SOCIAL REPORT | 2011
Index Message from the President A Cia. Hering Mission, Vision and Values; The story of Cia. Hering; Sustainability; Highlights; Business model Brands; Corporate Governance; Awards and Recognition.
Indicadores de Desempenho Financial performance indicators; Social performance indicators; Environmental performance indicators.
Hering Museum Hermann Hering Foundation Annual Social Balance 2011
Message from the President Cia. Hering ended 2011 with impressive results, including sales growth, margin expansion and increase return on invested capital. The combination of strong brands and a differentiated business model resulted in increased generation of shareholder value. We reached the end of the year with 530 stores for the four brands, Hering, Hering Kids, PUC and dzarm. In Brazil and Latin America, more than 15,000 multi-brand customers, plus new things in the Web-stores of the Hering, PUC and dzarm brands, thus maintaining a thorough presence in the market. All these results were based on important values that have accompanied our company in these 132 years: respect for clients, commitment, ethics and integrity, innovation and sustainability as the company is aware of the role of a transforming agent within their relationships with employees, business partners, investors, suppliers, customers and the community. Among the highlights of the year, important activities in the environmental area, such as maintaining an extensive area of conservation, the strengthening of social projects and partnerships such as Junior Achievement through volunteers and the IBCC - Instituto Brasileiro de Controle do C창ncer (Brazilian Institute for Cancer Control). Formatting a social investment policy with a national coverage and the implementation of a code of conduct for suppliers. Many important factors could adversely affect our results, such as those foreseen in our future estimates and
statements that are in the Quarterly Report 4Q11 (www.ciahering.com.br/RI), the example of market challenges in the short term. However, the macroeconomic environment remains positive with a favorable outlook for the purchase of clothing, caused by the grip of our brands to the growth of the buying potential of the Brazilian population and the rise of the class C. For 2012, our goal is to continue to grow sustainable, with the appreciation of people, cost control, care for the environment, rigidity with risk management and attention to growth opportunities that may arise.
Fabio Hering President
Hering Store - Balneário Camboriú / SC
Cia. Hering
Ethics, Quality, and Sustainability It is on these pillars that Cia. Hering founded its values ??and guided its mission.
Business Brand management, product development and distribution channels for clothing. Vision Be recognized as the most profitable and the best managed clothing brands. Mission Develop brands, create and market clothing products and services with a perceived value and customer focus.
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SOCIAL REPORT | 2011
Cia. Hering
Values Respect for customers - Enchant the customer with products and services that exceed their expectations. Sustainability - To be economically profitable, promoting social and environmental responsibility. Integrity and Ethics - Acting with transparency and ethics, respecting the rules of society. Innovation and openness to change Search and monitor the market, seeking to reinvent it. Commitment - Attitude toward achieving the goals according to the company's strategic vision.
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SOCIAL REPORT | 2011
Cia. Hering
1880 Hermann brings the whole family to Blumenau. The wife Minna arrives (41 years old) with their children Johanna (13 years old), Nanny (10 years old), Margaret (seven years old), Max (5 years old) and Gertrud (1 years old). With them the brother Bruno also arrives. In the same year Hermann and Bruno began the Trikotwaren Fabrik Gebr端der Hering, recreating the Gebr端der Hering, from 1860, which they retained as a Company in Germany. Preserving the environment and the appreciation for quality are values that perpetuate and have always been present in the DNA of the Company Hering. Still in the early history of the company, the brothers Hermann and Bruno received important recognitions, in 1882 Hermann received the award in recognition of the quality of products produced, and in 1906, the Pioneers of Ecology award honored Bruno Hering, for his pioneering actions aimed at reforestation in Brazil.
1914 The installation of the Spinning Mill (imported from Germany) allows self-sufficiency in yarn production. During this period the spinning unit had 2,600 spindles and the factory was operating with 10 thread rolling machines, 90 circular looms and 100 sewing machines.
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SOCIAL REPORT | 2011
Cia. Hering
1935 In honor of the centenary of birth of the founder Hermann Hering the Hermann Hering Foundation was created.
1964 The Company went public and exports began. The Sports Association - AD Hering was started.
During the phase of huge expansion, a program of reorganization, modernization and expansion transforms the Company into one of the largest knitwear company in Latin America.
1967
1973 The implanting of a waste treatment plant becomes a reference for the region.
1980 The IndĂşstria TĂŞxtil Companhia Hering (Hering Textile Company) changes its name to Cia Hering and reaches maximum capacity. Celebrating 100 years of its foundation.
Cia. Hering
1993 Starts repositioning for retail, with the opening of the first Hering Family Store.
- Customer Service comes into operation.
1994
1995 Hering becomes the first partner of the IBCC - Instituto Brasileiro de Controle do C창ncer (Brazilian Institute of Cancer Control), supporting the Fashion Target Breast Cancer campaign. The EMS Environmental Management System is implanted.
1997 Beginning of operations in the state of Goias, in the city of Annapolis.
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Cia. Hering
1998 The first franchise of the PUC kids is opened.
The integration with the SGI Systems (Integrated Management System) is started Environmental, Safety and Quality.
1999
2002 The company reduces the number of brands and focuses on four of them: Hering, PUC, dzarm. and Hering Kids. Cia. Hering is awarded in New York, the CFDA – Council of Fashion Designers of America prize. This is an international recognition for support in the Fashion Target Breast Cancer campaign contributing to the free treatment of thousands of women in the prevention of breast cancer.
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Cia. Hering
2005 Hering becomes renewed at 125 years of age and joins as a partner and a founder of the SCMC project - Santa Catarina Contemporary Fashion.
2007 Cia. Hering enters into Bovespa's New Market and becomes part of the portfolio of the Index of Corporate Governance (IGC). The Itororo Unit in Blumenau implants a reusable water project.
