3Q21 Press Release

November 11, 2021

B3: LREN3; USOTC: LRENY

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November 12, 2021 1 pm (BR) / 11 am (US-EST)

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Highlights of the period

Increase of 43.5% and 22.7%	Growth in Digital Sales (GMV)
in net revenue from
despite a record
merchandise sales versus
comparative base and
3Q20 and 3Q19, respectively,
advancing even more in
and the tendency continues
October, with +30% increase
in the coming months
			Record enchantment for a
45% of deliveries in D+2 at
third quarter, with the best
Renner and 70% at
level of very satisfieds
Youcom

Delinquency at the lowest

Renner's marketplace labhistorical levels reached the target of +100

sellers for the year and

doubled the digital

assortment in the quarter

	16.3 MM active customers
	in the ecosystem an
Conclusion of the Repassa	increase of 23.9% versus
previous year with
acquisition
retention of +4 p.p.

Markdowns reaching

its lowest levels

Acceleration in content production: broadcasting of 12 lives in the quarter and an increase of 25% in activations of influencers

compared with 2Q21

Greater coverage of

Realize in the ecosystem

with expansion of the customer base (+7% vs 2Q21) and record TPV

Continuing increase in the participation of omni customers, with +47% versus 3Q20

Total adjusted EBITDA

826.4% greater than

3Q20

Consistent gain of market share

Renner was the most sought- after brand on the web and continued leader in MAU among national players

Cross-brandcustomers in the ecosystem spend 6 to 7x more than those who buy in just one

Consolidated Information (R$ MM)	3Q21	3Q20	Var.	3Q19	Var.
21 x 20	21 x 19
Net Revenue from Merchandise Sales	2,369.6	1,651.2	43.5%	1,931.9	22.7%
Growth in Same Store Sales	39.5%	-17.2%	-	8.3%	-
Digital Sales (GMV)	377.4	348.9	8.2%	115.8	226.0%
Digital Sales Penetration	12.2%	16.1%	-	4.6%	-
Gross Profit from Merchandise Sales	1,264.2	788.2	60.4%	1,049.9	20.4%
Gross Margin from Retailing Operation	53.3%	47.7%	5.6p.p.	54.3%	-1.0p.p.
Operating Expenses (SG&A)¹	(866.4)	(653.9)	32.5%	(677.4)	27.9%
SG&A as a % of Net Revenue from Merchandise Sales	36.6%	39.6%	-3.0p.p.	35.1%	1.5p.p.
Ajusted EBITDA from Retailing Operation	203.7	12.9	1477.8%	251.5	-19.1%
Ajusted EBITDA Margin from Retailing Operation	8.6%	0.8%	7.8p.p.	13.0%	-4.4p.p.
Financial Products Result	74.2	(51.2)	245.0%	103.2	-28.2%
Ajusted Total EBITDA (Retail + Financial Products) - Includes Leasing²	277.8	(38.2)	825.1%	354.8	-21.7%
Ajusted Total EBITDA Margin - Includes Leasing²	11.7%	-2.3%	14.0p.p.	18.4%	-6.6p.p.
Ajusted Total EBITDA (Retail + Financial Products) - Excludes Leasing³	438.5	87.3	402.0%	464.4	-5.6%
Ajusted Total EBITDA Margin - Excludes Leasing³	18.5%	5.3%	13.2p.p.	24.0%	-5.5p.p.
Net Result	172.0	(82.9)	307.5%	186.7	-7.9%
Net Margin	7.3%	-5.0%	12.3p.p.	9.7%	-2.4p.p.
ROIC LTM	6.8%	19.9%	-13.1p.p.	21.0%	-14.2p.p.

9M21 9M20 Var.

5,990.9 3,741.0 60.1%

56.6% -35.8% -

1,110.7 710.5 56.3%

14.2% 14.6% -

3,215.1 1,888.9 70.2%

53.7%

50.5%

3.2p.p.

(2,453.5) (1,740.7) 40.9%

41.0%

46.5%

-5.5p.p.

310.8 551.5 -43.6%

5.2%	14.7%	-9.5p.p.
195.0	22.3	774.0%

505.7 573.8 -11.8%

8.4%	15.3%	-6.9p.p.
948.5	924.1	2.6%
15.8%	24.7%	-8.9p.p.

