2. Classificação: InternoJuly 2018 Lojas Renner S.A. 2
WHO WE ARE
• Company Background
• Company Overview
• Our Businesses
• Geographical Distribution
• Store Evolution
• Corporate Governance
• Share Performance
3. Classificação: InternoJuly 2018 Lojas Renner S.A.
COMPANY OVERVIEW
3
R$ 9.6 billion of Total Gross Revenue in 2017
527 stores in operation (334 Renner, 101 Camicado and 93 Youcom)
4 distribution centers (SC and RJ fully automated)
20 thousand employees
29.6 MM of private label cards issued
20 proprietary brands
+ 600 thousand customers visit our stores daily
+ 120 MM users visited our e-commerce channel in 2017
+ 2,937% of share appreciation since 2005
Market capitalization of R$ 21.0 billion
Baseline date Mar/18
WHOWEARE
4. Classificação: InternoJuly 2018 Lojas Renner S.A. 4
COMPANY BACKGROUND
A.J. Renner
begins
operations
First store, in
Porto Alegre
Full line
department
store
Lojas Renner
S.A. is
constituted
Capital
Listing
Renner
Private
Label
Card
Heavy
consumer
durables
phase out
Professionalization
of management
Specialized fashion
store
Expansion
into the States
of Santa
Catarina and
Paraná
“Enchantmeter”
customer
satisfaction
First
stores in
São
Paulo
J.C. Penney
acquires a
controlling
stake
Debut in
the
Midwest
Region
Lifestyle
Concept
Phase out
of Home
and Décor
department
J.C. Penney
divests its stake
Novo Mercado
1st Brazilian
Corporation
Debut in the
Northeast
Financial Products
Debut into
the North
Co-branded
Credit Card
E-commerce
Acquisition
of
Camicado
Rio de Janeiro
DC
Shared Services
Center
Launch of
Youcom
Present in
all
Brazilian
states and
FD
New Santa
Catarina DC
Realize CFI
constitution
Overseas
Operation
1912 1922 1940 1965 1967 1973 1987 1991 1994 1996 1997 1998 1999 2002 2003 2005 2006 2007 2010 2011 2012 2013 2014 2015 2016 2017
Launch of
Ashua
Beginning of the Story Expanding Territory Driving Growth
5. Classificação: InternoJuly 2018 Lojas Renner S.A.
OUR BUSINESSES
5
Publicly held since 1967
Largest fashion retailer in Brazil
Target customers: 18 to 39 age
group, in the A-, B and C+ social
classes
334 stores *
Acquired in 2011
Leader in the home decor business
Target customers: 18 to 39 age
group, in the A-, B and C+ social
classes
101 stores*
Launched in 2013
Specialized in youth fashion
Target customers: 18 to 28 age
group, in the A-, B and C+ social
classes
92 stores*
*data as at Mar/18
RENNER YOUCOMCAMICADO
WHOWEARE
6. Classificação: InternoJuly 2018 Lojas Renner S.A.
OUR BUSINESSES
6
Since 2010
Complete mix of Renner,
Camicado and Youcom
Possibility of exchanges in the
stores
Launched in 2016
Curve & plus size format
Only via e-commerce
Potential for physical stores
Since 1973
29.6 MM cards
(Private Label + Co-branded)