2010 Cia. Hering is elected as the Company of the Year by the yearbook, Melhores & Maiores of the Exame magazine (Best and Biggest) the main Brazilian publication on finance and business. In celebration of 130 years the company inaugurated the Hering Museum.
2011 The opening of the 400th Hering Store, starts a Dzarm and Hering Kids pilot project. Revitalization of web stores and the start of brand management in the social media.
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SOCIAL REPORT | 2011
Sustainability
Sustainability
Sustainability practices accompany Cia. Hering since the beginning. They are born from the personal convictions of the founders.
The concepts of sustainability adopted by the company form a wide range of actions aimed at the areas of social responsibility and environmental development.
All sustainability programs implemented by Cia. Hering have the human being as a focal point and seek to contribute to improve the quality of life of people with an environmental integration. As one of the leading Brazilian companies in its segment, Cia. Hering is aware of the role of a transforming agent within their relationships with employees, business partners, investors, suppliers, customers and the community.
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Sustainability
Quality and Sustainability Policy ?• Develop brands and distribution channels supplying quality products and services and value to delight your customers;? • Ensure an ethical work environment, that is healthy and safe by contributing to the development of life of its employees; ?• ?Be economically viable, promoting social and environmental responsibility, respecting the rules of society. Tratamento de Água na Unidade Itororó da Cia. Hering
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Highlights • ?In 2011 the Company showed a 33.4% growth in total gross revenue compared to 2010, while total sales of the Hering chain grew 31.8%, 12.7% being the "same store" criterion; • Cia. Hering closed the fourth quarter of 2011, with 432 Hering stores, 76 PUC , 5 stores bearing the Hering Kids brand, and one flagship store of the dzarm brand, and 16 stores with the Hering Store flag abroad (Latin America); • The Company has 8,501 employees in 13 units; • The Company invested 20 million in activities aimed at the Employee, such as alimentation, professional qualification, education and welfare. • In 2011 the Company invested about R$ 1,900,000.00 in tax incentive laws that promoted the democratization of culture and sport; • Implanted a new unit and expanded its existing manufacturing facilities with machinery, equipment and energy efficient lighting. • Cia. Hering has about 8.5 million m² of preserved/conserved green areas in its units. For every 1m² of built up area the company has 49.23 m² of preserved green area.
Cia. Hering
The brand of the two little fish The word Hering means "herring" in German. It is a type of fish like sardines. The two fish represent the brothers Hermann and Bruno Hering, who started the company in 1880, after their arrival from Germany.
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SOCIAL REPORT | 2011
Business Model
Business Model
Business Model The Cia Hering business model combines brand management and channels of distribution with its own production outsourcing phases of production and the purchase of finished products (outsourcing). The main suppliers are located in Asia, Middle East and Latin America.
This business model differentiates the Company in respect of its main competitors, as they sought to balance a comprehensive and solid retail network, strong brands that are recognized by the public and a hybrid model of production supplies, logistics and distribution characterized by flexibility and agility.
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SOCIAL REPORT | 2011
Business Model
Manufacturing Structure
Unidade Cia. Hering em Indaial/SC
Santa Catarina: Head Office Bom Retiro Unit - Blumenau Itororó Unit– Blumenau Ibirama Unit Rodeio Unit Indaial Unit
Unidade Cia. Hering em Rodeio/SC
Goiás: Anápolis Unit Goianésia Unit Paraúna Unit Santa Helena Unit Distribution Center/Warehouse Annapolis; Unidade Cia. Hering em Anápolis/GO
São Paulo: The office has franchise, Product Development, Marketing and Investor Relations departments. Rio Grande do Norte: Parnamirim Unit
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SOCIAL REPORT | 2011
Brands
Brands
Hering, notable for being a democratic brand among consumers, with wide acceptance in all social classes and age groups. The brand has been in the market for over 130 years, Hering has become synonymous with comfort and style, translating into "fashion, causal, daytime and accessible," able to reinvent itself while maintaining its identity and tradition, without losing its tuning with the trends, colors and shapes of fashion!
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Brands Hering Kids the Cia. Hering kids brand combines fun, comfort and style to dress the kids in tune with fashion. With the extension into the line baby, the brand shows in its collections fashion and style references of casualwear, without leaving vanity aside, a typical characteristic of children. The collections are all inspired by the latest fashion trends from around the world and bring cool, colorful clothes with lots of charm.
Brands
PUC the children's brand of Cia.Hering, presents the main fashion trends in its collections. These are cheerful and colorful Looks, with plenty of style for boys, girls and babies. Aimed at children from social classes A and B, the brand dresses children aged from 0 to 10 years, for both special occasions, as well as the day-to-day. The style references follow the lines of the PUC mini-adult fashion, trendy and colorful.
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SOCIAL REPORT | 2011
Brands
dzarm. is a young brand under the umbrella of Cia. volunteers. Geared towards young people aged between 18 and 28, in tune with music and new technologies, dzarm. conquers the A and B public in the Brazilian market. With constant updates, the brand launches six collections a year. The highlight of the product mix is the Jeanswear, carefully constructed with several washes and differential designs.
dzarm. is sold in its own store in Shopping Analia Franco in Sao Paulo, opened in late 2010 and in about 3000 retail outlets throughout the country. To identify with its audience, it invests in communication in social networks, interacting via Twitter, Facebook and Orkut. In addition, it takes part in events on the national fashion scene and of course parties, getting closer to its universe, as well as the environment of its audience.
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SOCIAL REPORT | 2011
Retail Presence
Retail Presence
The retail structure allows for a presence throughout the country with operations in the market through the following distribution channels:
•?Owned and franchised stores; •?Multi-brand retail; • ?Web stores of the Hering, PUC and dzarm. brands. Cia. Hering closed the fourth quarter of 2011, with 432 Hering stores, 76 PUC , 5 stores bearing the Hering Kids brand, and one flagship store of the dzarm brand, and 16 stores with the Hering Store flag abroad (Latin America);
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SOCIAL REPORT | 2011
Corporate Governance
Corporate Governance
Corporate Governance, according to the Brazilian Association of Corporate Governance is "the system by which companies are directed and monitored, involving relationships between Shareholders, the Board of Directors, Executive Officers, Independent Auditors and the Audit Committee." Good corporate governance practices are designed to increase the value of the company, facilitate its access to capital and contribute to its sustainability.
