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2Q17 & 1H17

Results

Conference Call

July 28, 2017

9:30 a.m. (Eastern Time)

10:30 a.m. (Brasilia Time)

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This presentation contains statements that can represent expectations

about future events or results. These statements are based on certain

suppositions and analyses made by the company in accordance with its

experience, with the economic environment and market conditions, and

expected future developments, many of which are beyond the company’s

control. Important factors could lead to significant differences between

real results and the statements on expectations about future events or

results, including the company’s business strategy, Brazilian and

international economic conditions, technology, financial strategy,

developments in the footwear industry, conditions of the financial market,

and uncertainty on the company’s future results from operations, plans,

objectives, expectations and intentions – among other factors. In view of

these aspects, the company’s results could differ significantly from those

indicated or implicit in any statements of expectations about future

events or results.

Disclaimer

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Analysis of 2Q17

Results in IFRS

Consolidated data

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Receita bruta

Consolidada

Domestic market: R$ 414.2 million 4.9%

Exports: R$ 121.8 million 16.6%

Lucro líquido

Consolidado R$ 92.0 million (1.1%)

EBIT R$ 57.2 million 4.7%

Margin 13.0% (0.4 p.p.)

Câmbio Negative impact: R$ 11.2 million

Volume Domestic market: 24.2 million of pairs (8.0%)

Exports: 9.2 million of pairs 25.1%

Preço médio

Domestic market R$ 17.16 14.0%

Exports R$ 13.20 (6.8%)

US$ 4.11 1.7%

Highlights 2Q17 (YOY 2016)

Exchange

Average price

Net profit

EBIT

Volumes

Gross revenue

3

5

499.2

547.2 536.0 (30.6)

50.1 26.2 2.3 (11.2)

0

100

200

300

400

500

600

Gross revenue -

2Q16

Volume effect -

domestic market

Mix/Average price effect -

domestic market

Volume effect - exports

Mix/Average price effect -

exports

Gross revenue

without FX effect

FX effect - exports

Gross revenue -

2Q17

R$ m

illi

on

Average US dollar: 2Q16 = R$ 3.5099 / 2Q17 = R$ 3.2137 - ∆ (8.4%)

Gross sales revenue

– Domestic market and exports

Analysed by effect of volume, mix and average price

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R$ mn 2Q08 2Q09 2Q10 2Q11 2Q12 2Q13 2Q14* 2Q15* 2Q16 2Q17 CAGR

Gross revenue 286.9 371.7 391.0 307.2 412.6 504.7 488.7 462.0 499.2 536.0 7.2%

Change Y-o-Y 29.6% 5.2% (21.4%) 34.3% 22.3% (3.2%) (5.5%) 8.1% 7.4%

Net profit 42.4 57.3 38.0 36.9 59.5 66.2 73.7 88.7 93.0 92.0 9.0%

Change Y-o-Y 35.2% (33.7%) (3.1%) 61.4% 11.2% 11.4% 20.2% 4.9% (1.1%)

R$ million 2Q08 2Q09 2Q10 2Q11 2Q12 2Q13 2Q14* 2Q15* 2Q16 2Q17 CAGR

Advertising

expenses 19.8 19.8 19.9 20.0 28.5 26.7 26.2 21.3 25.1 25.9 3.0%

% of Net

Revenue 9.1% 6.7% 6.5% 8.2% 8.6% 6.6% 6.6% 5.6% 6.2% 5.9%

Performance

– CAGR, Compound average growth rate: * excluding the non-recurring effect – A3NP

4

7

407.0 440.1

19.4 23.4 (8.1) (2.0) (3.3) (0.3)

0

50

100

150

200

250

300

350

400

450

500

Net sales revenue -

2Q16

Increase in gross

revenue from domestic market

Increase in gross

revenue from exports

Exports tax benefit

Reintegra Increase in sales returns and taxes on

sales

Increase in discounts granted to

clients

Net sales revenue -

2Q17

R$ m

illi

on

24.2% 4.4%

Net sales revenue

4.9%

(103.0%)