217.3 742.3 -70.7%

3.6%	19.8%	-16.2p.p.
6.8%	19.9%	-13.1p.p.

1 To facilitate analysis. Depreciation and Amortization expenses including Lease Depreciation have been excluded from the above table.

• Total Adjusted EBITDA with the impact of Depreciation and Lease Financial Expenses. For the purposes of comparability with preceding periods, the Company is now reporting EBITDA also adjusted for Depreciation and Financial Expenses of Leasing relative to the adoption of IFRS 16, given the similarity with cash flows in the rental agreements.
  ³ Total Adjusted EBITDA without the impact of Depreciation and Financial Expenses with respect to the adoption of IFRS 16.
  Note.1: In May 2020, the Company was successful in a lawsuit relating to the exclusion of ICMS from the PIS/COFINS tax calculation base. Thus, in 9M20, a tax credit of R$ 784.6 MM (R$ 735.4 MM net of legal fees) was booked to Other Operating Results, relating to principal amount as well as R$ 578.4 MM (R$ 553.3 million net of tax), relating to interest on this amount and booked to the Financial Result. The total amount was R$ 1,363.0 MM, with a net effect of R$ 1,047.9 MM on the 9M20 Profit.
  Note.2: Exceptionally, to facilitate analysis, a column and comparison with 2019 figures has been included for this quarter.

Results 3Q21

2

Message from the Management

Since the reopening of the stores in mid-April and with a gradual recovery in mobility, we have seen important consistency in sales performance. In the third quarter, net revenue from merchandise sales recorded robust growth not only in relation to 2020 of 43.5% but also versus 2019 at 22.7%. And with even more enchantment! We reported a record third quarter of Very Satisfied customers, a clear indication that we are on the right track in offering an increasingly powerful value proposition to our customers.

In addition to greater mobility, the lifting of restrictions on commercial operations as well as the ready acceptance of the spring- summer collection also contributed to a significant gain in market share in the period. Further, sales performance combined with optimization of the integrated inventory as well as the use of data in our processes, has contributed to the lowest markdowns levels in the Company's history. Such improvements in productivity partially compensated for the challenges of exchange rate and raw material and freight charge inflation, driving up gross margins once again at levels above expectations for the period.

As to digital sales, notwithstanding the stronger offline operation, GMV for the quarter was higher than 3Q20, when growth had peaked to more than 200%. During the period, Renner was the most searched brand among national fashion players as well as maintaining its absolute leadership in Monthly Active Users (MAU) on the same comparative basis.

Still in the same quarter, we had the effects of the cyber-attack in August producing some systemic instability as well as downtime in our digital operations over a few days. In these circumstances, our teams and partners worked very diligently, indicating the importance of always having our teams prepared as well as updated business protection and recovery plans at the ready.

Besides resumption in our short-term operations, we continue investing heavily in assuring our future. In this context, progress was made in developing our fashion and lifestyle ecosystem, making us the choice of still more customers. Currently, we have an active customer base of 16.3 million that transit across the different brands under which we actively trade: the more integrated our customers are into our businesses, the greater the spending generated by them. Similarly, we know that the more there is integration between the different channels that we operate, the better the consumer shopping experience, allowing us to leverage our operations. And it is with this in mind, we continue evolving in the capture of more opportunities and customers, increasingly generating more recurrence, stickiness and lifetime value.

In the omnichannel journey, with the completion of the stage of making physical instore inventory available for online purchases, which significantly increased the assortment, we turned to focusing efforts on the improvement in the level of service, addressing this issue by increasing productivity in last mile delivery. Here, we saw significant developments at Renner, with 45% of all deliveries in up to D+2, while at Youcom, this indicator has already reached 70%. Still on the supply chain theme, we concluded civil work on our new omni DC, moving onto the subsequent stage of equipment assembly and automation. At the bricks-and-mortar stores, we increased the relevance of alternative checkout modalities, these accounting for as much as 45% of sales at some stores. In this context, Pague Digital, the instore checkout function conducted by the customer using his own cell phone, continued to be a highlight in terms of relevance and in the attractiveness of the app. As a result, omni-customer base continued growing quarter-on- quarter, thereby potentializing our ecosystem still more.

