sales Diretor. Member of the Economic

and Social Development Council (CDES).

Guilherme A. FerreiraIndependent Member

CEO of Bahema Participações, current board member of

Petrobras, Valid, Sul América, Gafisa and T4F

José BolonhaVice Chairman of the Board

Founder and CEO of “Ethos Desenvolvimento Humano e

Organizacional“; Board member of the Inter-American

Economic and Social Council (UN, WHO)

Guilherme A. Ferreira (Coordinator)

Ownership of the value chain, greater competitive advantage• More agile and collaborative model• Sell-out oriented to boost results in the value chain

25

Key messages

2Arezzo&Co keeps developing its business model in a sustainable way

Consolidated business model with multiple growth opportunities• Launch of a new brand Fiever with encouraging results• Improvement in the profitability of existing brands: Anacapri and Alexandre Birman1Staff management an ongoing development• Broad range of selection, training and retaining of staff at all levels• Strengthening of organizational identity2

3

Multi-channel management know-how, excellent platform to lift brands• Omni channel growth: Fiever debut, Schutz FIS, Arezzo consolidation, Anacapri expansion• Strong knowledge in franchises’ management in addition to improving opportunities• Multibrand channel leverages growth of new brands

5

Financial strength allows for sustainable business growth• History of cash generation together with consistent dividend payment policy• Net cash position, an important differentiator in challenging economic times4

26

…a multi-brand and multichannel

strategy…2Organic growth leveraged by multi-brand, multichannel strategy in footwear and handbags

27

….aligned with a clear focus of the future

2

| Financial Highlights03

567663 719 767 738 804

220 238

216

357400

434 467458

130 126

0

0

4172 93

119

33 42

11

18

10

9 921

6 11

8151.070 1.170

1.,282 1.307 1.402

390 416

-3.000, 0

-2.500, 0

-2.000, 0

-1.500, 0

-1.000, 0

-500,0

-

500 ,0

1.00 0,0

1.50 0,0

2.00 0,0

-

200 ,0

400 ,0

600 ,0

800 ,0

1.00 0,0

1.20 0,0

1.40 0,0

1.60 0,0

1.80 0,0

2.00 0,0

2011 2012 2013 2014 2015 2016 3Q16 3Q17

Arezzo Schutz Anacapri Others

29

Operational and financial highlights

3Gross Revenue Breakdown by Brand – Domestic Market (R$ million)

CAGR: 12%

7%

Others: includes only domestic markets for Alexandre Birman and Fiever brands and other revenues.

47 39 62 76 128 15236 39

420 512583

661 638686

182 202

234

286289

300 305304

107 111

151

246

268

272292

301

71 68

1

10

23

4469

108

29 35

9

15

7

53

3

1 0

8631.109

1.2321.358 1.435

1.554

390 416

(3000,0 0)

(2500,0 0)

(2000,0 0)

(1500,0 0)

(1000,0 0)

(500,00 )

–

500 ,00

100 0,00

150 0,00

200 0,00

–

200 ,00

400 ,00

600 ,00

800 ,00

100 0,00

120 0,00

140 0,00

160 0,00

180 0,00

200 0,00

2011 2012 2013 2014 2015 2016 3Q16 3Q17

Foreign Market Franchise Multibrands Owned Stores Web commerce Others Total

30


3Gross Revenue Breakdown by Channel – Domestic Market (R$ million)

CAGR: 13%

7%

Others: includes domestic market revenues that are not specific for distribution channels.

194

367 412

572

679

860

963

1,053

1,121

1,239

2007 2008 2009 2010 2011 2012 2013 2014 2015 2016

3

31


Key highlights

Sales area increased 4.2% in the last twelve months.

Gross revenue reached R$455 million in the 3Q17, a increase of 6.7% over 3Q16.

