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'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.
2
4. Quarter Highlights
RESULTS SHOW GROWTH POTENTIAL
• Gross Revenues in domestic market increased 59.0%
• Hering brand sales rose 72.6%
• EBITDA 166.1% higher
• Same-store sales up 38.4% in Hering Stores
CONTINUED GROWTH PLAN
• Successful price repositioning of the Hering brand
• Owned and franchised stores opening as planned
• Hering Store card implementation and in customer acquisition phase
• Marketing Campaign creates strong identification with consumers
SUSTAINABLE GROWTH
• Cash Flow of R$ 11.4 million
• Capex of R$ 10.0 million
4
6. Gross Revenues (R$ million)
By Market
146.9
Exports
46.5%
100.2
34.9%
Domestic
Market
59.0%
Focus on domestic market.
6
7. Gross Revenues – Domestic Market (R$ million)
By Brand By Distribution Channel
138.2 138.2
Others
Dzarm
59.0%
PUC
86.9 86.9 Multibrand
Hering
17.0%
44.4%
28.1%
Franchised/
Owned
72.6%
78.0%
Price repositioning and expansion of distribution
channels increased sales.
7
8. Gross Revenues – Exports (R$ million)
Private Label vs. Own Brands By Destination
18
16
13.3
13.3 34.9% 14
1,0
12
2.2
8.7 10
1.9
8.7 Other
0.3 Europe
47.6% Private 8 3.3 1.1
0,2 Latin America
Label
6 3.3 Mercosul
4 6.5
1.1% Own North America
Brands
2 3.7
0
2Q07 2Q08
Own brands are the target to
export market.
8
9. Gross Profit and EBITDA (R$ million)
Gross Profit and Gross Margin EBITDA and EBITDA Margin
44.4%
9.7 p.p.
34.7%
6.9 p.p.
84.0% 166.1%
53.4
29.0
2Q07 2Q08
Sales increase, costs drop and larger own stores
participation.
9
10. Hering Store Chain Expansion
195 Hering Stores
Number of Stores 47 PUC Stores
Distribution Centers
9,815 Multibrand Stores (Hering)
Our brands are in 22 brazilian states through franchises, owned stores and
multibrand distribution.
10
11. Hering Store Chain Expansion (cont.)
Expansion Plan
325
48
277
53
224
29
195
181 274
155 226
151
188
167
156
141 144
51 51
10 25 28 36
11
2006 2Q07 2007 2Q08 2008* 2009* 2010 *
* estimaded Franchises Owned Stores
13 Hering Stores were opened in the second quarter.
By the end of 2008, there will be 43.
11
12. Distribution Network (number of stores)
Distribution Network Evolution
302
22
264
248
22 56
23
209 216 47
19 21 44
39 40
Goal: 172
224
195
181
151 155
2006 2Q07 2007 2Q08 2008 *
* estimated Hering PUC Foreign
Fifteen franchises opened in this quarter: thirteen Hering
Stores and two PUC Stores.
