Garnero Group Acquisition Company
Garnero Group Acquisition — SPAC Merger (August 2015)
30 slides from Garnero Group Acquisition's SPAC merger presentation, Aug 28, 2015
Slide 1: Garnero Group Acquisition Company Merger With Grupo Colombo
Garnero Group Acquisition Company(NASDAQ:GGAC) Merger With Grupo Colombo August 2015
Slide 2: Disclaimer
Disclaimer ‘This presentation was filed with the Securities and Exchange Commission on August 27, 2014 as an exhibit to a Form 8-K filed by Garnero Group Acquisition Company (“GGAC’). GGACis holding presentations for certain ofits shareholders, as well as other persons who might be interested in par
Slide 3: Section 1: Transaction Overview
SECTION 1 Transaction Overview COLOMBO © Brasil veste esta
Slide 4: Transaction Summary
Transaction Summary * Grupo Colombo (“GC” or “Colombo” has signed a definitive agreement with Garnero Group Acquisition Company (GGAC’), a NASDAQuisted Special Purpose Acquisition Company with US$144mm cash in trust, whereby GC will merge into GGAC, raise substantial equity capital and become a publ
Slide 5: Transaction Summary (Con't)
Transaction Summary (Con’t) ‘Transaction Structure AQ: SGAC (S144M) Private Placement ($100M) Post-transaction ownershipO© Grupo Colombo® 25% Public Private Placement Investors SPAC Sponsor (1) Assumes no GGAC shareholder redemptions (2) Assumes the closing of a $100mm private placement of additiona
Slide 6: Transaction Valuation
Transaction Valuation es Outstanding’ (a mm) Public Shares SPAC Management Shares Colombo Shares Private Placement Shares Total Shares Outstanding Implied Multiples® (in mm) Implied Multiple: 15.8 4.3 6.0 10.0 36.1 Enterprise Value ne) At Closing Total Shares Outstanding 36.1 Amount in Trust per Sha
Slide 7: Investment Highlights
SECTION 2 Investment Highlights COLOMBO © Brasil veste esta
Slide 8: Investment Highlights
Investment Highlights Be % Multiple growth avenues and clear visibility of new revenue sources =. — Differentiated business model with strong return on invested capital sii Ly Proven organic growth, know-how and management track-record Largest Brazilian retailer with focus on menswear in the most re
Slide 9: Largest Brazilian Retailer with Focus on Menswear
Largest Brazilian Retailer with Focus on Menswear Great positioning in the Brazilian apparel market, with a national footprint focused on the B and C classes Colombo Sey I 7 { H { H ! } { ' ' ' » i i 4 H ' Ea ' g H & q i 2 q 1 a Brooksfield %\ t 1 a 1 E @ Re... | b D NA t H S ' ' 6 ' 1 { ' Saas ew “
Slide 10: Colombo is Poised to Capture Multiple Growth Opportunities
Colombo is Poised to Capture Multiple Growth Opportunities Solid Platform Multichannel platform with nationwide geographic footprint Robust Commercial Structure Strong brand positioning and well established busin Differentiated Infrastructure Reliable and efficient inventory system, providing an uni
Slide 11: Company Overview
SECTION 3 Company Overview COLOMBO © Brasil veste esta
Slide 12: Grupo Colombo at a Glance
Grupo Colombo at a Glance Grupo Colombo is the leading menswear apparel retailer in Brazil, focused on classes Band C * Leadership within the Brazilian menswear apparel retail segment * Largest seller of men's shirts (6mm/yeat) and suits (600,000/year) in Brazil Leadership * Presence in all Brazilia
Slide 13: Largest Brazilian Retailer with Focus on Menswear
Largest Brazilian Retailer with Focus on Menswear Number of Stores Listed Apparel Retailers’ Private Companies? 303 274 | Source: Colombo, companies websites and investor relations (for ised companies) (1) Only owned stones were considezed. Loas Renner total sores do aot consider Camicado stores 2 C
Slide 14: Comprehensive National Store Footprint
Comprehensive National Store Footprint High growth capacity particularly in the Northeast, in a unique environment marked by: (i) strong demand and higher sales per sqm, (ii) reduced competition and compressed personal expenses and (iii) lower required investments per store Revenues Breakdown by Reg
Slide 15: Complete Product Portfolio
Complete Product Portfolio Grupo Colombo has a simplified business model and a basic portfolio of products Business Model Fundamentals Sales by Category (Thousands of Units) See & Basic products, low exposure to 2011 2014 Growth 11214 fashion trends and easier purchase procedure SEE ae cS 0 & Focus
Slide 16: Colombo Comparable Advantages
Colombo Comparable Advantages EBITDA Margin (2014) Sales/ Square Meter (2014) Oo, 0% 3 25% a 20% 18% 10% % o% @ WON Eig RESTOQUE BEAT Bm, orontene AREZZO @ werner EBivin ESTOQUE BurHNs FETE] AA orentene AREZZO EBITDA Growth (2014 — 6/31/15 LIM)®@ ROIC (2014) 19% Average Growth: -7% 10% % ding RESTOQ
