1Q15 Results Conference Call

May 08th, 2015 – 9 a.m. (BrT)

DISCLAIMER

This presentation contains forward-looking statements regarding the prospects of the

business, estimates for operating and financial results, and those regarding Cia. Hering'sgrowth 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’sfiled disclosure documents and are,

therefore, subject to change without prior notice.

1Q15

Outlook

Q&A

AGENDA

1Q15 Results

4

GROSS REVENUES AND BREAKDOWN BY BRAND R$ MILLION – DOMESTIC MARKET

Gross revenues of R$ 405.8 million, influenced by both franchises and multibrand retraction

given environment deterioration and higher risk aversion.

GROSS REVENUES BREAKDOWN PER CHANNEL DOMESTIC MARKET EX-‘OTHER REVENUES’ 1Q15, R$ MILLION - CHANGE 1Q15 x 1Q14

Others

1Q15 1Q14 Change

405.8 458.7 -11.5%

302.6 342.7 -11.7%

44.9 51.9 -13.5%

32.3 34.5 -6.3%

20.9 21.9 -4.6%

5.2 7.8 -33.5%

1Q15 Results

5

HERING STORE NETWORK GROSS SALES ‘SELL-OUT’, R$ MILLION

Gross revenues of R$ 295.6 million (+3.9%), as a

result of 47 stores’ net addition, which

compensated SSS decline.

¹ Stores opened in the last twelve months net from closings.

SSS: -1.9% SSS of own stores: +4.5% More efficient supply management favors better sales performance in own stores and franchises that promoted adjustments.

1Q15 Results

6

GROSS PROFIT R$ MILLION AND GROSS MARGIN

EBITDA R$ MILLION AND EBITDA MARGIN

EBITDA reached R$ 47.1 million, down 50.1%

mainly due to sales and margin gross decrease, generating operational deleveraging.

Gross margin contraction of 740 bp due to higher

promotional activity, especially related to past

collections (‘saldos‘), and sales retraction, insufficient

to dilute fixed costs.

1Q15 Results

7

NET INCOME R$ MILLION AND NET MARGIN

CAPEX R$ MILLION

Investments concentrated on IT, with SAP

implementation planned for mid-year and production and logistics especially in plants

located in the state of Goiás.

Net income of R$ 41.5 million (-35.7%), mainly

explained by a decrease in operating income, partially offset by higher net financial income and

lower effective income tax rate compared to 1Q14.

1Q15 Results

8

CASH FLOWS R$ MILLION

Cash flow of R$ 62.5 million in 1Q15, R$ 35 million higher 1Q14

Negative EBITDA generation offset lower Income Tax and Social Contribution and improved working capital, especially in reducing accounts receivable.

Cash Flow - Consolidated 1Q15 1Q14 Chg.

EBITDA 47,141 94 ,497 (47 ,356)

No cash items 12,047 6,209 5,838

Current Income tax and Social Contribution (7,638) (28,818) 21,180

Working Capital Capex 24,917 (32 ,835) 57 ,752

Decrease in trade accounts receivable 117,014 38,665 78,349

(Increase) in inventories (41,342) (24,026) (17,316)

(Decrease) in accounts payable to suppliers (22,955) (16,230) (6,725)

(Decrease) in taxes payable (17,352) (30,185) 12,833

Others (10,448) (1,059) (9,389)

CapEx (13,959) (11 ,556) (2 ,403)

Free Cash Flow 62,508 27 ,497 35 ,011

Reconc i l iation from accounting Cash f low to adjusted Cash f low (R$ thousand) 1Q15 1Q14 Chg.

DFC - Cash provided by operating activ ities 88 ,638 45 ,781 42 ,857

Adjustment – Financ ial items al located to operating cash (12 ,171) (6 ,728) (5 ,443)

Unrealized exchange and monetary variation (419) (437) 18

Financial Result (12,330) (6,733) (5,597)

Interest paid on loans 578 442 136

DFC - Cash f lows from investing activ ities (13,959) (11 ,556) (2 ,403)

Free Cash Flow 62,508 27 ,497 35 ,011

* The adjusted cash flow as presented above is not a Brazilian Generally Accepted Accounting Practice and IFRS financial performance

measurement. The information on this table was calculated for the management of the Company and has not been audited by

independent auditors

1Q15 Results

9

Dividends payout R$ MILLION

Buyback Program IN THOUSAND OF SHARES

24% of the plan was executed until now (1.2 million shares)

Buyback Program will timely continue to run

and is an alternative source of value creation to shareholders.

Payout of 46% in 2014. R$ 50 million

in dividends¹ to be paid in May, 27th

¹ Corresponding to R$ 0.30596728 per share, based on the shareholders’ position dated April 29th, 2015, approved at the General Shareholders Meeting.

1Q15 Results

Outlook

Q&A

AGENDA

1Q15 Results

11

Priority for actions that combine sales growth and margin recovery…

Sales Growth - Focus on improving assortment and stores supply

:: Assortment – Move on with initiatives implemented throughout 2014 looking to further improvement in product offering

:: Supply - review of Supply strategy to the stores and relationship with channels in order to increase control over sell-out and stores’ efficiency

Margin recovery

:: Pricing Strategy - Prices revision and products features -> to be applied to 2H15 collections on

:: Reduction of Leftovers Inventories - manufacturing calendar normalization and inventories reduction after SAP go-live (Jul, 2015) -> lower past colections sales (“saldos”)

:: Reduction of Imported Mix

Expenses Reduction

1Q15 Results

12

Hering for you Development Model and assortment maturity Store network extension for subsequent creation of franchises’ network

Webstores Boost sales through the new platform Multichannel strategy

…without losing focus on building new growth fronts

DZARM. New Business Plan Relaunch plan implementation Distribution channels expansion and store opening in the coming quarters

AGENDA

1Q15

Outlook

Q&A

INVESTOR RELATIONS TEAM

Fabio Hering – CEO Frederico Oldani – CFO and IRO

Bruno Salem Brasil – IR Manager Caroline Luccarini – IR Analyst

www.ciahering.com.br/ir +55 (11) 3371 -4867/4805

ri@hering.com.br