Increase in exports revenues = R$ 17.3 mn / 16.6%

2,419.0% 1.8%

Increase in deductions from sales = (R$ 3.6 mn) / 3.9%

8

185.1 197.9

33.1 (1.0) (10.4) (10.9)

0

50

100

150

200

250

Gross profit - 2Q16

Increase in net sales revenue

Decrease raw materials

Increase personnel costs

Increase other costs

Gross profit - 2Q17

R$ m

illi

on

Increase COGS = (R$ 20.3 mn) / 9.1%

(1.1%)

35.2%

Gross profit

8.1%

11.6%

5

9

54.6 56.1 57.2 57.2 1.5

12.9 (0.8) (6.4)

(4.6)

0.0

0

10

20

30

40

50

60

70

80

Ebit - 2Q16 Non recurring effect - 2Q16

Recurring Ebit - 2Q16

Increase gross profit

Advertising and

publicity

Operating expenses - recurrent

Other operating income / expenses

Recurring Ebit - 2Q17

Non recurring effect - 2Q17

Ebit - 2Q17

R$

mill

ion

(R$ 7.2 mm) / 5.4%

3.2% 5.9%

Increase operating expenses = (R$ 11.8 mm) / 9.1%

EBIT

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(R$ ‘000) 2Q16 2Q17 Change, % Change, R$

Interest received from clients 528 670 26.9% 142

Revenue from cash investments 53,249 44,327 (16.8%) (8,922)

Other financial revenues 101 753 645.5% 652

Subtotal 53,878 45,750 (15.1%) (8,128)

Costs of financings (4,157) (2,290) (44.9%) 1,867

Cofins and PIS taxes on Financial revenues (3,095) (2,290) (26.0%) 805

Other financial expenses (1,387) (963) (30.6%) 424

Subtotal (8,639) (5,543) (35.8%) 3,096

Net financial revenues (expenses) (1) 45,239 40,207 (11.1%) (5,032)

Revenue from FX derivatives – BM&FBovespa 6,722 1,472 (78.1%) (5,250)

Foreign exchange gains 20,973 10,350 (50.7%) (10,623)

Subtotal 27,695 11,822 (57.3%) (15,873)

Op, expenses on FX derivatives – BM&FBovespa (1,833) (3,194) 74.2% (1,361)

Expenses of FX variation (27,090) (5,707) (78.9%) 21,383

Subtotal (28,923) (8,901) (69.2%) 20,022

Net gain (loss) on FX variations (2) (1,228) 2,921 (337.9%) 4,149

Adjustments to present value (APV) 13,291 16,186 21.8% 2,895

Financial result – APV (3) 13,291 16,186 21.8% 2,895

Net financial revenues (expenses) (1) + (2) + (3) 57,302 59,314 3.5% 2,012

Net financial revenues (expenses)

6

11

93.0 92.0 2.6 2.0 (4.2)

(1.4)

0

20

40

60

80

100

120

Net profit - 2Q16 Increase EBIT Net financial result

Taxes Minority interests

Net profit - 2Q17

R$

mill

ion

3.5%

Net profit

4.7% 20.9%

Decrease net profit = (R$ 1.0 mn)

Analysis of 1H17 Results in IFRS

Consolidated data

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Receita bruta

Consolidada

Domestic market: R$ 884.9 million 14.1%

Exports: R$ 272.0 million (6.3%)

Lucro líquido

Consolidado R$ 263.7 million 11.5%

EBIT R$ 166.9 million 21.9%

Margin 17.6% 2.1 p.p.