Approximately 50% of sales
Proprietary Financial Institution in 2017
E-COMMERCE FINANCIAL PRODUCTSASHUA
WHOWEARE
7. Classificação: InternoJuly 2018 Lojas Renner S.A.
URUGUAY
3 Renner
NORTHEAST
50 Renner
19 Camicado
1 Youcom
CENTER-WEST
24 Renner
9 Camicado
3 Youcom
NORTH
20 Renner
3 Camicado
SOUTH
70 Renner
17 Camicado
30 Youcom
SOUTHEAST
164 Renner
53 Camicado
56 Youcom
GEOGRAPHICAL DISTRIBUTION
7
March 31, 2018
Expansion of Sales Area
CAGR (2013 – 2017) = 10.7%
334
101
93
Renner DC
Camicado DC
Youcom DC
WHOWEARE
URUGUAI
5 Renner
5
URU
MT
MS
DF
RS
SC
PR
SP RJ
ES
MG
PE
CE
BA
SE
RN
PB
PITO
MA
PA
APRR
AM
AC
RO
AL
4
6
10
36
3
12
2
6
4
12
9
9
4
17
34
3
4
1
1
41
23
6
3
98
3
1
16
46
14
4
8
9
GO
4
37
1
3
2
2
9
2
91
4
2
11
2
5
2
2
3
1
1
1
2
1
1
1
9. Classificação: InternoJuly 2018 Lojas Renner S.A. 9
CORPORATE GOVERNANCE
100% free float
Listed on B3 Novo Mercado
100% common shares
100% tag along
Majority of independent members
on the Board of Directors (88%)
Different executives occupying the
Chairman and the CEO positions
Permanent Fiscal Council
Committees directly linked to the Board of Directors
Own Internal Charters
(Board of Directors, Fiscal Council & Committees)
Stock Option Plan aligns interests of
executives to shareholders
Board of Directors Portal
Secretaries to the Board and Committees
Formal Appraisal of the Board of Directors and
Executive Officers
WHOWEARE
Board of Directors
CEO
Fiscal Council
Independent Auditors
Internal Auditors
Compliance
.
Shareholder’s
Meeting
Chairman
Osvaldo
Schirmer
Vice
Chairman
Carlos
Souto
Member
José
Galló
Member
Fabio
Pinheiro
Member
Heinz-Peter
Elstrodt
Member
Juliana
Rozenbaum
Member
Thomas
Herrmann
People
Committee
Sustainability
Committee
Strategic
Committee
Audit and Risk
management Committee
CEO
José
Galló
Loss
Prevention
Member
Christiane
Edington
CFO &
IRO
Laurence
Gomes
HR
Clarice
Costa
Executive Officer
IT & Mgmt.
Emerson
Kuze
Procureme
nt Fabio
Faccio
Officer
Fabiana
Taccola
Operations
Haroldo
Rodrigues
Executive Group
10. Classificação: InternoJuly 2018 Lojas Renner S.A. 10
LREN3
+2,937%
IBOV
+287%
TOTAL SHAREHOLDER RETURN
LREN3 traded at B3, capital listed since 1967
Listed on B3 Novo Mercado since July, 2005
ADR Program level 1 since February 2017, under LRENY (OTC) ticker1
Market Cap2 = R$ 21,0 billions
Average Daily Trading Volume LTM = R$ 107.3 millions
Part of the following B3 indexes: IBOVESPA, IBRX100, IBRX50, IBRA, ICO2,
ICON, IGC, IGCT, IGNM, ISE, ITAG, IVBX and MLCX
1 - Additional information regarding the ADR Program is available at the Company’s website.
2 – Data from June 29th, 2018
WHOWEARE
11. Classificação: InternoJuly 2018 Lojas Renner S.A. 11
WHAT BROUGHT US HERE
• Corporate Culture
• Consistent Positioning
• Competitive Advantages
• Business Model
• Updating Operations
12. Classificação: InternoJuly 2018 Lojas Renner S.A. 12
ENCHANT … to surpass customer expectations.
OUR WAY …to do things in a simple and agile manner with great energy and passion.
PEOPLE … to hire, develop and retain the best people.
OWNERS OF THE BUSINESS … to think and act like owners of our business unit.
OBSTINATE FOR RESULTS … to seek results and not good ideas only.
QUALITY … our products and services have the highest level of quality.
SUSTAINABILITY … businesses and attitudes based on the principles of sustainability.