The basic principles underlying this practice are:
•?Transparency; •?Equity; • Accountability; •?Corporate responsibility. 28
SOCIAL REPORT | 2011
Corporate Governance
In 2007, Cia. Hering joined the New Market segment of BOVESPA and became part of the portfolio of Shares Index with Differentiated Corporate Governance (IGC). Cia. Hering is committed to achieve and maintain high standards of corporate governance, and its Charter contains all the minimum clauses required by the New Market of BOVESPA.
The New Market is a listing segment of Bovespa for the trading of shares issued by companies that voluntarily commit, with the adoption of corporate governance practices and disclosure of information regarding what is required by law. The rules of the New Market require, besides the obligations imposed by Brazilian law, the compliance with the following requirements, among others:
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SOCIAL REPORT | 2011
Corporate Governance
?• Issue only common shares; • Keep at least 25% of capital shares of the Company in circulation; • Provide all shareholders the right of joint sale (tag along), in case of transfer of control of the Company, providing each share with the same conditions and same price paid per share of the controlling block; • Adopt offering procedures that favor widespread ownership; • Provide shareholders with a calendar of Company events; • Limit, to no more than two years, the mandate of all members of the board of directors, composed of at least five members, with at least 20% of them being independent; • Detail and include additional information in the quarterly statements; • Follow stricter disclosure policies with respect to transactions made by controlling shareholders, directors and officers;
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SOCIAL REPORT | 2011
Corporate Governance
• Prepare, from the second closed fiscal year after entering into the New Market, quarterly and annual financial statements, including
• Cash flows statements, in English, according to international accounting standards, such as the U.S. GAAP or IFRS;
• Hold, at least once a year, a public meeting with analysts and other interested parties to disclose information regarding the Company´s financial situation, projects and perspectives;
• If the Company leaves the New Market, for the shares to be traded outside of the New Market, the controlling shareholder must make a public offer to acquire the outstanding shares, for at least the economic value determined by an appraisal report prepared by a specialized and independent firm;
• Exclusively adopt the rules of the Regulation of the Market Arbitration Chamber, for which the BOVESPA, the company, shareholders, administrators, and members of the Audit Committee of the company, if any, agree to settle any dispute or controversy related to the listing rules through arbitration.
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SOCIAL REPORT | 2011
Awards and Recognition
Awards and Recognition
Cia. Hering in the Melhores e Maiores (Best and Biggest) On July 7, Cia. Hering received recognition as being the best company in the textile and clothing sector. The award was presented by Editora Abril, through the Melhores e Maiores (Best and Biggest) Guide. Fabio Hering Presidente, recebendo o prĂŞmio.
Hering is Elected as one of the Trademarks of the Century From a poll conducted by 21 renowned judges in the business world, the Hering brand was elected as a highlight in the market by the magazine; Brands of the 21st Century, from Editora Empreendedor. The award ceremony took place on May 19, 2011 in Florianopolis.
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SOCIAL REPORT | 2011
Awards and Recognition
Storekeeper Merit Cia Hering received the "Goddess of Fortune" statue at the 32nd Storekeeper Brazil Merit Award, after being recognized as the Company Innovation Highlights 2010. The award ceremony took place on March 31, 2011.
New Market Award Cia. Hering received the special prize of the New Market, the award aims to show companies that achieved the best performance for shareholders, based on an exclusive methodology. The ceremony took place on June 28 in Sao Paulo.
Modern Consumer in 2011 On May 30, 2011, Cia. Hering received, in its 12th edition, the Modern Consumer Award for Excellence in Customer Service in the Fashion category, this award seeks to recognize companies that have the best strategy for customers at all points of contact and seek excellence as a competitive advantage in providing their services.
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SOCIAL REPORT | 2011
Awards and Recognition
Abrasca In August, the Abrasca award honors publicly traded companies that grew the most over the last three years. Cia Hering received the Distinction Award in 2011 for the Apparel Industry from the Brazilian Association of Public Companies. Frederico de Aguiar Oldani Diretor Financeiro, recebendo o prĂŞmio
Valor Yearbook 1000 Cia. Hering received recognition in the Textile, Leather and Clothing sector in the 11th edition of the Valor 1000 yearbook, which circulated on 30 August. The publication that is part of the Valor Economico newspaper, lists the 1000 largest companies by net revenue in the country and chooses, among them the best from each sector based on balance sheet data.
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SOCIAL REPORT | 2011
Awards and Recognition
Certificate of Sustainability in Government and Society Cia. Hering won the Certificate of Sustainability in Government and Society, while taking part in the seventh Sustainable Management Survey held by the Company and Editora Express達o and Aequo Solutions in Sustainability and based on the seven Ethos indicators. The award ceremony took place in August in Florianopolis - SC.
Best companies for shareholders Cia. Hering was one of nine companies honored with the award "Best Company for Shareholders in 2011." Dedicated to public companies that offered good results to its shareholders in five areas: liquidity, value creation, return on the stock and dividends, corporate governance and sustainability. The award ceremony took place on October 4 at the Casa Brasileira Museum in Sao Paulo.
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SOCIAL REPORT | 2011
Awards and Recognition
Companies that Communicate Better with Journalists By recognizing and encouraging companies and their press offices to maintain a good relationship with journalists, the Prize " The Companies that Communicate Better with Journalists in the Sector - Textiles and Clothing" values the role of the media professionals and contributes to better quality information and greater transparency in communication.
ABF Award - Prominence The award is presented annually by the Association to the professionals that stood out in the practice of franchising. The Hering brand received the award in the Master category, accompanied by the PUC brand in the senior category .
