9M13 Results

9M13 Results
9M13 Results
Di l i
Disclaimer
This p
presentation contains statements that can represent
p
expectations
p
about
future events or results. These statements are based on certain suppositions
and analyses made by the company in accordance with its experience, with the
economic
i environment
i
t and
d market
k t conditions,
diti
and
d expected
t d future
f t
developments, many of which are beyond the company’s control. Important
factors could lead to significant differences between real results and the
statements on expectations about future events or results, including the
company’s business strategy, Brazilian and international economic conditions,
technology, financial strategy, developments in the footwear industry,
conditions of the financial market, and uncertainty on the company’s future
results from operations,
operations plans,
plans objectives,
objectives expectations and intentions – among
other factors. In view of these aspects, the company’s results could differ
g
y from those indicated or implicit
p
in anyy statements of expectations
p
significantly
about future events or results.
2
A d
Agenda
Mission Vision and Values
Mission, Vision
History
Di id d
Dividends
Capital markets
Plants
Pl
Capital Expenditure (CAPEX)
Production
Footwear Sector
Brands and Marketing
Resultads
Guidance
3
Mission
To create democratic fashion, responding rapidly to the market
To
create democratic fashion responding rapidly to the market’ss needs, generating an attractive return for the company and its partners.
To be the most profitable company in the world among the
leading organizations in the sector.
líderes do setor.
Vision
Grendene Values
Grendene Values
Profitability
Competitiveness
Innovation
Agility
Ethics
4
Timeline
70s
Foundation Grendene.
Launch of the sandal collection with the brand Melissa.
80s
90s
Openning the plant making molds, at Carlos Barbosa.
Openning of the factories at Fortaleza, Sobral and Crato, in Ceará.
Launch men´s sandal line Rider.
Launch Grendha brand.
5
Timeline
2000s
Grendene started having common shares (“GRND3”) negotiated at the Novo ti t d t th N
Mercado of BM&FBOVESPA.
Openning of Galeria Galeria
Melissa in São Paulo and New York.
Creation Clube Melissa
New Business – Constitution of A3NP Indústria e Comércio de Móveis S.A.
S A for industrial‐scale production of consumer products for industrial scale production of consumer products
made from plastic, with sophisticated design, and cost that is accessible to the middle income groups, in partnership with Philippe Starck and others.
Foto: A. Carreiro – Out/2004
New Plants – Teixeira de Freitas (2007) and Sobral (2013)
(2013).
6
Dividend Policy
Payout 2013
Payout 2013
Grendene’s dividend payout ratio (after the allocations to reserves, etc., required by law) will be approximately 65%. R$ p
per share
Estimates that the total of dividends paid for the business year 2013 will
paid for the business year 2013 will be larger than the amount of dividends distributed for 2012.
71.1%
74.9%
75.0%
67.5%
0 9760
0.9760
39.9%
.0,7300
0 6260
0.6260
0.4400
0.4048
4.7%
2010
0.6300
%
The company will maintain our policy of quarterly distribution of dividends
dividends. 74,.%
8.5%
8.4%
6.7%
8.1%
2011
2012
9M11
9M12
Dividend per share
Pay‐out (*)
4.2%
9M13
Dividend yield (**)
(*) Payout: Dividend divided by profit after the allocations to legal reserves
(**) Dividend yield: Dividend per share in the period divided by the weighted average price of the share, annualized.
7
Capital markets
Last 52 weeks
Date
Share price
Market capitalization
Market capitalization Free‐float
Mimimum
Nov. 9, 2012
R$ 13.50
R$ 4.2 billion
R$ 1.0 billion
Maximum
Apr. 23, 2013
Apr 23 2013
R$ 23.40
R$ 23 40
R$ 7.0 billion
R$ 7 0 billion
R$ 1.8 billion
R$ 1 8 billion
Evolution GRND3 x IBOVESPA – Dec. 31, 2008 to Oct. 28, 2013
800
700
635 2
635.2 505.1 P/E – Share price divided by the amount of profits it makes for each share in a 12-month period.
500
474.8 400
300
250.1 235.0 245.1 220.2 182.7 184.6 217.2 181.7 389.5 151.1 162.3 200
100
146.7 IBOVESPA
GRND3 ‐ No dividends reinvest.
GRND3 ‐ With dividends reinvest.