SOLID CORPORATE CULTURE
Corporate Values
WHATBROUGHTUSTOWHEREWEARETODAY
13. Classificação: InternoJuly 2018 Lojas Renner S.A.
Brazil Retail 2017 (77%)
Lojas Renner 2018 (87%)
Global Fashion 2018: 65%
94% adherence in 2018
(14.511 respondent employees)
Survey run between: February to March, 2018
Zona de Indiferença
0%
Critical
Zone
High
Performance Zone 100%
50%
71%
Neutral
Zone
13
Source: Aon Hewitt
Lojas Renner 2017 (88%)
SPEAK WELL ABOUT THE COMPANY
PROUDNESS OF BEING PART OF IT
ALWAYS GO THE EXTRA MILE
In a High Performance Zone since 2011
SOLID CORPORATE CULTURE
Committed People
WHATBROUGHTUSTOWHEREWEARETODAY
15. Classificação: InternoJuly 2018 Lojas Renner S.A.
PRACTICE THE LAWS OF SIMPLICITY
1. Trust more,
control less.
2. Before acting,
ask: for what?
3. Brutal
simplification
with focus on the
business and the
customer
4. Eradicate the
over-fastidious,
enemies of
simplicity.
5. Always
remove all that
the customer does
not want to pay.
15
“Simple is harder
than complex”
And simplicity
WHATBROUGHTUSTOWHEREWEARETODAY
SOLID CORPORATE CULTURE
IT’S SIMPLE
TO BE RENNER
16. Classificação: InternoJuly 2018 Lojas Renner S.A.
“Focus is not what
not what you é o
you have to do, it is
what you have to
stop doing.”
16
Always maintaining focus...
WHATBROUGHTUSTOWHEREWEARETODAY
SOLID CORPORATE CULTURE
17. Classificação: InternoJuly 2018 Lojas Renner S.A.
There is always room
for improvement!
We love challenges: not
knowing that it is
impossible, we just go
ahead and do it!
17
Dissatisfaction with the status quo
WHATBROUGHTUSTOWHEREWEARETODAY
SOLID CORPORATE CULTURE
18. Classificação: InternoJuly 2018 Lojas Renner S.A.
“To be the brand which
stands by the modern
woman, offering a range of
styles of high quality fashion
at competitive prices and
excellence in services.
Enchanting and innovating.”
18
CONSISTENT MARKET POSITIONING
Clear Value Proposition...
WHATBROUGHTUSTOWHEREWEARETODAY
19. Classificação: InternoJuly 2018 Lojas Renner S.A.
45%
90’s 2010’s
60%
Increased presence of women in
the labor market
• Buy for the whole family
• Represent 80% of Renner’s customers
• Are responsible for 83% of the decisions on
apparel purchases
• Have achieved a growth of 82% in
purchasing power over the last decade
22%
80’s
19
Source: Valor Econômico newspaper 2014
In Brazil, women...
CONSISTENT MARKET POSITIONING
With a focus on the Woman
WHATBROUGHTUSTOWHEREWEARETODAY
20. Classificação: InternoJuly 2018 Lojas Renner S.A.
A
B
C
+
-
+
-
Renner
SocialClasses
+
-
20
Source: Ibope Inteligência 2015 and IstoÉ Dinheiro Magazine – Family Budget Survey (POF) – IBGE
R$ 20,273.00
R$ 1,910.00
R$ 5,351.00
Average
Monthly
Household
Income
CONSISTENT MARKET POSITIONING
By Social Class
24% of households
47% of total wage bill
38% of consumption
3% of households
24% of total wage bill
16% of consumption
52% of households
27% of total wage bill
39% of consumption
WHATBROUGHTUSTOWHEREWEARETODAY
22. Classificação: InternoJuly 2018 Lojas Renner S.A. 22
Engaged
people
enchant
customers
Enchanted
customers are
loyal customers
Loyal
customers
generate
consistent and
sustainable
results
Cycle of Enchantment
Enchantment – Surpassing Customer Differentials
Watch Lojas Renner’s
Culture and Enchantment
Video
24 MM opinions
collected in 2017
96.4%
Very satisfied or
satisfied
Real-life stories in which
customers are surprised
by outstanding initiatives
on the of the
employees
WHATBROUGHTUSTOWHEREWEARETODAY
COMPETITIVE ADVANTAGES
Since 1996 there are already
Stories of Enchantment
,
23. Classificação: InternoJuly 2018 Lojas Renner S.A. 23
Lifestyle: You have your style, Renner has all of them.
