Cia. Hering 1Q15 earnings presentation

1. 1Q15 Results
Conference Call
May 08th, 2015 – 9 a.m. (BrT)

2. DISCLAIMER
This presentation contains forward-looking
statements regarding the prospects of the
business, estimates for operating and financial
results, and those regarding Cia. Hering'sgrowth
prospects. These are merely projections and, as
such, are based exclusively on the expectations of
Cia. Hering management concerning the future of
the business and its continued access to capital to
fund the Company’s business Plan. Such forward-
looking statements depend, substantially, on
changes in market conditions, government
regulations, competitive pressures, the
performance of the Brazilian economy and the
industry, among other factors and risks disclosed in
Cia. Hering’sfiled disclosure documents and are,
therefore, subject to change without prior notice.

3. 1Q15
Outlook
Q&A
AGENDA

4. 1Q15 Results
4
GROSS REVENUES AND BREAKDOWN BY BRAND
R$ MILLION – DOMESTIC MARKET
Gross revenues of R$ 405.8 million, influenced by both franchises and multibrand retraction
given environment deterioration and higher risk aversion.
GROSS REVENUES BREAKDOWN PER CHANNEL
DOMESTIC MARKET EX-‘OTHER REVENUES’
1Q15, R$ MILLION - CHANGE 1Q15 x 1Q14
Others
1Q15 1Q14 Change
405.8 458.7 -11.5%
302.6 342.7 -11.7%
44.9 51.9 -13.5%
32.3 34.5 -6.3%
20.9 21.9 -4.6%
5.2 7.8 -33.5%

5. 1Q15 Results
5
HERING STORE NETWORK
GROSS SALES ‘SELL-OUT’, R$ MILLION
Gross revenues of R$ 295.6 million (+3.9%), as a
result of 47 stores’ net addition, which
compensated SSS decline.
¹ Stores opened in the last twelve months net from closings.
SSS: -1.9%
SSS of own stores: +4.5%
More efficient supply management favors
better sales performance in own stores and
franchises that promoted adjustments.

6. 1Q15 Results
6
GROSS PROFIT
R$ MILLION AND GROSS MARGIN
EBITDA
R$ MILLION AND EBITDA MARGIN
EBITDA reached R$ 47.1 million, down 50.1%
mainly due to sales and margin gross decrease,
generating operational deleveraging.
Gross margin contraction of 740 bp due to higher
promotional activity, especially related to past
collections (‘saldos‘), and sales retraction, insufficient
to dilute fixed costs.

7. 1Q15 Results
7
NET INCOME
R$ MILLION AND NET MARGIN
CAPEX
R$ MILLION
Investments concentrated on IT, with SAP
implementation planned for mid-year and
production and logistics especially in plants
located in the state of Goiás.
Net income of R$ 41.5 million (-35.7%), mainly
explained by a decrease in operating income,
partially offset by higher net financial income and
lower effective income tax rate compared to 1Q14.

8. 1Q15 Results
8
CASH FLOWS
R$ MILLION
Cash flow of R$ 62.5 million in 1Q15, R$ 35 million higher 1Q14
Negative EBITDA generation offset lower Income Tax and Social Contribution and
improved working capital, especially in reducing accounts receivable.
Cash Flow - Consolidated 1Q15 1Q14 Chg.
EBITDA 47,141 94,497 (47,356)
No cash items 12,047 6,209 5,838
Current Income tax and Social Contribution (7,638) (28,818) 21,180
Working Capital Capex 24,917 (32,835) 57,752
Decrease in trade accounts receivable 117,014 38,665 78,349
(Increase) in inventories (41,342) (24,026) (17,316)
(Decrease) in accounts payable to suppliers (22,955) (16,230) (6,725)
(Decrease) in taxes payable (17,352) (30,185) 12,833
Others (10,448) (1,059) (9,389)
CapEx (13,959) (11,556) (2,403)
Free Cash Flow 62,508 27,497 35,011
Reconciliation from accounting Cash flow to adjusted Cash flow (R$ thousand) 1Q15 1Q14 Chg.
DFC - Cash provided by operating activities 88,638 45,781 42,857
Adjustment – Financial items allocated to operating cash (12,171) (6,728) (5,443)
Unrealized exchange and monetary variation (419) (437) 18
Financial Result (12,330) (6,733) (5,597)
Interest paid on loans 578 442 136
DFC - Cash flows from investing activities (13,959) (11,556) (2,403)
Free Cash Flow 62,508 27,497 35,011
* The adjusted cash flow as presented above is not a Brazilian Generally Accepted Accounting Practice and IFRS financial performance
measurement. The information on this table was calculated for the management of the Company and has not been audited by
independent auditors

9. 1Q15 Results
9
Dividends payout
R$ MILLION
Buyback Program
IN THOUSAND OF SHARES
24% of the plan was
executed until now
(1.2 million shares)
Buyback Program will timely continue to run
and is an alternative source of value creation to
shareholders.
Payout of 46% in 2014. R$ 50 million
in dividends¹ to be paid in May, 27th
¹ Corresponding to R$ 0.30596728 per share, based on the shareholders’ position dated April
29th, 2015, approved at the General Shareholders Meeting.

10. 1Q15 Results
Outlook
Q&A
AGENDA

11. 1Q15 Results
11
Priority for actions that combine sales growth and margin recovery…
Sales Growth - Focus on improving assortment and stores supply
:: Assortment – Move on with initiatives implemented throughout 2014
looking to further improvement in product offering
:: Supply - review of Supply strategy to the stores and relationship with
channels in order to increase control over sell-out and stores’ efficiency
Margin recovery
:: Pricing Strategy - Prices revision and products features -> to be applied to
2H15 collections on
:: Reduction of Leftovers Inventories - manufacturing calendar normalization
and inventories reduction after SAP go-live (Jul, 2015) -> lower past colections
sales (“saldos”)
:: Reduction of Imported Mix
Expenses Reduction

12. 1Q15 Results
12
Hering for you Development
Model and assortment maturity
Store network extension for subsequent creation of franchises’ network
Webstores
Boost sales through the new platform
Multichannel strategy
…without losing focus on building new growth fronts
DZARM. New Business Plan
Relaunch plan implementation
Distribution channels expansion and store opening in the coming quarters

13. AGENDA
1Q15
Outlook
Q&A

14. INVESTOR RELATIONS TEAM
Fabio Hering – CEO
Frederico Oldani – CFO and IRO
Bruno Salem Brasil – IR Manager
Caroline Luccarini – IR Analyst
www.ciahering.com.br/ir
+55 (11) 3371 -4867/4805
ri@hering.com.br