30‐SSep‐13
30‐JJun‐13
31‐M
Mar‐13
31‐D
Dec‐12
30‐SSep‐12
30‐JJun‐12
31‐M
Mar‐12
31‐D
Dec‐11
30‐SSep‐11
30‐JJun‐11
31‐M
Mar‐11
31‐D
Dec‐10
30‐SSep‐10
30‐JJun‐10
31‐M
Mar‐10
31‐D
Dec‐09
30‐SSep‐09
30‐JJun‐09
31‐M
Mar‐09
0
31‐D
Dec‐08
Dec. 31, 2008
Bassis 100 = D
600
Price/Earnings (P/E):
12/31/08 – 5.32 12/31/09 – 10.99
12/31/10 – 8.97 12/31/11 – 7.57
12/31/12 – 11.56 09/30/13 – 12.94
8
Location of industrial plants
Production capacity: 250 million pairs / year
250 million
/ year
Brasil
F
Fortaleza / CE
l
/ CE
Sobral / CE
Sobral
Fortaleza
Crato
Teixeira de
Freitas
Carlos Barbosa / RS
Carlos Barbosa
Crato / CE
Farroupilha
Built area = 296.000 m2
Farroupilha / RS
Farroupilha / RS
Employees:
N h
Northeast Region: 26,900
R i
26 900
South Region: 2,200
Teixeira de Freitas/BA
Teixeira de Freitas/BA
9
C
Capex
(P
(Property, plant
t l t and
d equipment
i
t and
d intangible
i t ibl assets)
t)
120,0 ,
103.9 100,0 R$ million
80,0 63.6 60,0 40,0 35.4 33.0 39.4 37.6 20,0 Investments in expanding
production capacity.
‐
2009 2010 2011 2012 9M12 9M13
10
P d ti process
Productive
Verticalization = Agility
g y
PVC formulation
PVC formulation
D i
Design
Moulds
R&D
11
F t
Footwear
S t
Sector
12
Footwear Sector–
Sector Brazil
• World
World´ss 3rd largest producer;
• About 8,000 producers;
• 348,000 direct employees;
• Production: 864 million
Production: 864 million pairs in in
2012;
• Exports:
Exports: 113 million
113 million pairs to more to more
than 140 countries in 2012;
• Apparent consumption, Brazilian
consumption Brazilian
domestic market: 787 million
pairs and 4.0 pairs
4 0 pairs per capita/year
per capita/year
in 2012
Source: IEMI/RAIS/ABICALÇADOS/SECEX
Mini Melissa
Aranha + Minnie
The
Th industry
i d t itself
it lf is not
i
t much
h more than
th
180 years old – companies are typically
small and labor
small and
labor‐intensive,
intensive, with
with no entry
no entry
or exit barriers.
13
Footwear sector
sector – World
Country
Distribution of footwear production Distribution of footwear production
by continent in 2011
3.6%
5.1%
6.2%
1.4%
1.7% 0.01%
Production 2011
(million pairs)
China
Chi
10,503
10 503
India
2,250
Brazil
819
Vietnam
707
Indonesia
640
Others
Total
81,9%
Asia
South America
Europe
Africa
North & Central America
Middle East
Oceania
Consumption – 2011
United States
France
United Kindgom
Italy
Japan
Brazil
3,498
18,417
The 5 principal countries produce: 14,919 million pairs = 81% of total world production.
Source: World Shoe
Review 2010 / ABICALÇADOS
Total
Per capita*
2,170
424
377
337
684
740
6.9
6.5
6.0
5.5
55
5.3
3.9
* Estimated by Grendene. Sources – World Shoe Review / Abicalçados / CIA – Central Intelligence Agency
14
Brazilian footwear sector x Grendene
sector x Grendene
Brazilian production
CAGR (2012/2003): 3.0%
Change (2012/2011): 5 5%
Change (2012/2011): 5.5%
Grendene
CAGR (2012/2003): 4.8%
Change (2012/2011): 23 3%
Change (2012/2011): 23.3%
Change (9M13/9M12): 21.7%
180 160 9M13
3
2012
2011
2010
2009
2008
‐
2007
740 2006
20 2005
760 2004
40
40 2003
780
780 9M12
2
60 2012
2
800 80 2011
1
816 814 816 100 2010
0
808 121 2009
9
820 819
819 132
130 132 130 2008
8
830 120 147 121 2007
7
860 140
140 2006
6
864
864 150 146 146 145 2003
3
877 840 166 169 2005
5
894 880 185 2004
4
897 Million pairs / yeaar
900 200 916 920 Million pairs / ye
ear
Source: IEM
MI / Abicalçad
dos / Grendeene
940 15
Exports: Grendene vs. Brazil
Exports: Grendene vs. Brazil
Grendene
CAGR (2012/2003): 10.7%
Change (2012/2011): 6 6%
Change (2012/2011): 6.6%
Change (9M13/9M12): 15.6%
250 60 55 211 190 189 48 48 50 180 177 166 143 150 127 113 113 100 81 88 50
50 Million pairs / yeaar
36 32 30 31 29 28 27 20 Grendene accounts for 40.4% of
Brazilian footwear exported in 9H13 (38 2% i 9H12)
9H13. (38,2% in 9H12).