Number of Stores (R$ mln) and Total Area (m2- ‘000)

CAGR 2007-2016: 20.4%

Net Revenues (R$ mln)

Area CAGR 2008-2016: 12.6%

89.4%

12.3%

38.7%

18.8%

26.7%

11.9%

9.3%

6.4%

10.6%

497 515 514 518 525

47 50 48 49 51

37.7 38.8 38.6 38.9 39.4

-

100

200

300

400

500

600

700

3Q16 4Q16 1Q17 2Q17 3Q17

Franchises Owned Stores¹ Area (000 M²)

1.1%

+18

-0.2% 0.5%

+3 -2

-1

0.3%

+1

+4

+2

+7

281

376

426 456

476

549

152 170

41,5%43,7% 44,2% 43,3% 42,5%

44,3% 43,9%45,8%

–

5,0%

10,0 %

15,0 %

20,0 %

25,0 %

30,0 %

35,0 %

40,0 %

45,0 %

50,0 %

–

100

200

300

400

500

600

700

800

2011 2012 2013 2014 2015 2016 3Q16 3T17

Gross Profit Gross Margin

92102

111120 120 116

35 38

13,5%

11,9%11,5% 11,4%

10,7%

9,4%

10,2% 10,2%

0,0 %

2,0 %

4,0 %

6,0 %

8,0 %

10, 0%

12, 0%

14, 0%

16, 0%

-

50,0

100 ,0

150 ,0

200 ,0

250 ,0

2011 2012 2013 2014 2015 2016 3Q16 3Q17

Net Profit Net Margin

3Operational and financial highlights

Gross Profit Evolution (R$ MM) and Gross Margin (%) Net Profit Evolution (R$ MM) and Net Margin (%)

32

6.3%

0 bps

+ 190 bps

11.6%

118

144

159170 165

177

5665

17,3%16,7% 16,6% 16,1%

14,8%14,3%

16,1%

17,6%

0,0 %

2,0 %

4,0 %

6,0 %

8,0 %

10, 0%

12, 0%

14, 0%

16, 0%

18, 0%

20, 0%

-

50,0

100 ,0

150 ,0

200 ,0

250 ,0

300 ,0

2011 2012 2013 2014 2015 2016 3Q16 3Q17

EBITDA EBITDA Margin

47 39 62 76 128 15236 39

815

1.070 1.170

1.282 1.307

1.402

390 416

863

1.109

1.232

1.3581.435

1.554

426 455

–

200 ,0

400 ,0

600 ,0

800 ,0

1.00 0,0

1.20 0,0

1.40 0,0

1.60 0,0

1.80 0,0

–

200 ,0

400 ,0

600 ,0

800 ,0

1.00 0,0

1.20 0,0

1.40 0,0

1.60 0,0

1.80 0,0

2.00 0,0

2011 2012 2013 2014 2015 2016 3Q16 3Q17

Foreign Market Domestic Market


Gross Revenue (R$ MM) EBITDA Evolution (R$ MM) and EBITDA Margin (%)

33

+ 150 bpsCAGR: 13%

17.1%

6.7%


34

Arezzo&Co has a solid balance sheet with a healthy net cash position, coupled with a strong ability to generate operating cash flow and dividend payments

Operating cash flow yield¹ 5.9%

Capex / Depreciation LTM 0.2x

Net Debt / EBITDA - 0.6x

Working Capital (% of Net

Revenue)23.5%

Reduction in working capital needs by 560 bps from

3Q16 to 3Q17

Dividend Payout (YTD) 111.3%Consistent dividend payments, with a payout of more

than 90% of net profit in 2016. In 9M17, payout of

more than 100% of net profit.

Arezzo&Co generated R$173.6 mm in operating cash

flow in 3Q17, translating into cash flow yield of 5,9%

From 2015 onwards capex trended roughly in line with

depreciation

The Company has a strong balance sheet and a net

cash/EBITDA ratio of -0.6x in Sep/17.

1) Operating cash flow yield = LTM Operating cash flow / Firm value. Considered Cash Flow LTM of R$ 2,835.4mm (as of 09/29/2017)

35


Cash Conversion Cycle (R$ thousand)

Cash Flow From Operating Activities (R$ thousand)

Capex (R$ thousand)

¹ Days of COGS

² Days of Net Revenues

Operational Indicators

Operating Cash Flow 3Q17 3Q16 Δ 17 x 16

(R$)

Δ 17 x 16

(%) 9M17

58.213 52.769 5.444 10,3% 141.147

9.218 6.500 2.718 41,8% 22.630

(2.925) (880) (2.045) 232,4% (4.271)

(18.260) (21.674) 3.414 (15,8%) (3.655)

(50.078) (50.634) 556 (1,1%) (30.567)

5.014 3.741 1.273 34,0% (9.794)

