This presentation contains forward-looking statements regarding the
prospects of the business, estimates for operating and financial results, and
those regarding Cia. Hering's growth 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’s filed disclosure documents and are, therefore, subject to
change without prior notice.
Gross Revenues (R$ million)
R$ 43.7 R$ 51.9
Market R$ 7.5 R$ 8.0+7.5%
R$ 454.3 R$ 466.7+2.7%
Multibrand Retail Franchise Webstore Own Stores
Gross Revenues per Channel (R$ million)
Gross revenues of R$ 466.7 million (+2.7%), mainly due to a growth below
the expected in the franchise channel.
Hering Store network (Sell Out R$ million)
273.4 273.4 273.4 284.6
1Q13 Expansion SSS 1Q14
SSS volatility throughout the quarter
Vacation and fall collections + End of year RAPA
Redeeming period for the Bonus Card.
Hering Store network growth mainly due to store openings.
GROSS PROFIT AND EBITDA
EBITDA generation impacted by lower sales level associated with expenses growth due
to the new organizational structure.
Gross Profit and Gross Margin EBITDA and EBITDA Margin
Gross Profit Gross Margin Cash Gross Margin
EBITDA EBITDA Margin
NET INCOME AND CAPEX
Decrease of 6.9% in Net Income in the quarter, in line with EBITDA. CAPEX in-line with
Company’s annual budget.
Net Income (R$ million) Capex (R$ million)
Net Income Net Margin
Industry IT Others Stores
Free Cash Flow of R$ 27.5 million, a R$ 8.6 million reduction in comparison to
1Q13, due to lower EBITDA.
Cash Flow - Consolidated 1Q13 1Q14 Chg.
EBITDA 102,211 94,497 (7,714)
No cash items 2,427 2,477 50
Current Income tax and Social Contribution (30,417) (28,818) 1,599
Working Capital Capex (29,686) (29,103) 583
Decrease in trade accounts receivable 20,501 38,665 18,164
(Increase) in inventories (30,323) (21,146) 9,177
(Decrease) in accounts payable to suppliers (2,309) (16,230) (13,921)
(Decrease) in taxes payable (19,512) (30,185) (10,673)
Others 1,957 (207) (2,164)
CapEx (8,478) (11,556) (3,078)
Free Cash Flow 36,057 27,497 (8,560)
* Dividends: approved by the General Shareholders’ Meeting held on Apr 23rd 2014 the distribution of additional dividends
in the amount of R$ 50.0 million (R$ 0.3037 per share) to current shareholders on the date, correspondent to the utilization
of the retained earnings reserves. Dividends shall be paid by May 28th 2014.
Challenging scenario remains in 2Q14
Associated with the macroeconomic scenario and the World Cup.
Sales and margin growth should be negatively impacted.
Initiatives to be implemented mid-year on
Launch of 1st Hering For You store;
Hering Store: improvements in product assortment and the re-launching of the basics starting in
the summer collection;
dzarm.: new business plan;
Sustaining both expansion plan and growth in the multi-brand retail;
Webstores’ platform substitution.
INVESTOR RELATIONS TEAM
Fabio Hering – CEO
Frederico Oldani – CFO and IRO
Bruno Salem Brasil – IR Manager
Daniel Popovich – IR Analyst
Tel. +55 (11) 3371-4867