10 9M13
3
9M12
2
2012
2
2011
1
2010
0
2009
9
2008
8
2007
7
2006
6
2005
5
2004
4
9M13
3
9M12
2
2012
2
2011
1
2010
0
2009
9
2008
8
2007
7
2006
6
2005
5
2004
4
‐
2003
3
‐
45 43 40 40 2003
3
200 Million pairs / yeaar
Source:: MDIC / Decex / Abicalçaados / Grendene
Brasilian exports
CAGR (2012/2003): (3.6%)
Change (2012/2011): 0 3%
Change (2012/2011): 0.3%
Change (9M13/9M12): 9.4%
16
Brands &
Marketing
& Marketing
Products that meet
essential and basic
needs at low cost.
Products for all the
income levels: A, B, C, D and E –
D and
E with very
good cost x benefit.
17
Sales Channels
C&A - Retail
Selective distribution
Selective distribution
Strong relationship with trade
18
Marketing
Ipanema and Rider
at Rock in Rio
I
Ipanema
on the
h website
b i off Vi
Victoria's
i ' S
Secret and
d
boutique Patricia Field - NY
Fernanda Paes Leme
Fiorella Mattheis
Giovanna Lancelotti
19
In October the Club
Melissa celebrated one
year with the opening of
the 100th store.
Melissa at Galeria Lafayette
Pop Up Store Melissa in Miami
20
21
Gross sales revenue ((IFRS)) – R$
$
million
Note: CAGR 5 years
Gross sales revenue –
Total
Gross sales revenue –
Domestic market
Gross sales revenue –
Exports
CAGR (9M13-9M08): 11.4%
CAGR (9M13-9M08): 11.2%
CAGR (9M13-9M08): 12.3%
1,229
1,521
292
1,125
1,394
1,219
,
372
1,475
1,847
1,211
973
269
995
245
216
9M09 9M10 9M11 9M12 9M13
9M09 9M10 9M11 9M12 9M13
9M09 9M10 9M11 9M12 9M13
22
Market % Gross sales revenue
20.1%
19.3%
17.8%
79.9%
80.7%
82.2%
9M09
9M10
9M11
Domestic market
Sales volume
19.2%
20.1%
80.8%
79.9%
9M12
9M13
Exports
29.2%
33.8%
29.8%
25.5%
24.2%
70.8%
66.2%
70.2%
74.5%
75.8%
9M09
9M10
9M11
9M12
9M13
Domestic market
Exports
23
Results ((IFRS) –
) R$ million
Obs: CAGR 5 anos
EBIT / EBIT margin
EBITDA / EBITDA margin
CAGR (9M13-9M08): 21.6%
CAGR (9M13-9M08): 19.8%
260
286
195
112
97
95
10.0%
10.0%
9.8%
9M09
9M10
9M11
15.9%
9M12
218
17.5%
9M13
133
117
117
12.0%
11.9%
12.0%
9M09
9M10
9M11
17.9%
9M12
19.3%
9M13
24
Production ((million p
pairs))
Note: CAGR 5 anos
Sales Volume –
Domestic market
Sales volume –
Exports
CAGR (9M13-9M08): 10.0%
CAGR (9M13-9M08): 0.6%
Sales volume - Total
CAGR (9M13-9M08): 7.2%
112
147
121
120
108
100
9M09 9M10 9M11 9M12 9M13
41
36
90
76
32
80
30
31
70
Market share gains
World p
presence:
more than 90
countries
9M09 9M10 9M11 9M12 9M13
9M09 9M10 9M11 9M12 9M13
25
Sh h ld ´ equity
Shareholder´s
it and
d return
t
on equity
it
SShareholder´s equity
a e o de s equ ty
Return on average equity
etu o a e age equ ty
2.500
2.000
R$ million
1,676
1.500
1.000
1,954
2 014
2,014
22.9%
24.1%
1,801
1,465
19.9%
19.9%
17.6%
500
0
31/Dec/2009 31/Dec/2010 31/Dec/2011 31/Dec/2012 30/Sep/2013
26
Cash and cash equivalents and financial investments
financial investments (short‐ and
long‐term), borrowings (short‐ and long term) and net cash
1 200
1.200
1.031
916
R$ millio
on
800
794
849
805
664
66
874
736
867
740
400
Sólida Estrutura de Capital
e Forte Geração de Caixa.
