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. 2Q09 Highlights
CIA. HERING ENDS 2Q09 WITH GROWTH
• Gross revenue in domestic market up 48.9%
• Hering brand sales up 57.7%
• Same-store sales growth of 29.3% in the Hering Store Network
• EBITDA Margin up 4.1 percentual points
• 14 Hering Stores and 2 PUC Stores were opened in the 2Q09
4
8. Gross Revenue – Domestic Market (R$ million)
370.1
By Distribution Channel
49.6%
174.3
205.8 253.4
53.0%
Multi
108.5 42.6%
Brand 130.8
138.2
70.9
44.6% Franchise/ 195.7
Own Store
97.3
122.6
67.3
2Q08 2Q09 1H08 1H09
Expressive growth on Hering Store and PUC networks, as well as in
multi brand.
8
9. Gross Revenue – Foreign Market (R$ million)
Private Label vs. Own Brands
18.6
54.8%
59.8% 10.2
8,7
Private
Label
100.0% 8.4
5.1
100.0% 3.5 0.3%
8.4 8.4
3.2% Own
3.6 3.5 Brands
2Q08 2Q09 1H08 1H09
Focus on Own Brands sales in the foreign market mainly in Latin
America and Mercosur.
9
10. Gross Profit
Gross Profit (R$ million) and Gross Margin (%) 44.1% 0 .4 5
14 0 43.4%
43.4% 0 .4
12 0
0 .3 5
1 00
45.4% 1 00
9 0 0 .4 5
44.9% 0 .3
8 0
44.4% 0 .4 8 0
7 0
6 0
0 .3 5
37.8% 133.6 0 .2 5
43.3%
6 0
0 .3
5 0
97.0
0 .2
76.5
4 0
0 .2 5 4 0
3 0
53.4 0 .2
0 .1 5
2 0 2 0
0 .1 5
1 0
0 0 .1
0 0 .1
2Q08 2Q09 1H08 1H09
Without AVP With AVP
Excluding the amount of R$ 4 million registered as AVP
(Current Value Adjustment), the gross margin in the 2Q09
would be 45.4% and in the 1H09 it would be 44.1%. 10
11. EBITDA
EBITDA (R$ million) and EBITDA Margin (%)
1 00 0 .2
9 0 0 .1 8
8 0 0 .1 6
17.3%
1 2 0 0 .2 5
7 0 0 .1 4
14.6%
1 00
0 .2
6 0
2.7 p.p 0 .1 2
8 0
19.1% 5 0 0 .1
4.1 p.p
0 .1 5
60
15.0% 4 0 0 .0 8
62.8%
0 .1
3 0 0 .0 6
40
53.3
80.6% 2 0 0 .0 4
20
0 .0 5
32.8
32.5 1 0 0 .0 2
18.0
0 0
0 0
2Q08 2Q09 1H08 1H09
The higher EBITDA margin is due to the better operational
performance of the Company and the dilution of the fixed expenses.
11
12. Stores Distribution
Fourteen Hering Stores were opened in the quarter, of which 2 owned
stores. Two PUC Stores were also opened. Our multibrand clients
totaled 15,114 in 23 brazilian states.
12
13. Distribution Network (number of stores)
Evolution of the Distribution Network
Goal: 57 329
311 314
22 22
22
248 63
209 59 Goal: 224
61
23 Goal: 172
19 44
39
230 231 244
151 181
2006 2007 2008 1Q09 2Q09
Abroad PUC Hering
For 2009, the openings are already mapped and in line with the
strategic growth plan.
13
14. Hering Store Expansion
Expansion Plan
57 325
38
268 49 244
49 230
30 195
181 274
151 226
193 205
156 167
141
37 42 51 39
10 25 28
2006 2007 2008 2009* 2010* 2Q08 2Q09
Owned Stores Franchises
*estimated
The expansion plan is maintained with 81 stores to be opened
up to the end of 2010.
14
15. HS network: New project versus old project
New Project Old Project
111 stores 133 stores
45% 55%
Out of the total 244 Hering Stores, 133 are already in the new
architectural project, 11 of which were remodeled in 2Q09.
15
16. Hering Store Indicators
Hering Store Performance 2Q08 2Q09 Chg. 1H08 1H09 Chg.
Number of Stores 195 244 25.1% 195 244 25.1%
Franchise 167 205 22.8% 167 205 22.8%
Own 28 39 39.3% 28 39 39.3%
Sales (R$ thousand) 109,372 162,989 49.0% 178,024 259,446 45.7%
Same Store Sales growth 38.4% 29.3% -9.1 p.p. 39.0% 25.3% -35.1%
Sales Area (m²) 26,124 31,275 19.7% 26,124 31,275 19.7%
Sales (R$ per m²) 4,259 5,301 24.5% 7,085 8,541 20.6%
Check-Outs 1,145,453 1,607,123 40.3% 2,061,030 2,881,380 39.8%
Units 2,657,161 3,598,040 35.4% 4,807,703 6,497,557 35.1%
Average Sales Ticket (R$) 95.48 101.40 6.2% 86.38 90.00 4.2%
The increase of 49.0% on sales is a result of the 19.7% in sales area,
29.3% increase in SSS and a 6.2% growth in the average sales ticket,
reflecting the increase of fashion and jeanswear products
participation.