Câmbio Negative impact: R$ 45.5 million

Volume Domestic market: 51.0 million of pairs 2.0%

Exports: 20.2 million of pairs 9.2%

Preço médio

Domestic market R$ 17.36 11.9%

Exports R$ 13.44 (14.2%)

US$ 4.23 0.2%

Highlights 1H17 (YOY 2016)

Exchange

Average price

Net profit

EBIT

Volumes

Gross revenue

14

1,065.8

1,202.4 1,156.9

16.4

92.9 26.7 0.6 (45.5)

0

200

400

600

800

1.000

1.200

1.400

Gross revenue -

1H16

Volume effect -

domestic market

Mix/Average price effect -

domestic market

Volume effect - exports

Mix/Average price effect -

exports

Gross revenue

without FX effect

FX effect - exports

Gross revenue -

1H17

R$ m

illi

on

Average US dollar: 1H16 = R$ 3,7099 / 1H17 = R$ 3.1783 - ∆ (14.3%)

Gross sales revenue

– Domestic market and exports

Analysed by effect of volume, mix and average price

8

15

R$ mn 1H08 1H09 1H10 1H11 1H12 1H13 1H14* 1H15* 1H16 1H17 CAGR

Gross revenue 618.2 743.2 847.6 699.3 908.1 1,108.3 1,104.1 1,099.9 1,065.8 1,156.9 7.2%

Change Y-o-Y 20.2% 14.1% (17.5%) 29.8% 22.0% (0.4%) (0.4%) (3.1%) 8.5%

Net profit 83.4 121.6 84.9 100.4 141.5 168.5 171.2 226.4 236.6 263.7 13.7%

Change Y-o-Y 45.8% (30.1%) 18.2% 41.0% 19.1% 1.6% 32.3% 4.5% 11.5%

R$ million 1H08 1H09 1H10 1H11 1H12 1H13 1H14* 1H15* 1H16 1H17 CAGR

Advertising

expenses 37.2 38.5 38.3 38.7 58.4 59.5 52.5 45.2 47.5 47.0 2.6%

% of Net

Revenue 7.7% 6.4% 5.6% 6.9% 8.0% 6.7% 5.9% 5.0% 5.4% 4.9%

Performance

– CAGR, Compound average growth rate: * excluding the non-recurring effect – A3NP

16

882.7 950.3 109.3 (11.4) (11.2) 4.4 (18.6) (4.9)

0

200

400

600

800

1.000

1.200

Net sales revenue -

1H16

Increase in gross

revenue from

domestic market

Decrease in gross

revenue from exports

Exports tax benefit

Reintegra Increase in sales returns and taxes on

sales

Increase in discounts granted to

clients

Net sales revenue -

1H17

R$ m

illi

on

(4.3%) 12.8%

Net sales revenue

14.1% (49.4%)

Decrease in exports revenues = (R$ 18.2 mn) / (6.3%)

1,880.7% 13.0%

Increase in deductions from sales = (R$ 23.5 mn) / 12.9%

9

17

407.6

445.0 67.5 (8.5) (7.0) (14.6)

0

50

100

150

200

250

300

350

400

450

500

Gross profit - 1H16

Increase in net sales revenue

Increase raw materials

Increase personnel costs

Increase other costs

Gross profit - 1H17

R$

mil

lio

n

Increase COGS = (R$ 30.1 mn) / 6.4%

4.1% 21.5%

Gross profit

7.6%

3.5%

18

136.9 145.7

174.7 166.9

8.8

37.3 0.5 (6.2) (2.6) (7.8)

0

20

40

60

80

100

120

140

160

180

200

Ebit - 1H16 Non recurring effect - 1H16

Recurring Ebit - 1H16

Increase gross profit

Advertising and

publicity

Operating expenses - recurrent

Other operating income / expenses

Recurring Ebit - 1H17

Non recurring effect - 1H17

Ebit - 1H17

R$

mill

ion

(R$ 5.7 mm) / 2.2%

(1.1%) 2.9%

Decrease operating expenses = (R$ 8.3 mm) / 3.2% EBIT

10

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(R$ ‘000) 1H16 1H17 Change, % Change, R$

