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. 3Q08 Highlights
RESULTS SHOW GROWTH POTENTIAL
• Gross revenue in domestic market increased 53.8%
• Hering brand sales rose 66.4%
• Same-store sales for the Hering Stores grew 25.4%
• EBITDA Margin of 16.4%, +4.7 p.p over 3Q07
CONTINUED GROWTH PLAN
• Price repositioning well accepted by the consumers
• Continuous store expansion plan
• Marketing campaign “eu uso Hering desde sempre” with a new approach
• Actions focused on improving the Hering Store card base
SUSTAINABLE GROWTH
• R$ 5.3 million cash flow
• R$ 10.3 million capex
4
7. Gross Revenue – Domestic Market (R$ million)
By Brand By Distribution Channel
147.3 147.3
150 150
3.0 Others
13.0 dzarm 84.0
130 53.8% 130
PUC
15.7
110 95.8 115.6 110
95.8 Multi-brand
90 2.9 15.8% 90
11.2 56.7
Hering
12.2 28.3%
70 70 48.3%
69.5
63.3
50 50
66.4%
Franchised /
30 30 39.1
Owned
61.8%
10 10
-10 3Q07 3Q08 -10 3Q07 3Q08
Consolidation of the strategy for the
Hering brand pushed up the sales.
7
8. Gross Revenue – Foreign Market (R$ million)
Private Label vs. Own Brands By Destination
20
18
16 14.6 37.0% 14.6
14 10.0
4.2
12
10 58.1% 9.2 9.2
0.3
North America
8 4.2 Private 6.5
6 Label
7.0 Mercosul
4 4.6 5.0 Own Brands 0.4 Europe
8.8%
2.2
2 Latin America
1.1 Others
1.2
0 0.6
3Q07 3Q08 3Q07 3Q08
Own Brands are the focus for the foreign market.
8
9. Gross Profit and EBITDA (R$ million)
Gross Profit and Gross Margin Adjusted EBITDA and EBITDA Margin
45.5%
7.6 p.p.
58,3
37.9%
35,0 66.4%
4.7 p.p. 16.4%
11.7%
21.1
10.8
95.3%
3Q07 3Q08 3Q07 3Q08
Sales increase, costs drop and
larger participation of own stores.
9
10. Stores Distribution
Brands are present in 22 brazilian states with 209 Hering
Stores, 50 PUC Stores and 14,272 clients in the multi-brand retail. 10
11. Hering Store Chain Expansion
Expansion Plan
325
48
277
48
229
209 20
181
274
151 160
226
192
176
156
141 146
37 51 51
10 25 33
14
2006 3Q07 2007 3Q08 2008* 2009 * 2010 *
Franchise Owned Stores
14 Hering Stores were opened in the third quarter.
By the end of 2008, there will be 20 more.
11
* estimated
12. Distribution Network (number of stores)
Distribution Network Evolution
308
281 22
248 22
57
225 23 50
209 23
19 44
42
39 Goal: 224
Goal: 172
229
209
181
151 160
2006 3Q07 2007 3Q08 2008
*
Hering PUC Abroad
Seventeen stores were launched in the quarter:
14 Hering Stores and three PUC Stores.
12
* estimated
13. Expansion until September 2008 - Franchise
Status
Period State City Location Status
1Q08 PI Teresina Shopping Riverside Walk Opened
1Q08 SP São Paulo Bourbon Shopping Pompéia Opened 1Q08
2Q08 SP São Paulo Rua Dr. Diogo de Farias Opened
2 Franchises opened
2Q08 SP Santa B.D'Oeste Tivoli Shopping Opened
2Q08 SP São Paulo Rua Juventus Opened
2Q08 MG Juiz de Fora Independência Shopping Opened 2Q08
2Q08 SP Guaratinguetá Shopping Buriti Guará Opened
2Q08 PB João Pessoa Shopping Tambiá Opened 10 Franchises opened
2Q08 SE Aracaju Shopping Jardins Opened
2Q08 PR Maringá Shopping Avenida Center Opened
2Q08 PE Caruaru Shopping Caruaru Opened 3Q08
2Q08 DF Brasília Liberty Mall Opened 10 Franchises opened
3Q08 MG Divinópolis Rua A.Olimpio de Morais Opened
3Q08 SP Botucatu Rua Monsenhor Ferrari Opened
3Q08 SC Florianópolis Floripa Shopping Opened
3Q08 SP São Vicente Brisamar Shopping Opened
3Q08 SP Campinas Campinas Shopping Opened
3Q08 BA Feira de Santana Shopping Iguatemi Opened
3Q08 MG Patos de Minas Rua Agenor Maciel Opened
3Q08 SP Jau Rua Amaral Gurgel Opened
