2Q18

2

Results | 4Q18

ImportantDisclaimer

Information contained in this document may include forward-looking

statements and reflect Management’s current view and estimates of

the evolution of the macroeconomic environment, industry conditions,

Company’s performance and financial results. Any statements,

expectations, capabilities, plans and assumptions contained in this

document, which do not describe historical facts, such as information

about declaration of dividend payment, future direction of operations,

implementation of relevant operating and financial strategies,

investment program and factors or trends affecting the financial

condition, liquidity or results of operations, are forward-looking

statements, as set forth in the “U.S. Private Securities Litigation

Reform Act of 1995”, and involve several risks and uncertainties.

There is no guarantee that these results will occur. Forward-looking

statements are based on several factors and expectations, including

economic and market conditions, industry competitiveness and

operational factors. Any changes in such expectations and factors

may cause actual results to differ from current expectations.

3

4Q18 Highlights

Net revenue in 4Q18 reached

R$ 412.2 million, a 13.4% increase against

4Q17.Arezzo&Co recorded a 180bps

increase in ROIC, reaching a level of

29.2%.

EBITDA for 4Q18 totaled R$ 64.1 million

with a net margin of 15.6% and a 17.7%

increase against 4Q17.

Same-Store-Sales growth of 3.6% in

the quarter.

In 4Q18, Net Income totaled R$ 42.2 million

(net margin of 10.2%).

Net Revenue

EBITDA

ROIC

Net Income

SSS

Results | 4Q18

In 4Q18, Gross Profit totaled R$ 194.7

million (gross margin of 47.2%), a 14.8%

increase against 4Q17;

Gross Profit

Arezzo&Co opened 36 stores (net) in

the quarter and ended 4Q18 with 5.5%

in store area growth in the last twelve

months.

Sales Area

4

Company GrowthGROSS REVENUE / DOMESTIC AND FOREIGN MARKET (R$ MILLION)

THE COMPANY REACHED A GROSS

REVENUE OF R$ 505.5 MILLION IN THE

4Q18, A 12.8% GROWTH COMPARED TO

THE 4Q17, WITH HIGHLIGHT TO THE

EXTERNAL MARKET WITH GROWTH OF

28.5%, REPRESENTING 10.4% OF TOTAL

REVENUE.

US OPERATION INCREASED BY 65.5% IN

REAIS IN THE PERIOD AND 40.8% IN

DOLLAR.

Results | 4Q18

407,4 453,1

1.524,4 1.678,9

40,8 52,4

154,5

186,9

448,2 505,5

1.678,9

1.865,8

4Q17 4Q18 2017 2018

Domestic Market Foreign Market

10,1%

21,0%

11,1%

11,2%

28,5%

12,8%

236,6 259,6

873,8 950,7

107,5 107,7

451,4 443,5

50,1 65,4

157,3

219,6

13,2 20,4

41,9

65,2

407,4 453,1

1.524,4

1.678,9

4Q17 4Q18 2017 2018

Arezzo Schutz Anacapri Others

11,2%

5

Gross Revenue by Brand | Domestic MarketGROSS REVENUE BREAKDOWN BY BRAND / DOMESTIC MARKET (R$ MILLION)

IN 4Q18, THE HIGHLIGHT GOES TO

ANACAPRI AND AREZZO BRANDS

WITH 30.5% AND 9.7% GROWTH

RESPECTIVELY.

1. OTHERS: INCREASE OF 54.5% IN 4Q18 (INCLUDES ONLY

DOMESTIC MARKETS FOR ALEXANDRE BIRMAN, FIEVER

AND OWME BRANDS AND OTHER REVENUES).