12
13. Expansion Plan for 2008 - Franchises
Quarter State City Location Status
Status
1Q08 SP São Paulo Bourbon Shop. Pompéia Opened
1Q08 PI Teresina Shop. Riverside Walk Opened
1Q08
2Q08 SP São Paulo Rua Dr. Diogo de Farias Opened
2Q08 SP Sta. Barbara d'Oeste Tivoli Shopping Opened 2 Franchises Opened
2Q08 SP São Paulo Rua Juventus Opened
2Q08 MG Juiz de Fora Independência Shopping Opened 2Q08
2Q08 SP Guaratingueta Shopping Buriti Guará Opened
10 Franchises Opened
2Q08 PR Maringa Shop. Avenida Center Opened
2Q08 PB João Pessoa Shopping Tambiá Opened
3Q08
2Q08 SE Aracaju Shopping Jardins Opened
2Q08 15 Franchises Confirmed
PE Caruaru Caruaru Shopping Opened
2Q08 DF Brasilia Liberty Mall Opened
3Q08 SP Botucatu R. Monsenhor Ferrari Confirmed 4Q08
3Q08 MG Patos de Minas R. Agenor Maciel Confirmed 4 Franchises Confirmed
3Q08 MG Divinopolis R. Antonio O. de Morais Confirmed
2 Franchises Forecasted
3Q08 SC Florianópolis Floripa Shopping Confirmed
13
14. Expansion Plan for 2008 – Franchises (cont.)
Quarter State City Location Status
3Q08 BA Feira de Santana Shopping Iguatemi Confirmed
3Q08 SP Campinas Campinas Shopping Confirmed
3Q08 SP Sao Vicente Brisamar Shopping Confirmed
3Q08 MG Tres Coraçoes R. Juliao Arbex Confirmed
3Q08 MG Montes Claros Montes Claros Shopping Confirmed
3Q08 RS Porto Alegre Barra Shopping Sul Confirmed
3Q08 SP Sao Paulo Shop. Boulevard Tatuape Confirmed
3Q08 SP Sao Paulo R. Min.Roberto Cardoso Alves Confirmed
3Q08 SP Sao Paulo R. Bernardino de Campos Confirmed
3Q08 PE Recife Shop. Plaza Casa Forte Confirmed
3Q08 SP Jau Rua Amaral Gurgel Confirmed
4Q08 PR S. J. Pinhais Shopping Sao Jose Confirmed
4Q08 SP Limeira Center Plaza Shopping Confirmed
4Q08 SP Itatiba R. Rui Barbosa Confirmed
4Q08 RO Porto Velho Porto Velho Shopping Confirmed
4Q08 SC Criciuma Shopping Della Giustina Forecasted
4Q08 SC Bauru Bauru Shopping Forecasted
14
15. Expansion Plan for 2008 – Owned Stores
Status
Quarter State City Location Status
2Q08
2Q08 RJ Rio de Janeiro Ilha Plaza Shopping Opened
3 Stores Opened
2Q08 SP Taboão da Serra Shopping Taboão Opened
2Q08 PR Curitiba Palladium Shop. Center Opened
3Q08
3Q08 PR Curitiba Rua XV de Novembro Confirmed
4 Stores Confirmed
3Q08 SP São Paulo Shopping Penha Confirmed
3Q08 RJ Rio de Janeiro Shopping Tijuca Confirmed
4Q08
3Q08 SP São Paulo Shopping Metro Itaquera Confirmed
1 Store Confirmed
4Q08 SP Itupeva Premium Outlets Sao Paulo Confirmed
4Q08 3 Store Forecasted
RJ Rio de Janeiro Copacabana Forecasted
4Q08 RJ Rio de Janeiro Shopping Grande Rio Forecasted
4Q08 RJ Rio de Janeiro Shopping Carioca Forecasted
15
16. Hering Store Network - Indicators
2Q07 2Q08 var. 1H07 1H08 var.
Number of Stores 155 195 25.8% 155 195 25.8%
Franchises 144 167 16.0% 144 167 16.0%
Owned Stores 11 28 154.5% 11 28 154.5%
Sales (R$ thous.) 66,681 109,372 64.0% 108,834 178,024 63.6%
Same Store Sales Growth 38,4% 39.0%
Sales Area (m²) 21,047 26,124 24.1% 21,047 26,124 24.1%
Sales per m² (R$) 3,190 4,259 33.5% 5,231 7,086 35.5%
Check-outs (thous.) 687 1,145 66.7% 1,253 2,061 64.6%
Units (thous.) 1,617 2,657 64.3% 2,927 4,808 64.3%
Average Sales Ticket (R$) 97.04 95.48 -1.6% 86.86 86.38 -0.6%
16
17. Investments (R$ million)
By Activity
10,0 Others
10 0.2
1.6
IT
8 3.6
6 Stores
4,3
4 0,6 0.2 4.6
1.7
Industry
2
1.9
0
2Q07 2Q08
Investments to remodel and open owned stores and
update industrial technology.
17
18. Indebtedness
Indebtedness Evolution Short Term X Long Term
Short Term
44%
Long Term
56%
Total Debt = R$ 132.0 million
Adequate cash to support
Net Debt/ EBITDA*
growth plan.
Net Debt(R$ million)
* Last 12 months EBITDA
18
22. Strategy & Outlook
Actions to assure the growth strategy consolidation
Expansion of Hering Store chain – 325 stores until 2010
New architectural project for PUC Stores
Business Plan for dzarm. brand for the second half of 2008
Continuity of the marketing campaign “eu uso Hering desde sempre”
22
23. Investors Relation
Fabio Hering – Vice President and IR Director
Vilmar da Costa – CFO
Karina Koerich – IR Manager
Tel. +55 (47) 3321-3469
E-mail: ri@heringnet.com.br
Website: www.ciahering.com.br/ri
Investor Relations Consulting Firm
FIRB – Financial Investor Relations Brasil
Phone: +55 (11) 3897-6857
e-mail: eduardo.campos@firb.com