As to the offer of products, Renner's marketplace lab continued to expand categories and varieties, doubling the digital assortment in 3Q21. Although still at the test phase, the platform has already met its annual target, now registering 115 sellers and the efforts continued to be focused on validating partners and in the optimization of processes as well as in the complementarity of products and price brackets.

On the content & branding front, our focus is on awareness and leveraging flows through the construction of seasonal campaigns and initiatives for improving customer recurrence, engagement and monetization. Among such initiatives was the realization of twelve lives in the quarter as well as the intensification of partnerships with influencers and growth of 25% in activations of new partners, significantly increasing the reach potential.

Progress was made in the development of the loyalty program with the running of concept testing of some customer benefits to be offered.

In financial solutions, Realize has been increasing its presence in the ecosystem. In this context, there was progress in the offer of products at Renner, as well as product capture in the other businesses, with record Total Payment Volume (TPV). In addition, the active customer base rose 7% quarter-on-quarter with services revenue gaining still greater traction. Realize also executed new financing operations for sellers and advanced in the digital account product, to be launched in November for customers in a single city.

As to the adjacent services to the core, in August, we concluded the acquisition of Repassa, beginning the process of its integration into the ecosystem. In the quarter, the startup launched its first physical collection point as well as making improvements in level of service and productivity with a 50% reduction in time taken for listing the garments and registration.

Also worthy of note were our initiatives in ESG. In the period, we met the first of our 2021 public commitments in sustainability with 100% of the supply chain achieving its socio-environmental certification. We also launched new sustainable collections and renewed others, as well as rolling out our circular store, a first in Brazilian retailing using this concept.

And so we embark on the last quarter of the year! The week of Children's Day was a record with growth of more than 35% versus 3Q19 and we continued to see the robust trend in sales of the past few months. We are already organized for a totally omni Black Friday and our inventory is well composed for the Christmas period. In addition to the optimism in relation to the short term, we are convinced as to the promise of our future. Irrespective of the challenges that we may face, we shall not put aside our investments in strengthening our ecosystem. We believe that brands with a meaning and a clear value proposition generate competitive differentials and create conditions for gains in market share, more especially in a scenario of enhanced consolidation of the industry. We are the largest omni player in the apparel business in Brazil and we continue committed to our projects allowing us to increasingly consolidate our business as the leading ecosystem in the segment, maximizing the enchantment of our customers.

Results 3Q21

3

Fashion and Lifestyle Ecosystem

	ENCHANTMENT
Marketplace	Content &
& Services for Sellers	Branding
	CORE

CRM &		Adjacent Services to
	the Core
Loyalty
	Financial	Omnichannel
	Solutions

Omnichannel

• Digital Sales continued to perform well in the quarter, a period in which consolidated GMV reached R$ 377.4 million and represented 12.2% of total sales, despite the normalization of the bricks-and-mortar operation since the beginning of the quarter. Additionally, even factoring in the effects of the cyber attack in August as well as the high comparable base in 3Q20 when online sales reported record growth (+201.4%), digital sales rose 8.2% in the period. This performance reflected the continuous investment in improving the customer experience, issues involving the post sale phase, integrated tools of live commerce and principally, improvements relating to the last mile.
• In relation to the Renner's online active customer base, there were about 3 million customers until September, an evolution of ~40% versus the previous year with an increase of 5 p.p. in retention.
• In terms of online flow, it reached about 258 million visits, of which, 68% were through the app. In the period, there were 4.8 million downloads, corresponding to an installed base of 7.5 million users and maintaining, once again, the absolute leadership in Monthly Active Users (MAU) among national players, according to the data from AppAnnie.
• As to Omnichannel offer, after the implementation of the infinite aisle in the second quarter, when 100% of the assortment of the bricks-and mortar stores became available for online purchases, priority was shifted to service and cost aspects. In this context, there was a significant increase in speed of delivery with 45% being executed in D+2.
• With respect to the last mile, a pilot operation was introduced in Arujá (in the greater São Paulo area) involving the direct management of transportation and delivery to the customers in São Paulo, this already revealing significant gains in the level of customer service with 90% of the deliveries either same or next day. Additionally, Youcom migrated the e-commerce CD from RJ to SP with 70% of deliveries to the greater São Paulo area now being executed on the same or next day and 70% of the total deliveries nationwide being made in D+2. The construction of the Omni CD in Cabreúva (SP) proceeded on plan with the completion of building work and a start being made on the assembly of equipments.
• The relevance of available sales channels continued gaining traction. Of particular note were sales via whatsapp, where there were advances in active communication with customers and a growth of 27% versus 2Q21. Similarly, social sales (Minha Sacola) rose 6 times against 3Q20, largely due to the greater presence of influencers in the base. This, at the end of the quarter totaled 31 thousand affiliates.
• From the point of view of store operations, the expansion plan proceeded apace with 2 units being rolled out in the quarter. Also, advances were made in the digitalization of store activities with 79 units operating checkouts via RFID, introducing greater flexibility and agility to the process. In terms of checkout, more than 45% of the sales of some units are already being conducted away from the traditional cash desks. Purchases can be concluded through the Mobile Checkout, made by store employees using instore mobile devices; Self Checkout, self-service totems; as well as Pague Digital, through customers' smartphones, continuing to be a highlight of store operations. This modality represented more than 10% of the sales of stores in some regions, payment being made through the digital wallet on Renner's app.
• All of these initiatives have once again led to record levels of enchantment as well a relevant increase in the omni customer base, which increased 47% compared to the same period in the previous year.