Prize "The More Important in Retail" The award "The More Important in Retail 2011" is an unprecedented initiative taken in the market by the RETAIL Journal in partnership with Accenture consultants, who applied their methodology to define the overall winners.
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SOCIAL REPORT | 2011
Awards and Recognition
Carter Capital - Most Admired Companies in Brazil Prizewinner in the Clothing and Apparel category, Cia Hering in October, was honored by Carter Capital as one of the most admired companies in Brazil.
Complain Here Prize "Service Quality" In the category Fashion, Cia Hering was honored in November with the "Service Quality" award offered by Complain Here. Participating companies are evaluated using the criteria: time taken to answer, cordial response and positive opinion of the consumer when closing the service.
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SOCIAL REPORT | 2011
Financial performance indicators
indicators
Financial performance 2011 was another year of impressive results for Cia Hering, keeping the combination of sales growth, expansion in margins and increased return on invested capital, albeit in a more challenging environment. Cost pressures in raw materials, most adverse weather and a slowdown in consumer spending during the second half were some of the challenges faced throughout 2011. Yet 2011 ended with gross revenues of R$ 1.6 billion, an increase of 33.4% compared to 2010, again with sales up by double digits in all brands, EBITDA totaled R$ 394.5 million in the year (+42.7% on 2010), with an EBITDA margin of 29.1% (+ 1.9 percentage points over 2010).
The Hering brand, whose sales grew 31.8%, remains the main platform for growth. This performance is related to the strength of the brand, from its democratic position, continues to attract audiences of diverse ages, regions and social classes from its product that offer an excellent cost-benefit, whether in casual fashion or traditional basic products. Despite the strong growth since 2007 we are confident in the potential we have yet to explore with the Hering brand from continuing the process of expanding the Hering chain, the growth of market share in the multibrand retail channel and the promising web-store channel.
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SOCIAL REPORT | 2011
indicators
In view of the study conducted in 2010 by which the potential of the network Hering in 604 stores was appraised, the pace of growth remained accelerated and must evolve along with the social-economic indicators and brand penetration.
In the Hering Store chain, the main distribution channel, there was another year of significant growth, both in number of stores with the concept of “the same stores�. With 85 store openings throughout 2011, the year ended with 432 stores. Whereas, the stores that are already in the market achieved a growth of 12.7% when combined with the opening of stores contributed to the growth of total net sales of 33.4%.
In the children's market, the new business strategy that was used in 2010 for Hering Kids and PUC will continue. In the PUC brand, the necessary adjustments to suit the distribution network to the brand positioning meant that the PUC chain closed the year with 76 stores, two less than at the end of 2010.
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SOCIAL REPORT | 2011
indicators
Even so, the brand grew by 26.3%, due to the goof performance of the multi-brand retail channel and the sales of the same stores in the PUC chain. In Hering Kids, with a sales growth of 41.6%, the performance was very positive in both the retail multi-brand channel as well as the Hering Kids pilot stores, which reinforces the confidence in the assertiveness of the strategy developed for the brand and the new growth fronts that explore from the development of Hering Kids network.
The dzarm. brand also showed a positive performance in 2011, with a growth of 42.2% in gross sales. Although the new position taken since August 2009 has continued generating impressive results in multi-brand retail channel, the results of the flagship store have been modest so far. Cia. Hering will continue investing in developing the brand through marketing initiatives and the possibility of opening some additional flagship stores, which play a key role in this process.
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SOCIAL REPORT | 2011
indicators
The main challenges during the year were related to increased costs of raw materials due to the increase in cotton prices. Through a combination of price increases, changes in product engineering and the supply chain, Cia Hering was able to minimize the effects of pressure on the costs, and consequently, a reduction 106 bps in the gross margin was presented. Even so, the business model was able to offset the cost pressures and generate an EBITDA margin expansion due to the good sales performance of brands combined with high operating margins of our business.
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SOCIAL REPORT | 2011
indicators
Destaques Consolidados Var. 12M11 / 12M10
12M10
12M11
Gross Revenue
1.235.121
1.647.308
33,4%
Internal Market
1.213.951
1.625.932
33,9%
Foreign Market
21.170
21.376
1,0%
Net Revenues
1.013.486
1.353.233
33,5%
Gross Profit
501.932
655.852
30,7%
Gross Margin
49,5%
48,5%
-1,1 p.p.
Cash Earnings (a)
512.957
669.722
30,6%
Gross Cash Margin (a)
50,6%
49,5%
-1,1 p.p.
Net Income
212.013
297.274
40,2%
Net Margin
20,9%
22,0%
1,0 p.p.
EBITDA(b)
276.500
394.464
42,7%
EBITDA Margin (b)
27,3%
29,1%
1,9 p.p.
ROIC Š
44,3%
48,6%
4,3 p.p.
R$ Mil
(a) Gross Profit and Gross Margin purged depreciation appropriate to cu: (b) Earnings before interest, taxes, depreciation, amortization and participations. (c) Latest 12 months - see item no. 8
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SOCIAL REPORT | 2011
Social Performance Indicators
Social Performance Weaving Successful Relations!
Cia. Hering weaves successful relationships with its domestic audience through actions and programs that promote professional development. It invests in the development of its employees acting in order to enhance and retain talent, providing conditions for having a stimulating work environment, with opportunity for growth, sense of justice and prepared leaders.
An example of these relations is the group of communication agents. This volunteer team of agents disseminates information within the company, promoting transparency and providing improvement in the Cia Hering organizational climate.
Grupo dos Agentes em treinamento no Beto Carrero World
Social Performance
Another team that makes the difference in the company is the Cia Hering group of volunteers. volunteers. Acting on planned activities and focusing on education, the volunteer group carries out projects in partnership with Junior Achievement in the public schools in the city of Blumenau. Another line of action of the group of volunteers is the encouragement and support for internal campaigns that motivate with activities such as voluntary blood donation.