0
(131)
(181)
(111)
(138)
(127)
‐400
31/Dec/09 31/Dec/10 31/Dec/11 31/Dec/12 30/Sep/13
Cash and cash equivalents and financial investments
Borrowings
g
Net Cash
27
Less labor ‐
labor ‐
intensive
More capital‐
More
capital‐
intensive
Strategy: Break
Paradigms
g
Higher
entry
g e e
ty
barries
Highly
k ti
marketing intensive
Our expertise of 40 years, producing innovative
footwear and generating
desired brands, shows the
brands, shows the
success of our vision of the
market, our strategy and our
market, our
business model – and our
capacity
p
y to create value ffor stockholders.
28
Value
proposition
Value proposition
Cartoon characters, local celebrities and successful designers
Brands
Products
Marketing
 Constant creation of
products
 Aggresive marketing
 Segmentation
 Investment in media / events
 Strong relationship
with trade
 Innovative design
 Manufacturing
technolog
technology
 Few products in large
scale
Management
 Scale gains, scope
gains
 Profitability
P fit bilit
 Continuous
improvement
 Financial solidity
 Sustainable ggrowth
Value for Stakeholders
29
Market
Melissa
Brand: Melissa
Main competitors: Arezzo, Schultz, Grudy, Flor de Mel, Cravo e Canela.
Vivienne
Westwood
Anglomania +
Melissa Lady
Dragon XI
Melissa Ginga
+ Karl Lagerfeld
Melissa
Jean +
Jason
Wu
W
30
Market
Women
Main brands: Grendha, Zaxy, Ilhabela
Main licenses: Ivete Sangalo, Shakira, Paula Fernandes
Main competitors: Via Marte, Beira Rio, Ramarim, Dakota, Picadilly, Via
Uno, Anacapri, Usaflex.
31
Market
Men
Main brands: Rider, Cartago
Main licenses:
licenses Guga
G ga Küerten,
Küerten Bad Boy,
Bo Mormaii
Main competitors: Kenner, Beira Rio, Alpargatas, Itapuã, Free-Way.
32
Market
kids
Main brands: Grendene Kids, Grendene Baby, Zizou
Main licenses: Ben 10, Hello Kitty, Disney, Hot Wheels, Spider-man,
B bi JJolie,
Barbie,
li Strawberry
St
b
Sh t k Fisher-Price,
Shortcake,
Fi h P i
M Steel
Max
St l among others.
th
Main competitors: Klim, Bibi, Pampily, Bical, Pé com Pé, Marisol
33
Market
Mass market
Main brands: Ipanema
Main competitors: Alpargatas, Dupé, Balina, Beira-Rio.
34
Guidance
Gross sales revenue
3.500
Guidance 12% a.a.
R$ million
3.000
Guidance 8% a.a.
2.500
2,324 1 999
1,999 2.000
1,819 1,847 1,576 1.500
2008
2009
2010
Guidance 8% a.a.
2011
2012
2013
Guidance 12% a.a.
2014
2015
Accomplished
We expect in this period to have some years with higher growth than these rate, as happened in 2009 and W
t i thi
i dt h
ith hi h
th th th
t
h
d i 2009 d
other years with lower growth, but on average we intend to achieve these targets.
35
Guidance
Net Profit
700
Guidance 15% a.a.
R$ million
600
Guidance 12% a.a.
500
429 29
400
300
239 272 312
312 305 200
2008
2009
2010
Guidance 12% a.a.
2011
2012
2013
Guidance 15% a.a.
2014
2015
Accomplished
We expect in this period to have some years with higher growth than these rate, as happened in 2009 and W
t i thi
i dt h
ith hi h
th th th
t
h
d i 2009 d
other years with lower growth, but on average we intend to achieve these targets.
36
Perspectivas
p
Targets for:
2008‐2015
Growth of gross revenue at a CAGR
between 8% and 12% in the five years.
Growth of net profit at a CAGR between
12% and 15% in the five years.
Advertising expenses: average: 8% ‐ 10%
of net revenue in this period.
We expect in this period to have some years with higher growth than these rate, as happened in 2009 and other years with lower growth, but on average we as
appe ed
009 a d o e yea s
o e go
, bu o a e age e
intend to achieve these targets.
37
Grendene
Grendene’ss IR Team
IR Team
Francisco Schmitt
CFO & IRO
(55 54) 2109.9022
Secretary
Cátia Gastmann
(55 54) 2109 9011
(55 54) 2109.9011
Further information
I
Internet: http://ri.grendene.com.br
h // i
d
b
Email: [email protected]
Thank You!
38