3Q08 PR S. José dos Pinhais Shopping São José Opened
3Q08 SP São Paulo Rua Bernardino de Campos Opened
13
14. Expansion Plan for the 4Q08 - Franchise
Status
Period State City Location Status
4Q08 SP São Paulo Shopping Metrô Blvd. Tatuapé Confirmed
4Q08
4Q08 SP São Paulo Rua Min. Roberto Cardoso Alves Confirmed
4Q08 PE Recife Shopping Plaza Casa Forte Confirmed
4Q08 SP Votuporanga Rua Pernambuco Confirmed
20 Franchises confirmed
4Q08 SC Criciuma Shopping Della Giustina Confirmed
4Q08 MG Três Corações Rua Julião Arbex Confirmed 1 Franchise forecasted
4Q08 GO Rio Verde Shopping Rio Verde Confirmed
4Q08 SP Limeira Center Plaza Shopping Confirmed
4Q08 SC Jaraguá do Sul Shopping Center Breithaupt Confirmed
4Q08 MG Montes Claros Montes Claros Shopping Center Confirmed
4Q08 SP São Paulo Shopping Central Plaza Confirmed
4Q08 RO Porto Velho Porto Velho Shopping Confirmed
4Q08 RS Porto Alegre BarraShoppingSul Confirmed
4Q08 RJ Macaé Shopping Plaza Macaé Confirmed
4Q08 GO Anápolis Brasil Park Shopping Confirmed
4Q08 SC Itajaí Itajaí Shopping Confirmed
4Q08 SP Bauru Bauru Shopping Confirmed
4Q08 PR Curitiba Shopping Jardins das Américas Confirmed
4Q08 SP São B. do Campo Loja de Rua Confirmed
4Q08 SP Pindamonhangaba Rua Bicudo Leme Confirmed
4Q08 SP Taubaté Taubaté Shopping Forecasted
14
15. Expansion Plan for 2008 – Owned Stores
Status
Period State City Location Status
2Q08 RJ Rio de Janeiro Ilha Plaza Shopping Opened
2Q08 SP São Paulo Shopping Taboão Opened 2Q08
2Q08 PR Curitiba Palladium Shopping Center Opened 3 Stores Opened
3Q08 SP São Paulo Shopping Penha Opened
3Q08 SP São Paulo Shopping Metrô Itaquera Opened 3Q08
3Q08 RJ Rio de Janeiro Shopping Tijuca Opened
4 Stores Opened
3Q08 PR Curitiba Rua XV de Novembro Opened
4Q08 RJ Rio de Janeiro Shopping Grande Rio Confirmed
4Q08
1 Store Confirmed
15
16. Hering Store Network - Indicators
Hering Store Performance 3Q07 3Q08 Var. 9M07 9M08 Var.
Number of Stores 160 209 30.6% 160 209 30.6%
Franchise 146 176 20.5% 146 176 20.5%
Own 14 33 135.7% 14 33 135.7%
Sales (R$ thous.) 59,046 91,792 55.5% 167,879 269,816 60.7%
Same-Store Sales Growth 25.4% 34.4%
Sales Area (m²) 21,669 27,588 27.3% 21,669 27,588 27.3%
Sales (R$ per m²) 2,776 3,395 22.3% 8,006 10,480 30.9%
Check-Outs (thous.) 719,861 1,123,907 56.1% 1,972,850 3,184,937 61.4%
Units 1,743,140 2,654,189 52.3% 4,669,980 7,461,892 59.8%
Average Sales Ticket (R$) 82.02 81.70 -0.4% 85.09 84.70 -0.5%
16
17. Capex (R$ million)
By Activity
10.3
10 0.3 Other
8.0 1.5 IT
8 5.2
2.0
Stores
6
4 4.4
3.3
2 Industry
1.6
0
3Q07 3Q08
Investments to remodel and open owned stores
and update industrial technology
17
18. Indebtedness
Indebtedness Evolution Short Term X Long Term
201.3
184.6
Short Term
46%
Long Term
4.6 54%
3.5
-0.7 -0.1
-1.0
2005 2006 3T07 2007 3T08
-5.3 Total Debt= R$ 132.1 million
-33.4
-42.2
Net Debt/EBITDA*
Net Debt (R$ million)
Adequated cash to support
* Last 12 months EBITDA
growth plan
18
22. Strategy & Outlook
Actions to guarantee the growth strategy
Expansion of Hering Store chain – goal upgraded to 229 stores
The implementation of the new architectural project for the PUC Stores
Campaigns to promote the Hering Store card
Marketing campaign “eu uso Hering desde sempre”
22
23. Investor Relations
Fabio Hering – Vice President and IR Director
Vilmar da Costa – CFO
Karina Koerich – IR Manager
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
Tel: +55 (11) 3897-6857
E-mail: ligia.montagnani@firb.com