Social Performance
Weaving Healthy and Safe Relationships
The respect that Cia. Hering has with its internal public also expresses the concern that the company demonstrates to build a safe work environment, either by neutralizing risks, or being aware that its employees under its responsibility preserve their integrity and welfare.
Cia Hering systematically promotes actions aimed at raising the awareness of its employees, such as Training Courses for the Volunteer Fire Brigade, Accident Prevention Week, Emergency Simulations, Quality and Sustainability Week - and DDSQ Daily Safety and Quality Dialogue among others.
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SOCIAL REPORT | 2011
Social Performance Among the programs, actions and benefits that support the success of these relationships, the following stood out in 2011: Programs and Activities aimed for the Workforce
Number of employees that were benefited in 2011
Mom on Board Program The program is geared for the moms and dads in Cia. Hering, the training covers topics such as breastfeeding, first aid for babies and feeding. Since the program was launched more than 1,000 moms and dads have been benefited.
69
Company Sweet Home The program is aimed at employees and family members who carry out a fun and entertaining tour of the production flow in the Company volunteers.
120
Vaccination against Influenza Benefit for the employees in Santa Catarina.
1669
Workplace Gymnastics Benefit available to employees of Cia. Hering in the states of Santa Catarina and Goias
5389
Physical Therapy First Aid Station Available to all employees of Blumenau units with medical indications.
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SOCIAL REPORT | 2011
Social Performance
The PPR is the Results Sharing Program for employees of Cia Hering. This program aims to provide employee participation in profits by providing the opportunity to contribute to the operating result and integrating the company's capital and the work of the employee as an incentive to productivity. Believe and invest in professional training is also one of the links to the successful relationship with the employees. In 2011, Cia Hering offered more than 117,716 hours of development and training for their employees.
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SOCIAL REPORT | 2011
Social Performance
Management seminar has promoted the professional qualifications for more than 600
leaders in the Company. The annual training designed for supervisors,
coordinators and technical assistants in the working aspects of people management, conflict management techniques, public speaking skills and interpersonal relationships.
Another initiative that provides employee development through education projects are the School of the Future and Learn to Click. In partnership with SESI and projects initiated in 2008 to nurture digital inclusion and the opportunity to complete primary and secondary education.
Since the beginning of the project, 55 employees completed the elementary and middle school through the program that is carried out in the Santa Catarina units. The Learn to Click program already permitted the graduation of 280 employees in basic and intermediate levels of computer training.
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SOCIAL REPORT | 2011
Social Performance
Social Performance
Training and Development
2009
2010
2011
Total investment in Training and Development
R$ 863.939,82
R$ 1.268.871,68
R$ 1.820.237,68
Hours of training applied to employees
64.619
144.490
117.716
% Investment in Training and Development based on the payroll
1,27%
1,35%
1,66%
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SOCIAL REPORT | 2011
Social Performance
Suppliers Cia. Hering has established a relationship with their suppliers based on transparency, respect and trust. Based on these principles, in 2011 the Company initiated a project to build the specific code of ethical conduct for its suppliers. In the first instance the project will consider a pilot group. The goal is to build a relationship of value, seeking to positively stimulate a commitment from Company suppliers. Hering in aspects related to legal compliance social responsibility.
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SOCIAL REPORT | 2011
Social Performance
Community The social work of Cia Hering has contributed decisively to the communities where it operates. Over the years the company has supported the implementation of several major entities for the development of all communities where it operates and maintains social inclusion programs for inmates, to promote diversity and support for volunteers.
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SOCIAL REPORT | 2011
Social Performance
Breast Cancer – Fashion Target campaign Hering had maintained a successful partnership with the Brazilian Institute for Cancer Control for 17 years. Engaged in the IBCC campaign "The Breast Cancer Fashion Targets", the partnership shows positive results, both in terms of awareness, such as fund raising for the treatment of disease in thousands of patients and the expansion of the hospital infrastructure, modernization of technology park. Launched in Brazil in April 1995, the initiative began with that famous T-shirts with the blue target. Each shirt was sold for R$ 6.50 to the Institute. The varied mix of t-shirts are now sold exclusively by Hering across the country. Only in 2011 more than 650,000 campaign shirts were sold.
All the celebrities photographed for the Hering ad campaigns, and also posed with the shirts for the campaign "Breast Cancer – Fashion Target," and donated their fees to the cause. Among the artists photographed recently are Deborah Secco, Claudia Leite, Adriane Galisteu, Malvino Salvador, Marcelo Serrado Rodrigo Faro, Marcio Garcia, Christine Fernandes and others.
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SOCIAL REPORT | 2011
Social Performance
Training for prison inmates Since 2006, Cia Hering is a partner of a pioneering task in the state of Goias, Training for inmates that is carried out in partnership with the Prison Agency of the State of Goias. The focus of the project is the rehabilitation, where inmates work in the packaging of the parts produced by Cia Hering in the state. The work began in the city of Annapolis, and today is also carried out in Goiania and the city of Sao Luis dos Montes Belos.
Currently the project benefits 300 inmates. For every three days worked one day is reduced from the sentence to be served, and the wages received are passed on to their families.
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Social Performance
Sewing Course The project offers free classes to people in the community. Students enrolled in the course in the factories of Cia Hering that besides the structure, also provides training in partnership with Senai. The company also offers bus passes, meals, materials, medical and life insurance. Besides training students, the course also offers the chance to be hired to the staff of the company.
Formatura de colaboradores da Unidade Encano
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SOCIAL REPORT | 2011
Social Performance
Junior Achievement Strengthening further its sustainability initiatives, and the main goal of awakening volunteers among employees, Cia Hering since 2008 has a partnership with Junior Achievement, the oldest and largest organization of the educational practice of economics and business worldwide. In this partnership, the company's employees work as volunteers in the implementation of various projects for students from elementary and middle school. The subjects covered range from Ethics, Citizenship Personal Economics, the Benefits of Staying in School, Introduction to the World of Business and also the Mini company project that provides practical experience in economics and business, in the organization and operation of a business, conceptualizing themes with the market, marketing and production. Voluntรกrios da J.A.