Interest received from clients 1,165 1,113 (4.5%) (52)

Revenue from cash investments 106,182 96,800 (8.8%) (9,382)

Other financial revenues 1,987 1,779 (10.5%) (208)

Subtotal 109,334 99,692 (8.8%) (9,642)

Costs of financings (8,950) (5,143) (42.5%) 3,807

Cofins and PIS taxes on Financial revenues (6,667) (4,814) (27.8%) 1,853

Other financial expenses (3,258) (1,928) (40.8%) 1,330

Subtotal (18,875) (11,885) (37.0%) 6,990

Net financial revenues (expenses) (1) 90,459 87,807 (2.9%) (2,652)

Revenue from FX derivatives – BM&FBovespa 30,965 16,782 (45.8%) (14,183)

Foreign exchange gains 52,141 18,769 (64.0%) (33,372)

Subtotal 83,106 35,551 (57.2%) (47,555)

Op. expenses on FX derivatives – BM&FBovespa (5,690) (6,848) 20.4% (1,158)

Expenses of FX variation (64,247) (16,443) (74.4%) 47,804

Subtotal (69,937) (23,291) (66.7%) 46,646

Net gain (loss) on FX variations (2) 13,169 12,260 (6.9%) (909)

Adjustments to present value (APV) 28,029 36,427 30.0% 8,398

Financial result – APV (3) 28,029 36,427 30.0% 8,398

Net financial revenues (expenses) (1) + (2) + (3) 131,657 136,494 3.7% 4,837

Net financial revenues (expenses)

20

236.6

263.7 29.9 4.8 (3.3) (4.3)

0

50

100

150

200

250

300

Net profit - 1H16 Increase EBIT Net financial result Taxes Minority interests Net profit - 1H17

R$

mill

ion

Net profit

Increase net profit = R$ 27.1 mn

3.7%

21.9%

9.2%

11

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Basis for the distribution of dividends R$

Net profit for the period 263,749,178.45

( - ) Tax incentives reserve (100,946,805.48)

Legal reserve calculation basis 162,802,372.97

( - ) Legal reserve (8,140,118.64)

Dividend for the profit reported up to June 30, 2017 154,662,254,33

Total of Dividends + Interest on Equity proposed by management (1) 154,662,254.33

Minimum obligatory dividend payable (25%) 38,665,563.58

Dividend proposed in excess of the obligatory minimum dividend 115,996,690.75

Sum 154,662,254.33

Earnings

1 Dividends will be paid “ad referendum” the OGM that considers the balance sheet and financial statements for 2017.

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Allocation of the proposed corporate actions payments (I.E. and dividend) R$

( + ) 1st Interest on Equity (I.E.), gross 30.000.000,00 1

( + ) 1st interim dividend 69.078.060,63 1

( + ) 2nd interim dividend 55,584,193.70 1

Total of dividends + Interest on Equity proposed by management, gross 154,662,254.33 1

( - ) Income tax withheld at source on Interest on Equity – (15%) (4.500.000,00)

Total of dividends + Interest on Equity proposed by management, net 150,162,254.33 1

1 Dividends will be paid “ad referendum” the OGM that considers the balance sheet and financial statements for 2017.

Dividend

Dividends proposed1

Type Date

approved Ex- date

Date of start

payment

Gross amount

R$

Gross amount

per share R$ Net amount R$

Net amount per

share R$

Dividend 04/27/17 05/03/17 05/17/17 69,078,060.63 0.229714663 69,078,060.63 0.229714663

I.E. 04/27/17 05/03/17 05/17/17 30,000,000.00 0.099763077 25,500,000.00 0.084798615

Dividend 07/27/17 08/04/17 08/16/17 55,584,193.70 0.184841673 55,584,193.70 0.184841673

Sum 154,662,254.33 0.514319413 150,162,254.33 0.499354951

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Thank You!