19.670 21.930 (2.260) (10,3%) 42.575

7.134 3.289 3.845 116,9% (5.869)

(13.040) (10.672) (2.368) 22,2% (27.911)

33.206 26.043 7.163 27,5% 127.940

Income before income tax and

social contribution

Depreciation and amortization

Others

Payment of income tax and

social contribution

Net cash flow generated by

operational activities

Decrease (increase) in assets /

liabilities

Trade accounts receivables

Inventories

Suppliers

Change in other noncurrent and

current assets and liabilities

Summary of investments 3Q17 3Q16 Δ 17 x 16

(%) 9M17

Total CAPEX 5.084 5.343 (4,9%) 13.945

Stores - expansion and refurbishing 1.798 856 109,9% 5.453

Corporate 2.517 3.174 (20,7%) 5.963

Other 770 1.313 (41,4%) 2.529

#days (R$'000) #days (R$'000)

115 355.827 97 347.924 -18

Inventory¹ 68 124.019 59 116.783 -10

Accounts Receivable² 103 334.858 93 340.155 -10

(-) Accounts Payable¹ 57 103.050 55 109.014 -1

Change

(in days)Cash Conversion Cycle

3Q16 3Q17

Operating Indicators 3Q17 3Q16Δ

17 x 169M17

# of pairs sold ('000) 3.414 3.231 5,7% 8.480

# of handbags sold ('000) 353 284 24,2% 899

# of employees 2.355 2.206 6,8% 2.355

# of stores* 576 544 32 576

Owned Stores 51 47 4 51

Franchises 525 497 28 525

Outsourcing (as % of total production) 90,7% 89,5% 1,2 p.p 90,1%

SSS² Sell-in (franchises) 7,2% 2,1% 5,1 p.p 6,5%

SSS² Sell-out (owned stores + franchises) 1,5% 5,6% -4,1 p.p 3,2%

SSS² Sell-out (owned stores + franchises + web commerce) 2,7% 6,4% -3,7 p.p 4,4%

36


Indebtedness (R$ thousand)

Total indebtedness of R$93.2 million in 3Q17 against R$95.7 million in 3Q16.

Long term indebtedness of 21.7% of total debt in 3Q17, compared to 30.7% in 3Q16.

The weighted average cost of the company’s total debt in 3Q17 remained at low levels.

It is worth mentioning that during 3Q17, the Company distributed the amount of

R$ 88.8 million in dividends.

3Q17 2Q17 3Q16

Cash 218.254 310.115 221.591

Total debt 93.221 110.847 95.785

Short term 72.946 88.311 66.424

% total debt 78,3% 79,7% 69,3%

Long-term 20.275 22.536 29.361

% total debt 21,7% 20,3% 30,7%

Net debt (125.033) (199.268) (125.806)

Cash position and Indebtedness

37

Appendix

38

Key financial indicators

A3Q17 3Q16

Δ (%)

17 x 169M17 9M16

Δ (%)

17 x 16

Net revenues 370.793 346.941 6,9% 996.873 900.240 10,7%

COGS (200.974) (194.741) 3,2% (542.659) (504.180) 7,6%

Gross profit 169.819 152.200 11,6% 454.214 396.060 14,7%

Gross margin 45,8% 43,9% 1,9 p.p 45,6% 44,0% 1,6 p.p

SG&A (113.602) (102.804) 10,5% (325.061) (292.115) 11,3%

% of net revenues (30,6%) (29,6%) (1,0 p.p) (32,6%) (32,4%) (0,2 p.p)

Selling expenses (79.149) (75.208) 5,2% (226.054) (209.528) 7,9%

Ow ned stores and w eb commerce (30.876) (30.625) 0,8% (91.132) (89.437) 1,9%

Selling, logistics and supply (48.273) (44.583) 8,3% (134.922) (120.091) 12,4%

General and administrative expenses (24.953) (19.570) 27,5% (75.560) (61.476) 22,9%

Other operating revenues (expenses) (282) (1.526) (81,5%) (817) (1.830) (55,4%)