In 2011, 752 adolescents and young people in public schools benefited from the project, through the operation of 46 volunteers.
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Social Performance
Student beneficiaries and volunteers Year
Volunteers
Students benefited
2009
28 volunteers
200 students
2010
33 volunteers
439 students
2011
46 volunteers
752 students
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SOCIAL REPORT | 2011
Social Performance
Entra 21 Cia Hering supports the Entra 21 Program-Blusoft, which serves low-income youths from 16-25 years who are studying or have completed high school and residing in Blumenau or in nearby towns, especially IIlhota, Gaspar, Luis Alves, Pomerode, Indaial, Timbo, Benedito Novo, Apiuna, Rodeio, Ascurra, & Rio dos Cedros.
Besides social inclusion that is generated, the program also meets the strong demand for skilled labor in the area of IT in the Blumenau region. The training is completely free for the students, including textbooks and transportation. In 2011, 254 youths were trained and 52% of these are already working in the labor market.
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SOCIAL REPORT | 2011
Social Performance
Estande da Cia. Hering no SCMC
Santa Catarina Contemporary Fashion Encourages the development of an environment of innovation, design and fashion culture and influences the academic training in Santa Catarina, are values that motivated the creation of the SCMC. The project brings together the major players in the fashion chain in the State and the students highlight the Fashion Design courses for the study of new knowledge and the languages of the market. These strategic alliances with the Government (FIESC/SENAI and ABIT/APEX), the private sector and educational institutions enable the success of SCMC year after year.
During one year, students experience the daily life of companies and produce a collection using the resources of the industries. Their training is complemented by a series of events, lectures and workshops offered by the SCMC. The end of the training is marked by a great event where academia, industry and the media come together for the presentation of the collections that have been created.
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SOCIAL REPORT | 2011
Social Performance Estande da Cia. Hering no SCMC
In the six years of existence, the project has handled more than 300 direct participating students and more that 1,400 indirects (in the lectures and other events), plus more than 500 company employees. Altogether, about 30,000 people were involved and/or participated in the events of the SCMC, especially the final. For more information visit www.scmc.com.br.
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Social Performance
Support for Sports Among the investments in sports, there is the sponsorship of the Clube Atletico Metropolitano (Metropolitan Athletic Club of Blumenau). Founded in 2002, the club has achieved significant victories for the city and has participated in soccer tournaments in the state.
The Metropolitano also works with major projects such as the "University of the Ball", which served more than 500 children and adolescents from 6 to 12 years of age in 2011, through 02 centers in needy neighborhoods and communities in Blumenau and region.
Another important front and having environmental relevance embraced by the Metropolitan Club Zero is the Carbon Project. In 2011, with the planting of 600 tree seedlings, Metropolitano seeks to recover 98 tons of CO² from 2014 providing the recovery of a riparian forest in Timbo, Santa Catarina.
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SOCIAL REPORT | 2011
Social Performance
Hering Sports Association Cia. Hering also invests in soccer schools of the Hering Sports Association. This important project was started in 1995, and in 2011 benefited more than 200 children and young people between the ages of 5-14. Cia. Hering subsidizes up to 75% of the monthly payments of the Hering Sports Association for their employees, the percentage discount is analyzed from the salary of each employee.
Not only team sports are the focus of Cia. Hering´s investments. Since 2009 the gymnast, Gabriel Suski Dias, 16, has been sponsored by the company. In 2011 he won the individual championship in Santa Catarina, winning seven medals, two gold and five silver.
The impressive results in the category allowed Gabriel to be called for the selection stage of the Brazilian team.
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SOCIAL REPORT | 2011
Social Performance
Social Investment Cia. Hering assumes its role as an agent of social transformation, and its goal of sustainable development. In partnership with SESI, the company began the process of building their Private Social Investment Policy, which is characterized by the voluntary transfer of corporate resources in a planned, systematic and monitored way, for public purposes.
See a little more of what has already been accomplished:
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SOCIAL REPORT | 2011
Social Performance
Resources obtained through tax incentive laws
Ano 2009
Resource Used Lei Rouanet Federal Law of Incentives to Culture. FIA Fund for Children and Adolescents.
2010
Lei Rouanet Lei Federal de Incentivo Ă Cultura. FIA Fund for Children and Adolescents.
2011
Lei Rouanet Federal Law of Incentives to Cultural. FIA Fund for Children and Adolescents. Fundesporte Federal Law to encourage sports.
Investment R$ 354.204,40
R$ 90.000,00
R$1.289.708,38
R$ 100.000,00
R$ 1.707.865,02
R$ 50.000,00 R$ 150.000,00
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SOCIAL REPORT | 2011
Social Performance
Participation in Entities and Core Business Groups Cia Hering participates in several core business groups in order to share information and establish joint actions for improvement in strategic areas of business such as Health and Safety, Quality Management, Social Responsibility, Eradication of Child Labor among others.
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SOCIAL REPORT | 2011
Environmental Performance Indicators
Environmental Performance
Cia. Hering has an Internal Commission for Energy Conservation (CICE), which controls all the consumption of water, energy, oil, waste treatment and environmental indices. The CICE aims to analyze the data, pointing out distortions and propose alternatives to reduce consumption and improve the indices.
Some measures taken to reduce energy in 2011 Implantation of a new production unit with machinery, equipment and high efficiency lighting;
The acquisition of sewing machines with greater efficiency for the replacement of old equipment;
Installation of a high technology dyeing machine that offers 22% savings in water consumption;
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SOCIAL REPORT | 2011
Environmental Performance
Fuels Cia. Hering uses wood to generate steam. All the wood used in the process comes from reforestation. Through energy recovery technology developed in partnership with the Federal University of Santa Catarina - UFSC, the company ceases to burn the equivalent of 520 m続/month of reforestation wood. Apart from wood, natural gas is used to complement the production of steam, thereby reducing environmental impact with respect to emissions.