16
17. Capex (R$ million)
By activity
15.0 24.7%
0.5
52.0% 3.3
10.0 Outros 11.3
0.2 39.4% 0.3
1.7 2.0
23.5% TI 5.6
4.8
0.1 16.1%
3.6 4.7
1.3
33.3% Lojas
2.4
5.6 23.2%
4.5 75.6% 4.3
1,1 Indústria
2Q08 2Q09 1H08 1H09
Capex destinated to the stores´ opening and remodeling, as well as
equipment acquisition to update the industrial units.
17
18. Indebteness
Indebtedness Evolution Short Term x Long Term
201.3
184.6
Long
Term
Short 45%
4.6 Term
3.5
55%
11.0 -0.1
-0.7
0.1
2005 2006 2007 2008 2Q09
-4.0
-33.4
Total Debt = R$ 96.5 million
Net Debt/EBITDA*
Net Debt (R$ million)
* EBITDA of the last 12 months
18
19. Financial Result
R$ thousand 2Q08 2Q09 Chg. 1H09 1H08 Chg.
Net Financial Results (6,098) (200) -96.7% (7,579) (1,997) -73.7%
Net Foreign Exchange (136) 3,223 -2469.9% 123 3,922 3088.6%
Net Financial Derivative Instruments Results - 3,021 N.D - 25,059 N.D
Total Financial Results (6,234) 6,044 -197.0% (7,456) 26,984 -461.9%
• Positive Financial Result
– On june 30 2009, Cia. Hering registered a revenue of R$ 3.0 million due to the reversal of part of
the expense accrued at the end of 2008, referring to the fair value of the derivatives.
• Swap
– April/09 and May/09 verifications: exchange rate lower than R$/USD 2.80
– On 05/04/09, Cia. Hering renegotiated the contract, eliminating nine monthly verifications, from
Jun/09 to Feb/10 (included), at a cost of R$ 3.2 million.
– On 07/07/09 the Company renegotiated the contract, eliminating four monthly verifications, from
Mar/10 to Jun/10(included), at a cost of R$ 2.0 million.
• Fair Value of Derivatives
– On 07/30/09 the fair value of derivatives accounted on the Company’s liabilities in its financial
statements, totaled R$ 3.2 million regarding the current operations at that time.
The Company will remain searching alternatives to minimize and/or to eliminate the exchange risk of
the remaining derivatives operations: 19
20. Shareholder’s Remuneration
Payment of Interest on Shareholder’s Equity
The payment on 10/August/09 in the amount of R$ 15.2 million refers to:
R$0,1411/share related to the year ended on December 31 2008;
R$0,1405/share related to the first half of 2009;
Dividends
On May 11th 2009 the amount of R$ 10.6 million (R$ 0.19616/share) was paid,
regarding the 2008 year ended on December 31 2008, in accordance to the General
Shareholders´ Meeting held on April 28th 2009.
Date of Gross Value Value per
Shareholders´ remuneration Year End
Payment (R$ million) Share (R$)
Payment of Interest on Equity 2007 02/22/08 4,853 0.09000
Payment of Interest on Equity 2008 09/17/08 4,853 0.09000
Dividends 2008 05/11/09 10,578 0.19616
Payment of Interest on Equity 2008 08/10/09 7,609 0.14110
Payment of Interest on Equity 1H09 08/10/09 7,576 0.14050
20
22. Strategy & Outlook
Hering brand and Hering Store network
Continuity of brand potential exploration
Sales increase (per square meter and SSS) in existing stores
Ongoing expansion plan – 325 stores by the end of 2010
Communication strategy focusing on sales points.
PUC and dzarm. brands
Development of a plan for the children segment
dzarm. brand repositioning plan currently being carried out.
22
23. Investor Relations
Fabio Hering – CEO and IR Director
Frederico de Aguiar Oldani – CFO
Karina Koerich – IR Manager
Gracila Camargo Lopes – IR Analyst
Tel.: +55 (47) 3321-3469
3321-
E-mail: ri@heringnet.com.br
mail:
Website:
Website: www.ciahering.com.br/ir
Investor Relations Consulting Firm
FIRB – Financial Investor Relations Brasil
Ligia Montagnani – IR Consultant
Tel: +55 (11) 3897-6857
E-mail: ligia.montagnani@firb.com