Depreciation and amortization (9.218) (6.500) 41,8% (22.630) (19.282) 17,4%

EBITDA 65.435 55.896 17,1% 151.783 123.226 23,2%

EBITDA margin 17,6% 16,1% 1,5 p.p 15,2% 13,7% 1,5 p.p

Net income 37.681 35.440 6,3% 99.126 80.332 23,4%

Net margin 10,2% 10,2% - 9,9% 8,9% 1,0 p.p

Working capital¹ - as % of revenues 23,5% 29,1% (5,6 p.p) 23,4% 29,1% (5,7 p.p)

Invested capital² - as % of revenues 38,8% 45,3% (6,5 p.p) 38,7% 45,3% (6,6 p.p)

Total debt 93.221 95.785 (2,7%) 110.847 95.785 15,7%

Net debt³ (125.033) (125.806) (0,6%) (199.268) (125.806) 58,4%

Net debt/EBITDA LTM -0,6x -0,7x - -0,7x -0,7x -

Key financial indicators

(1) Working Capital: current assets minus cash, cash equivalents and financial investments less from current liabilities minus loans and financing and dividends

payable.

(2) Invested Capital: working capital plus fixed assets and other long term assets less income tax and deferred social contributions.

(3) Net debt is equal to total interest bearing debt position at the end of a period less cash, cash equivalents and short-term financial investments.

39

History – Franchises and Owned Stores

A3Q16 4Q16 1Q17 2Q17 3Q17

Sales area 1,3- Total (m²) 37.687 38.828 38.623 38.930 39.351

Sales area - franchises (m²) 31.410 32.440 32.374 32.660 33.029

Sales area - ow ned stores² (m²) 6.278 6.387 6.249 6.270 6.322

Total number of domestic stores 537 558 555 560 569

# of franchises 492 510 509 513 520

Arezzo 365 369 368 369 369

Schutz 55 61 61 61 62

Anacapri 72 80 80 83 89

# of owned stores 45 48 46 47 49

Arezzo 15 15 15 14 15

Schutz 23 23 22 22 22

Alexandre Birman 2 3 3 3 4

Anacapri 4 4 4 4 4

Fiever 1 3 2 4 4

Total number of international stores 7 7 7 7 7

# of franchises 5 5 5 5 5

# of owned stores 2 2 2 2 2

(1) Include area in square meters of the seven stores abroad

(2) Includes eight outlet stores with a total area of 1,959 m²

(3) Includes areas in square meters of stores that were expanded

History of Stores

40

Balance Sheet - IFRS

AAssets 3Q17 2Q17 3Q16

Current assets 712.162 767.569 719.074

Cash and cash equivalents 4.920 7.695 7.155

Financial Investments 213.334 302.420 214.436

Trade accounts receivables 340.155 293.872 334.858

Inventory 116.783 123.048 124.019

Taxes recoverable 19.966 20.858 21.468

Other credits 17.004 19.676 17.138

Non-current assets 200.494 200.220 203.994

Long-term receivables 48.932 43.222 41.454

Trade accounts receivables 10.368 8.432 13.896

Deferred income and social contribution 16.907 14.049 10.004

Other credits 21.657 20.741 17.554

Investments 2.406 2.406 1.177

Property, plant and equipment 68.954 71.549 72.741

Intangible assets 80.202 83.043 88.622

Total Assets 912.656 967.789 923.068

Liabilities 3Q17 2Q17 3Q16

Current liabilities 252.460 256.977 230.221

Loans and financing 72.946 88.311 66.424

Suppliers 109.014 89.346 103.050

Other liabilities 70.500 79.320 60.747

Non-current liabilities 29.957 32.160 37.887

Loans and financing 20.275 22.536 29.361

Related parties 1.180 1.232 1.208

Other liabilities 8.502 8.392 7.318

Equity 630.239 678.652 654.960

Capital 330.375 330.375 310.008

Capital reserve 43.268 41.758 38.371

Income reserves 217.024 269.024 261.249

Equity Valuation Adjustments -1.182 -2.410 -1.850

Profit 40.754 39.905 47.182

Additional proposed dividend - - -

Total liabilities and shareholders' equity 912.656 967.789 923.068

41

Income Statement - IFRS

AIncome statement - IFRS 3Q17 3Q16 Var.% 9M17 9M16 Var.%

Net operating revenue 370.793 346.941 6,9% 996.873 900.240 10,7%

Cost of goods sold (200.974) (194.741) 3,2% (542.659) (504.180) 7,6%

Gross profit 169.819 152.200 11,6% 454.214 396.060 14,7%

Operating income (expenses): (113.602) (102.804) 10,5% (325.061) (292.116) 11,3%

Selling (86.311) (80.003) 7,9% (242.651) (223.320) 8,7%

Administrative and general expenses (27.009) (21.275) 27,0% (81.593) (66.966) 21,8%