Electrical Energy Cia. Hering exclusively uses energy from the SHP (Small Hydro Power Plant) for the Headquarters and manufacturing facilities in Blumenau SC. SHP Energy comes from a small hydroelectric plant with a capacity greater than 1 MW and less than 30 MW. The main advantage of using SHP energy is reduced environmental impacts and allow decentralized generation.
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SOCIAL REPORT | 2011
Environmental Performance
Direct Energy Consumption Discriminated by Primary Source (EN3)
Source
Qty (Gcal)
Percentage
Natural gas
53.410,95
42%
Solid Biomass
72.553,689
58%
Total
125.964,640
100%
Indirect Energy Consumption (EN4)
SHP Power Consumption
Qty (kW / h)
Percentual
31.625.988,192
85,6%
Captive Power Consumption (NETWORK) 5.306.928,61 Total
36.932.916,800
14,4% 100%
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SOCIAL REPORT | 2011
Environmental Performance
Biodiversity Cia. Hering has about 8.5 million m² of area in its units. For every 1m² of built up area the company has 49.23 m² of preserved green area .
The bags distributed in the retail area by Cia Hering consist of two materials: FSC - Forest Stewardship Council - certified paper and oxy-biodegradable plastic. In 2011, the total consumption, in all its sales channels, was 27 million packages, made up of bags and cartridges used directly in the sales channels. The paper certified by FSC (Forest Stewardship Council) comes from certified forests and controlled sources, according to principles that consolidate environmental preservation and social responsibility regarding workers and the native population.
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SOCIAL REPORT | 2011
Environmental Performance
Waste All water used in the Cia. Hering manufacturing processes is removed from streams and are treatment at Water Treatment Plant with a capacity for treating up to 360 m続/hour of water. After being used in the manufacturing processes, it goes to the WWTP - Effluent Treatment Plant, which follows strict quality parameters before returning it to the streams of origin.
Treated Water - Itororo Unit - M 続 Months
2009
2010
2011
January
109.907
131.747
172.216
February
124.021
131.572
162.900
March
133.640
146.860
185.449
April
131.217
117.390
160.377
May
123.930
130.352
188.771
June
116.261
115.480
140.521
July
134.400
159.850
162.346
August
148.808
156.085
174.286
September
140.063
149.589
146.165
October
144.160
155.683
169.247
November
139.879
158.788
159.340
December
118.600
123.477
104.073
Total
1.564.886
1.676.873
1.925.691
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SOCIAL REPORT | 2011
Environmental Performance
Reuse of Water All water used in the Cia Hering production processes is treated prior to his return to the environment. The company's current goal is to reduce by 25% of all water consumed.
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SOCIAL REPORT | 2011
Environmental Performance
Water draw-off per Source (EN8) Source
Qty (m続)
Percentual
Rivers
1.790.517,00
98,5%
Public Network
24.123,00
1,3%
Artesian Wells* (estimate)
2.660,00
0,1%*
Total Water Consumption
1.817.300,00
99,9%
Percentage of Water and Total Volume of recycled and reused water (EN10) Qty (m続) Consumption of Treated Water
1.817.300,00
Consumption of Recycled Water
74.217,000
Total Water Consumption
1.891.517,00
Total
100%
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SOCIAL REPORT | 2011
Hermann Hering Foundation
Hermann Hering Foundation This Foundation is a legal entity, it has existed for many years under the laws of most countries, including Brazil. What draws attention in the history of the Hermann Hering Foundation is a vision that has always been present in the DNA of the company and its founders: Share benefits, promote social development, and preserve the tangible and intangible assets. Above all, valuing people, that in more than 130 years of Cia Hering are responsible for the growth of the company and Blumenau´s.
The Hermann Hering Foundation was established on February 3, 1935, in honor of the centenary of the birth of the founder, Hermann Hering. Its main objective was: Distribute benefits, indistinctly and free of any charge, to all servers, workers and employees of Cia Hering.
The Hermann Hering Foundation was declared a public utility under the State law No. 3898 dated September 26, 1966.
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SOCIAL REPORT | 2011
Hermann Hering Foundation
The Foundation Today The Hermann Hering Foundation today, with its revamped bye-laws has the following objectives: a) Promoting actions in favor of culture and sport; b) Promoting actions for the defense and preservation of historical and artistic patrimony; c) Promotion of actions for training and education; d) Promoting actions in favor of volunteer work; e) Protection, preservation and conservation of the environment and promoting sustainable development, and f ) Studies and research, develop technologies and alternatives, production and dissemination of information and technical and scientific knowledge relating to the activities mentioned in this article.
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SOCIAL REPORT | 2011
Hermann Hering Foundation
Key actions undertaken ?Aid Instruction - In order to encourage employees to continue their studies, thus expanding their career opportunities through knowledge, the Foundation provides reimbursement of 40% of the amounts paid by employees on training courses, undergraduate and postgraduate.
Foundation Aid - Help with 20% of the costs of lenses, hearing aids and medicines, for employees earning up to 04 minimum salaries.
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SOCIAL REPORT | 2011
Hermann Hering Foundation
Teaching Help Year 2009
Employees benefited
Help Post - Graduate
6
Under-Graduation
118
CEJA (Center for the Education
Value
39
R$ 133.055,67
of Youths and Adults) Elementary School
10
Languages
6
Technical Courses
45
Total: 224 Employees
2010
Post - Graduate
5
Under-Graduation
152
CEJA (Center for the Education
32
of Youths and Adults) Primary School Languages Technical Courses
R$ 273.968,43 15 10 21
Total: 235 Employees
2011
Post - Graduate
14
Under-Graduation
188
Primary/Secondary School
4
Languages
9
Technical Courses
18
Total: 233 Employees
R$ 339.950,98
Hering Museum
Hering Museum
The Hering Museum, inaugurated on November 22, 2010 is a multipurpose, creative, critical and modern space, combining the preservation of historical references with the concept of innovation. It is a place where the visit becomes observation and experimentation and is described with a lot of technology and interactivity. The aim is to build the idea of industrial heritage, understand and analyze the history of the textile industry in the Vale do Itajai and Blumenau, reflect about fashion, habits, and entrepreneurship.