Results 3Q21

4

Results 3Q21

Fashion and Lifestyle Ecosystem

Content & Branding

• • In the Content and Branding pillar, it was given focus on awareness and flow generation leveraging, with evolutions in the construction of seasonal campaigns and in initiatives directed towards improving recurrence, engagement and customer monetization.
  • Some important initiatives were also adopted in the construction of the digital brand image. In the RennerPlay project, that connects Renner to the gamer universe, was launched a collection of apparel interactive with the League of Legends game. In addition, the positioning of the digital brand was strengthened through the Tá Online, Tá na Renner (You are online, You are at Renner) campaign on Children's Day, reaching a Web audience of 36 million people.
• Lives: The strategy proceeded apace in different formats and through partnerships with influencers, brands and content channels. In 3Q21, 12 lives were broadcast focused on different businesses, feeding through to direct benefits for revenues. Particular focus here on the launch of the spring-summer collection with a fashion show associated to 3 lives as well as content and fashion channels in conjunction with partners.

Improvements were also made in simultaneous transmission through different channels as well as the realization of purchases during transmission.

Main results versus 2Q21

+88% of revenue assisted via digital channels

+25% of organic engagement, the result of optimization of posts strategy

+25% of influencers activations

• The Masked Singer: the campaign on the show was mainly focused on awareness. During each episode, about 37 million people were impacted by vignettes and merchandising initiatives with a direct effect on site flows.
• Influencers: the strategy has been intensified in recent months, with a growing range of partners. During the period, there was a 25% increase in influencers activations in different regions of the country versus 2Q21, which increased the potential reach by 23%. There was also progress in the activation of native influencers on TikTok, with a focus on trends and approximation to the Z generation, resulting in an increase of more the 11 times in the quantity of followers from July to September.

CRM and Loyalty

C R M

• The Company has seen monthly expansion in its customer base as well as in retention, which was 4 p.p. up on 3Q20. Currently, the ecosystem has 16.3 million active customers versus 15.6 million in June and a year-on-year increase of 23.9%. We recorded progress not only in the size of the base but also in its identification with 85% of sales now being identified, an increase of 13% over 2020.
• Additionally, ecosystem customers have become increasingly integrated across channels. Thus, the omni base continued to advance, with an increase of 47% compared to 3Q20. These customers purchase with greater frequency, generating spending 3 times more when compared with the other channels. From the point of view of synergy between businesses, customers making purchases in more than one of the ecosystem brands spend as much as 6 to 7 times more than remaining customers.

L O Y A L T Y

• The Loyalty Program platform has already been contracted and should enable a cross-brand dynamic, serving all ecosystem customers. During the quarter, proofs of concept were undertaken in the case of some of the benefits of the program, which will offer monetary advantages as well as differentiated experiences.

5