Slide 17: Proven Growth Track Record
Proven Growth Track Record Company has shown ability to consistently deliver growth and margin wy Number of Stores (2 COLOMBO GCG GRUPO COLOMBO 2013 Partnership with a local private equity firm 4200 2004 More than 40 stores 1990 Second Store in 209 1917 é WY Foundation of the ibiragters Shopping = 1
Slide 18: Significant Store Opening Potential
Significant Store Opening Potential ‘The group has conducted a market study with "IBOPE Intcligéncia” which appointed potential to reach a markct share among the B/C social classes of 5.9% Room to expand its current operations throughout Brazil, focused on the regions with the widest gap between cur
Slide 19: New Product Segments
New Product Segments Colombo Wom: IBOPE’s study also indicated a potential market for women's stores in every city where the Company already has operations Woman-focused stores expands Colombo’s total stores poteatial to carly 2,000 throughout Brazil 8.0% 6.5% 408 97% ‘Traditional portfolio 1.0% 1.5
Slide 20: New Sales Channels
New Sales Channels E-Commerce ao} S a 7) v a S i) ) 2 S = S) Qa a ° Oo zy I Ss g — a BS} = & Visitors in 2014 Conversion rate 9.4mm 1.5% vs. market average only 1.0% Sales channels under implementation In 2014, Company has intensified its efforts to sell packs of products to multibrand stores and ma
Slide 21: Business Model with Strong Return on Invested Capital
Business Model with Strong Return on Invested Capital... New stores should expand the Company’s margin and working capital discipline should boost its return on invested capital A Standarel Grupo Colombo’s Store New Store Opening Process ee + Potential market mapping and competitive positioning (mar
Slide 22: Continuous Improvement in Operations to Increase Cash Flow
Continuous Improvement in Operations to Increase Cash Flow Working Capital Strategy Inventory Balance in Days of COGS (2014YE) ———___—______, 497 59 = Grupo Colombo has recently implemented systems to control its inventories, enabling the Company to optimize its working, capital cycle Curent AREZZO
Slide 23: Continuous Improvement in Operations to Increase Cash Flow (Con't)
Continuous Improvement in Operations to Increase Cash Flow (Con’t) Reduction in Occupancy Costs! Occupancy Costs Evolution (as % of Gross Revenues) Potential to increase the profitability of the company through savings Occupancy costs renegotiated WW as a% of store sales = costs reduced to 11.1 4) 1
Slide 24: Strong Business Model in Conservative Market Scenario
Strong Business Model in Conservative Market Scenario Colombo’s business model demonstrated resilience with the capacity to absorb new customers that have been attracted by its offered package of benefits Fast-Growing A, B and C Income Class (millions of people)" Large Addressable Market (R$ bri) —
Slide 25: Simplified and Highly Flexible Business Model
Simplified and Highly Flexible Business Model Colombo has a unique value proposition for investors in the Brazilian market Bargaining Power and Reduced Incremental Lean Assortment Investments _ Focus on a small variety of products categories, ae _ Colombo has a advantages of scale, increasing its si
Slide 26: Financial Services Opportunities
Financial Services Opportunities Co-Brand Cards Launched in 2012 @ 750,000 cards Issued projected for the end of 2015 Main credit card issuer of HSBC Brazil Moreover, co-branded cards boosts bricks and mortar sales — for the first semester of 2015, 12% of Colombo’s B&M revenues came from its co-bran
Slide 27: Solid Governance Standards Backed by Strong Management
Solid Governance Standards Backed by Strong Management Executive team Alvaro Jabur Junior CEO in Colombo since 1986 Paulo Jabur Executive Vice President in Colombo since 1988 Denis Piovezan CFO In Colombo since 2013 O Alvaro started his career asa salesman and worked continuously until assuming the
Slide 28: Financial Highlights
SECTION 4 Financial Highlights COLOMBO © Brasil veste esta
Slide 29: Operational and Financial Highlights
Operational and Financial Highlights Track record of growth Number of Stores (#)® ‘Total sales arca and average store size (sqm) CAGR yy 45:3 16.9% CAGR yy 450: 13.2% peso siatea See Ag Sor siz 434 99 394 94 93 351 , 22 272 : 36.384 33.136 26.924 2011 20124 2013 20144 2011A 2012A 2013A 20144, Net re
Slide 30: Operational and Financial Highlights (Cont'd)
Operational and Financial Highlights (Cont'd) Track record of growth EBITDA and EBITDA margin (R&mm, %) Net debt and Net debt/EBITDA (R$mm, x) —— ee 25% mmm EBITDA Margin mmm Net debt —@=Net debt/ EBITDA 24% 6.1X - 5.6X 571.3 516.2 492.1 2011A 20124 2013A 2014 20114 20124 20134 20144 Capex and Capex
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