Each brand represents the lifestyle of a customer group based on their attitudes, interests,
values and personalities.
WHATBROUGHTUSTOWHEREWEARETODAY
COMPETITIVE ADVANTAGES
24. Classificação: InternoJuly 2018 Lojas Renner S.A. 24
Best use of shopping time
One-stop-shop for the whole family
Reduces need for markdowns
Increases opportunities for cross-selling
WHATBROUGHTUSTOWHEREWEARETODAY
Lifestyle: You have your style, Renner has all of them.
COMPETITIVE ADVANTAGES
25. Classificação: InternoJuly 2018 Lojas Renner S.A. 25
Source: Deloitte – Global Powers of Retailing 2007 and 2017
1. Federated Dpt Stores U$ 22.4
2. JC Penney U$ 18.8
3. TJX U$ 16.1
4. Gap U$ 16.0
5. KarstadtQuelle U$ 14.3
6. Khol’s U$ 13.4
7. Otto Group U$ 11.5
8. Limited Brands U$ 9.7
9. Millenium Retailing U$ 8.6
10. H&M U$ 8.4
1. TJX U$ 30.9
2. Macy’s U$ 27.1
3. Sears U$ 25.1
4. Inditex U$ 23.1
5. H&M U$ 21.7
6. Gap U$ 15.8
7. Fast Retailing U$ 14.2
8. Nordstrom U$ 14.1
9. El Corte Ingles U$ 13.1
10. JC Penney U$ 12.6
2005 2015
Largest retailers in the world market
(Net Revenue in billions)
BUSINESS MODEL ALIGNED WITH GLOBAL BENCHMARKS
WHATBROUGHTUSTOWHEREWEARETODAY
26. Classificação: InternoJuly 2018 Lojas Renner S.A. 26
Source: Company Annual Reports
WHATBROUGHTUSTOWHEREWEARETODAY
BUSINESS MODEL ALIGNED WITH GLOBAL BENCHMARKS
-0.2%
276.8%
254.5%
168.5%155.3%
16.5%
-32.3%
9.2%
TRADITIONAL RETAIL FASHION RETAILERS
% growth in net revenues from 2008 to 2017
27. Classificação: InternoJuly 2018 Lojas Renner S.A. 27
Source: Company Annual Reports
CAGR 2013 - 2017
WHATBROUGHTUSTOWHEREWEARETODAY
BUSINESS MODEL ALIGNED WITH GLOBAL BENCHMARKS
NA
28. Classificação: InternoJuly 2018 Lojas Renner S.A. 28
Operation focused on proprietary brands
Frequent collection launches
High degree of fashion appeal
Competitive prices
Products organized around life styles
Operations focused on apparel and accessories
One-stop-shop for the whole family
Multi-channel model
Supply chain proximity to accelerate the time-to-market
WHATBROUGHTUSTOWHEREWEARETODAY
BUSINESS MODEL ALIGNED WITH GLOBAL BENCHMARKS
29. Classificação: InternoJuly 2018 Lojas Renner S.A. 29
STORE
Store at the center
of everything
New supply logistics
SIMPLICITY
Revision of Processes
CSC releasing time for
the store manager
FASHION
Capture of fashion trends
Specialization of the
businesses
Communication
between stores and
purchases
Strengthening of
the chain
Quality
REACTIVITY
Improvements on the Business Model
2012
2013
2015
Until 2019
WHATBROUGHTUSTOWHEREWEARETODAY
BUSINESS MODEL ALIGNED WITH GLOBAL BENCHMARKS
30. Classificação: InternoJuly 2018 Lojas Renner S.A.
WHERE WE ARE GOING TO
• Market Consolidation
• Increased Market Share
• Expansion of Stores
• Other Concepts
• Operation Abroad
• Integration of the Channels
30
31. Classificação: InternoJuly 2018 Lojas Renner S.A.
TOP 5 RANKING
1 Renner
2° C&A
3° Riachuelo
4° Pernambucanas
5° Marisa
16%
Market
concentration of
other sectors in Brazil
31
12%
Fragmented apparel market with opportunities for consolidation
Source: Jornal DCI, IBOPE, Euromonitor, IBGE, Bank of America Merril Lynch and Lojas Renner estimates.