Other operating income net (282) (1.526) -81,5% (817) (1.830) -55,4% ROL

LAIR

Income before financial result 56.217 49.396 13,8% 129.153 103.944 24,3% IRFinancial income 1.996 3.373 -40,8% 11.994 6.518 84,0% Alíquota

LLIncome before income taxes 58.213 52.769 10,3% 141.147 110.462 27,8% M. Líquida

Income tax and social contribution (20.532) (17.329) 18,5% (42.021) (30.130) 39,5%

Current (23.390) (20.079) 16,5% (50.523) (33.849) 49,3% ROL

Deferred 2.858 2.750 3,9% 8.502 3.719 128,6% LAIR

IRNet income for period 37.681 35.440 6,3% 99.126 80.332 23,4% Alíquota

42

Cash Flow Statement - IFRS

ACash Flow - IFRS 3Q17 3Q16 9M17 9M16

Operating activities

Income before income tax and social contribution 58.213 52.769 141.147 110.462

Adjustments to reconcile net income with cash from operational activities 6.293 5.620 18.359 (3.273)

Depreciation and amortization 9.218 6.500 22.630 19.282

Income from financial investments (6.485) (6.804) (21.351) (21.722)

Interest and exchange rate (1.301) 6.203 940 (5.427)

Other 4.861 (279) 16.140 4.594

Decrease (increase) in assets

Trade accounts receivables (50.078) (50.634) (30.567) (53.991)

Inventory 5.014 3.741 (9.794) (17.917)

Recoverable taxes 350 2.188 (8.148) (5.820)

Variation other current assets 4.015 3.405 (255) 6.813

Judicial deposits (1.281) (1.971) (3.835) (4.412)

Decrease (increase) in liabilities

Suppliers 19.670 21.930 42.575 38.169

Labor liabilities 8.726 6.045 12.234 10.744

Fiscal and social liabilities (2.803) (4.029) (5.860) (5.459)

Variation in other liabilities (1.873) (2.349) (5) (77)

Payment of income tax and social contribution (13.040) (10.672) (27.911) (19.209)

43

Cash Flow Statement - IFRS

ANet cash flow from operating activities 33.206 26.043 127.940 56.030

Investing activities

Sale of f ixed and intangible assets 637 2.745 674 2.745

Acquisitions of f ixed and intangible assets (5.084) (5.342) (13.944) (20.783)

Financial Investments (180.541) (228.192) (665.071) (560.956)

Redemption of f inancial investments 274.971 231.652 706.635 579.577

Net cash used in investing activities 89.983 863 28.294 583

Financing activities with third parties

Increase in loans 11.138 22.485 50.245 46.248

Payments of loans (26.238) (30.858) (62.531) (63.818)

Payments of Interest on loans (288) (140) (935) (1.321)

Net cash used in financing activities with third parties (15.388) (8.513) (13.221) (18.891)

Financing activities with shareholders

Interest on equity (21.540) (21.893) (21.540) (21.893)

Distribution of profits (88.832) 1 (141.807) (18.704)

Receivables (payables) w ith shareholders (52) 67 (34) (183)

Share Issuance - 950 20.367 1.931

Net cash used in financing activities (110.424) (20.875) (143.014) (38.849)

Increase (decrease) in cash and cash equivalents (2.623) (2.482) (1) (1.127)

Cash and cash equivalents

Foreign exchange effect on cash and cash equivalents (152) 30 (99) (540)

Cash and cash equivalents - Initial balance 7.695 9.607 7.155 8.822

Cash and cash equivalents - Closing balance 4.920 7.155 7.695 7.155

Increase (decrease) in cash and cash equivalents (2.623) (2.482) 639 (1.127)

Contacts

Telephone: +55 11 2132-4300

[email protected]

www.arezzoco.com.br

Daniel Levy

CFO and IR Officer

Aline Penna

IR Manager

Victoria Machado

IR Analyst

Guilherme de Biagi

IR Coordinator

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