Results | 4Q18

1

10,1%

55,5%

39,6%

-1,8%

8,8%

30,5%

0,2%

9,7%

11,2%

54,5%

210,3 244,3

748,1 831,4

91,5 87,7

298,7 298,7

67,4 75,7

343,7

384,3

35,9 45,0

129,0

162,6

2,4 0,5

4,9

1,9

407,4 453,1

1.524,4

1.678,9

4Q17 4Q18 2017 2018

Others

Web Commerce

Multibrand

Owned Stores

Franchises

25,4%

16,2%

-4,1%

10,1%

6

Gross Revenue by Channel | Domestic MarketGROSS REVENUE BY CHANNEL / DOMESTIC MARKET (R$ MILLION)

Results | 4Q18

1.2%

2.8%

SSS SELL-IN(FRANCHISES)

SSS SELL-OUT(LOJAS PRÓPRIAS + WEB + FRANQUIAS)

SSS SELL-OUT(OWNED STORES + WEB + FRANCHISES)

9.2%

3.6%

5.0%

3.9%

4.7%

4.2%

12,3%

11,2%

11,1%

0,0%

26,1%

11,8%

16,2%

-4,1%

25,4%

7

Distribution Channel ExpansionOWNED STORES AND FRANCHISES EXPANSION1 NUMBER OF STORES – DOMESTIC MARKET 4Q18

AREZZO&CO’S OPENED 36 NET STORES AND ENDED THE QUARTER WITH 685 STORES, 673 IN

BRAZIL AND 12 ABROAD.

8.0% SALES AREA INCREASE OVER THE LAST 12 MONTHS AND 67 NET OPENED STORES.

1. INCLUDES SEVEN OUTLET TYPE STORES WITH A TOTAL AREA OF 2,223 M² AND STORES OVERSEAS.

Results | 4Q18

FRANCHISES__ 405

OWNED STORES 14

MULTIBRANDS 1,188

FRANCHISES 73

OWNED STORES 17

MULTIMARCAS 1,096

FRANQUIAS 150

OWNED STORES 3

MULTIBRANDS 1,439

OWNED STORES 4

MULTIBRANDS 29

OWNED STORES 5

MULTIBRANDS 413

OWNED STORES 2

MULTIBRANDS 248

2. INCLUDES ALEXANDRE BIRMAN AND SCHUTZ STORES, 3 IN NEW YORK, ONE IN MIAMI AND ONE IN LOS ANGELES.

568 576 584 595 634

50 49 52 54 51

41,2 41,5 42,0 42,6 43,5

-

10,0

20,0

30,0

40,0

50,0

60,0

70,0

-100

100

300

500

700

900

1.100

1.300

1.500

4Q17 1Q18 2Q18 3Q18 4Q18

Franchises Owned Stores Area (000 m2)

+11

+2+3

0,7% 1,3% 1,1% 2,3%

-1

+8+8

-3

+39

2

8

Gross Profit and EBITDAGROSS PROFIT (R$ MILLION) EBITDA (R$ MILLION)

GROSS PROFIT TOTALED R$ 194.7 MILLION IN 4Q18 WITH AN INCREASE OF 14.8% (+ 60BPS IN GROSS MARGIN).

EBITDA GREW BY 17.7% IN 4Q18 TO R$ 64.1 MILLION (EBITDA MARGIN OF 15.6%).