Note: Data for C&A and Pernambucanas are estimated.
20% of existing
stores closed
between 2014
and 2017
Electroelectronics
top 5 = 50%
Supermarkets
top 5 = 50%
Drugstores
top 3 = 24%
WHEREWEAREGOINGTO
MARKET CONSOLIDATION
Other
Retailers
Other
Retailers
+
Informality
32. Classificação: InternoJuly 2018 Lojas Renner S.A. 32
INCREASED MARKET SHARE
Note: Card Share: % of clients (target A-, B, C+) with Renner card in relation to the total of the public target of the region
Revenue Share: % of Renner revenue (R$) in relation to the qualified demand (R$) of the region
Source: IBOPE 2016, Renner and Conductor
4
7
5
7
12
26%
17% 16%
12%
10%10%
6% 5% 6% 5%
Sul Sudeste Centro-Oeste Nordeste Norte
Share Cartão Share Venda
10 MM 37 MM 6 MM 10 MM 4 MM
Target Population
Average store
age by region
(in years)
South Southeast Midwest Northeast North
Share of cards Share of sales
WHEREWEAREGOINGTO
33. Classificação: InternoJuly 2018 Lojas Renner S.A. 33
PMC: government statistics office’s(IBGE) Monthly Retailing Survey index
INCREASED MARKET SHARE
WHEREWEAREGOINGTO
34. Classificação: InternoJuly 2018 Lojas Renner S.A. 34
Target of 450 Renner stores by 2021
EXPANSION OF STORES
CURRENT CHAIN OF 334 STORES
92% shopping centers / 8% street-side
47% in maturation
Presence in +/- 50% of all Brazilian shopping
centers
Existing Shopping
Centers
New Shopping
Centers
Street Side Stores
Cities with
Renner stores
Cities without
Renner stores
Grandes Centros
Cidades
Menores
Micro-regions
PRODUCTIVITY OF EXISTING STORE CHAIN
Re-dimensioning of store meterage
Optimization of sales areas by absorption
Updating of store layout
Adaptation of visual merchandising
Store modernization
Better shopping experience
WHEREWEAREGOINGTO
35. Classificação: InternoJuly 2018 Lojas Renner S.A. 35
125 lojas
Potencial
300 lojas
Nationwide coverage
Brand recognition
Possibility of franchises and
multibrands
Adjustments to product mix
(imported items)
Revision of sales areas
Breakdown of Net Revenue 2017 Store Expansion Plan through 2021
Target of Camicado and Youcom stores in 2021
Launched in 2013
Acquired in 2011
92.5%
6.1%
1.4%
OTHER CONCEPTS
WHEREWEAREGOINGTO
36. Classificação: InternoJuly 2018 Lojas Renner S.A. 36
Debut in the Uruguayan market in 2017
5 stores operating with + 2 in 2018
Stores in shopping centers and street side
Same positioning as Renner in Brazil
Test of Renner business model outside Brazil
Learning curve for new markets, exports and FX
Adaptation of management processes
Model replicable for other countries
OPERATION ABROAD
WHEREWEAREGOINGTO
37. Classificação: InternoJuly 2018 Lojas Renner S.A. 37
Leverage through brand power
Relevance in mobile
Availability of services, technology and speed
Operational excellence in logistics
Optimization in distribution (physical + online)
Lower delivery costs with instore pickup
Single inventory and with accuracy
No ticket differentiation between channels (online/offline)
Fostering traffic flows through the stores for exchanges and
instore pickup
Leverage e-commerce with physical retailing structure (survey,
design, modeling, purchases, IT, marketing, etc.)
INTEGRATION OF ONLINE AND OFFLINE CHANNELS
WHEREWEAREGOINGTO