Results | 4Q18

169,6 194,7

623,8

710,7

46,6% 47,2%45,8% 46,6%

0%

20%

40%

-

100,0

200,0

300,0

400,0

500,0

600,0

700,0

800,0

900,0

1.000,0

4Q17 4Q18 2017 2018

Gross Profit Gross Margin

54,5 64,1

206,3 232,2

15,0% 15,6% 15,2% 15,2%

-

3

3

0

,

0

%

-

2

3

0

,

0

%

-

1

3

0

,

0

%

-

3

0

,

0

%

7

0

,

0

%

- 2,0 4,0 6,0 8,0 10,0 12,0 14,0 16,0 18,0 20,0 22,0 24,0 26,0 28,0 30,0 32,0 34,0 36,0 38,0 40,0 42,0 44,0 46,0 48,0 50,0 52,0 54,0 56,0 58,0 60,0 62,0 64,0 66,0 68,0 70,0 72,0 74,0 76,0 78,0 80,0 82,0 84,0 86,0 88,0 90,0 92,0 94,0 96,0 98,0 100,0 102,0 104,0 106,0 108,0 110,0 112,0 114,0 116,0 118,0 120,0 122,0 124,0 126,0 128,0 130,0 132,0 134,0 136,0 138,0 140,0 142,0 144,0 146,0 148,0 150,0 152,0 154,0 156,0 158,0 160,0 162,0 164,0 166,0 168,0 170,0 172,0 174,0 176,0 178,0 180,0 182,0 184,0 186,0 188,0 190,0 192,0 194,0 196,0 198,0 200,0 202,0 204,0 206,0 208,0 210,0 212,0 214,0 216,0 218,0 220,0 222,0 224,0 226,0 228,0 230,0 232,0 234,0 236,0 238,0 240,0 242,0 244,0 246,0 248,0 250,0 252,0 254,0 256,0 258,0 260,0 262,0 264,0 266,0 268,0 270,0 272,0 274,0 276,0 278,0 280,0 282,0 284,0 286,0 288,0 290,0 292,0 294,0 296,0 298,0 300,0 302,0 304,0 306,0 308,0 310,0 312,0 314,0 316,0 318,0 320,0 322,0 324,0 326,0 328,0 330,0 332,0 334,0 336,0 338,0 340,0 342,0 344,0 346,0 348,0 350,0 352,0 354,0 356,0 358,0 360,0 362,0 364,0 366,0 368,0 370,0 372,0 374,0 376,0 378,0 380,0 382,0 384,0 386,0 388,0 390,0 392,0 394,0 396,0 398,0 400,0

4Q17 4Q18 2017 2018

EBITDA EBITDA Margin

12,6%

+60 bps +80 bps

+60 bps +0 bps13,9%

14,8%

17,7%

55,3

42,2

154,5

142,6

15,2%

10,2%

11,4%

9,3%

0,0%

2,0%

4,0%

6,0%

8,0%

10,0%

12,0%

14,0%

16,0%

-

50,0

100,0

150,0

200,0

250,0

300,0

4Q17 4Q18 2017 2018

Net Income Net Margin 9

Net IncomeNET INCOME (R$ MILLION)

THE COMPANY POSTED A NET

MARGIN OF 10.2% IN 4Q18 AND A

NET INCOME OF R$ 42.2 MILLION,

23.7% INCREASE AGAINST 4Q17.

EXCLUDING THE RETROACTIVE

EFFECT, NET INCOME WOULD BE

8.6% HIGHER THAN 4Q17.

Results | 4Q18

-7,7%

-500 bps

-210 bps

-23,7%

15,2%

10,2%

Operating Cash FlowOPERATING CASH FLOW (R$ THOUSAND)

AREZZO&CO GENERATED R$ 33.2 MILLION

CASH FROM OPERATIONS IN THE 4Q18,

LOWER THAN THE AMOUNT PRESENTED IN

4Q17.

IT IS WORTH HIGHLIGHTING THE PAYMENT

OF DIVIDENDS RELATED TO 2Q18, ON

OCTOBER 22ND, IN THE AMOUNT OF R$ 25.0

MILLION.

10

Results | 4Q18

Operating Cash Flow 4Q18 4Q17 2018 2017

Profits before income tax and social contribution47.792 41.786 169.998 182.933

Depreciation and amortization 13.002 10.002 40.882 32.632

Others (10.781) 2.469 (3.177) (3.672)

Decrease (increase) in assets / liabilities (2.104) 7.001 (66.170) 3.346

Trade accounts receivables 2.248 (292) (47.759) (30.859)

Inventories (4.921) 3.729 (39.845) (6.065)

Suppliers (17.424) (4.604) 5.705 37.971

Change in other noncurrent and current assets and liabilities 17.993 8.168 15.729 2.299

Payment of income tax and social contribution (14.750) (17.555) (28.746) (45.466)

Net cash flow generated by operational activities 33.159 43.703 112.787 169.773

11

Investments (CAPEX) and IndebtednessCAPEX (R$ MILLION) INDEBTEDNESS (R$ MILLION)

IN 4Q18, AREZZO&CO INVESTED R$ 12.6 MILLION IN CAPEX, INCLUDING:

• BRAZILIAN OPERATION: (I) INVESTMENTS IN TECHNOLOGY IN ALEXANDRE BIRMAN BRAND FACTORY (II) UPGRADE IN OUR DATACENTER.

• U.S. OPERATION: (I) LAUNCHING OF SCHUTZ STORE IN AVENTURA MALL AND ALEXANDRE BIRMAN STORE IN BAL HARBOUR SHOPS, BOTH IN MIAMI (II) IMPROVEMENTS IN

THE INTERNATIONAL WEB COMMERCE PLATFORM AND (III) SOFTWARE AND IT INVESTMENTS.BRAZIL: (I) INVESTMENTS IN TECHNOLOGY IN ALEXANDRE BIRMAN BRAND

FACTORY (II) UPGRADE IN DATACENTER IBM SYSTEM

Results | 4Q18

2,0 1,4

7,4 10,8 5,2

4,1

11,2

20,3

0,4 7,1

3,0

17,6

7,6

12,6

21,5

48,6

4Q17 4Q18 2017 2018

Stores Corporate Others

125,6%

490,7%

45,4%

81,7%

66,4%

1492,9%

-20,3%

-27,2%

Cash position and Indebtedness 4Q18 3Q18 4Q17

Cash 235.801 283.745 337.920

Total Debt 111.418 172.421 181.745

Short term 43.978 161.180 163.729

% total debt 39,5% 93,5% 90,1%

Long-term 67.440 11.241 18.016

% total debt 60,5% 6,5% 9,9%

Net Debt (124.383) (111.324) (156.175)

12

ROIC (Return on Invested Capital)

RETURN ON INVESTED CAPITAL (ROIC)

PRESENTED GROWTH IN 4Q18, REACHING

29.2%. AMONG THE FACTORS

RESPONSIBLE FOR THIS IMPROVEMENT IS

THE INCREASE OF 12,9% NOPAT AGAINST

4Q17.

IT IS WORTH MENTIONING THAT PART OF THE

INCREASE IS DUE TO AN INJUNCTION OBTAINED

IN 4Q17 EXEMPTING THE COMPANY FROM THE

PAYMENT OF INCOME AND SOCIAL

CONTRIBUTION TAXES (IR AND CSLL - 34%) ON

AS ICMS TAX BENEFIT RETROACTIVE TO 2017,

WHICH REMAINED VALID DURING 2018.

(1) Working Capital: current assets minus cash, cash equivalents and financial investments less current liabilities minus loans and financing and dividends payable.

(2) Less deferred income tax and social contribution.

(3) Average invested capital in the period and same period previous year.

(4) ROIC: NOPAT for the last 12 months divided by average invested capital.

Results | 4Q18

Income from operations 4Q18 4Q17 4Q16 Δ 18 x 17

(%)

EBIT (LTM) 191.280 173.633 151.326 10,2%

+ IR and CS (LTM) (27.354) (28.463) (40.851) (3,9%)

NOPAT 163.926 145.170 110.475 12,9%

Working Capital¹ 412.461 342.283 340.528 20,5%

Permanent assets 153.693 149.754 159.918 2,6%

Other long-term assets² 31.847 33.375 32.596 (4,6%)

Invested capital 598.001 525.412 533.042 13,8%

Average invested capital³ 561.707 529.227 6,1%

ROIC4 29,2% 27,4%

ContactsCFO

RAFAEL SACHETE

IRO

ALINE PENNA

IR COORDINATOR

VICTORIA MACHADO

IR ANALYST

MARCOS BENETTI

+55 11 2132 4300

RI@AREZZOCO.COM.BR

WWW.AREZZOCO.COM.BR