Activities for the visitors to the Museum include aspects such as dynamism, technology and interactivity that the exhibition provides. In addition to basic level, intermediate and higher educational institutions, spontaneous visitors know a little more about the history of the family and the company throughout more than 130 years of history. By 2011, the Hering Museum had more than 9,000 visitors.
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SOCIAL REPORT | 2011
Hering Museum
Museum Interaction and Schools The objective of the exhibition is to provide integration with the public school. In 2011, more than 2500 students visited the location. Among the topics discussed during the visits are: Industrial Revolution, Architecture, Immigration, Fashion, Technological Evolution, History of the Company Hering, amongst others.
School Visits
Schools from other Cities Higher Education Schools in Blumenau
Municipal schools in Blumenau Private Schools in Blumenau
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SOCIAL REPORT | 2011
Hering Museum Teachers are also invited to visit the museum before the students so that in partnership with the internal team they can assess the issues to be discussed. On this anticipated visit the teacher can learn about the structure and educational activities for the pupils at the time of visit. The Museum offers several lines of research such as Economics, Administration, Engineering, Architecture, History, Anthropology, Sociology and others. This allows that the museum becomes an extension of the classroom.
Community The Museum is prepared to welcome families, youths, the elderly and spontaneous public in general, all have their space reserved at the Hering Museum. The visit is a day full of fun, culture and history. "Sunday at the Museum" (a project that is always on a Sunday of each month) includes workshops on various topics, exhibitions, theater and storytelling to liven up the weekend of families.
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SOCIAL REPORT | 2011
Hering Museum Date 15/05/2011
Sunday Workshops at the Museum • Inventing Fashion • Playing with music.
19/06/2011
57
• Once upon a time... • Puppet Theater: The old sea dog
24/07/2011
Public
64
• The art of origami • Moment: Sit, there is another story. 45
21/08/2011
• Recycle by playing • Showing of the short film «Fritz."
34
25/09/2011 • Customization • Presentation of the AMPE Choir ( Spring
21
Museum program). 30/10/2011 • Creative Puppet
20/11/2011
• Christmas Decorations.
Total public attendance at the workshops
16
23 260
Internal Indicators
Internal Indicators
Internal Indicators - Employees 2009
% of GS
2010
2011
% of GS
% of GS
Food
R$ 5.027.520
0,57%
R$ 7.269.423
0,59%
R$ 9.143.819,42
0,56%
Health
R$ 2.694.812
0,31%
R$ 3.585.159
0,29%
R$ 4.071.318
0,25%
R$ 3.052.133
0,35%
R$ 3.903.819
0,32%
R$ 4.778.939
0,29%
R$ 153.573
0,02%
R$ 278.854
0,02%
R$ 339.950
0,02%
R$ 863.940
0,10%
R$ 1.268.872
0,10%
R$ 1.268.872
0,11%
Daycare Help
R$ 100.924
0,01%
R$ 148.465
0,01%
R$ 185.269
0,01%
Private Pension
R$ 625.317
0,07%
R$ 627.012
0,05%
R$
0,07%
Employees Transport Teaching Help Training and professional development
699.198
Scheme
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SOCIAL REPORT | 2011
Internal Indicators
Workforce Indicators No. of people working in the company
2009 5.740
2010 7.939
2011 8.501
Number of new employees in the period
3.173
5.673
6.446
Number of dismissals and departures during the period
2.441
3.610
5.748
No. of people benefited with their first job
562
1.695
1.965
No. of trainees during the period
12
19
18
No. of illiterate people
1
No. of people over 45 years of age
854
1.028
1.189
Number of women working in the company
3.859
5.647
5.975
No. of blacks working in the company
79
111
181
No. of people with disabilities working in the company
87
99
90
6
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SOCIAL REPORT | 2011
Internal Indicators
External Indicators - Community 2009
% of GS*
2010
% of GS*
2011
% of GS*
Philanthropy/Donations/Offe rings
R$ 139.924
0,02%
R$ 1.080.097
0,09%
R$ 400.372,00
0,02%
Investment and incentives with the Volunteers/ Education/Training
R$ 7.100
0,00%
R$ 24.000
0,00%
R$ 70.400,00
0,00%
Investment in Sports
R$ 1.163.453
0,13%
R$ 1.551.870
0,13%
R$ 1.352.500
0,08%
Investment using the Incentive Laws
R$ 354.000
0,04%
R$ 1.389.708
0,11%
R$ 1.908.000
0,12%
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SOCIAL REPORT | 2011
Credits Coordination in Social Report Institutional Communication assessoria@hering.com.br
Photos
President Fabio Hering
Cia. Hering págs. 2, 3, 4, 5, 7, 8, 9, 10, 11, 16, 19, 20, 25, 46, 47, 48, 49, 51, 53, 55, 61, 62, 65, 66, 88.
Managing Director Carlos Tavares D’Amaral Manager of Institutional Communications Amélia Malheiros Coordinator of Institutional Communications Ligia Brandt Analyst Institutional Communication Bruna José Raimundo Layout and Design Manoella Antonieta Ramos da Silva
Campaigns / Catalogs págs., 6, 21, 22, 23, 24, 32, 59 Charles Steuk págs. 13, 73, 77, 85 Stock págs. 11, 12, 27, 39, 45 Disclosure págs. 33, 35
Cia. Hering Rua Hermann Hering, 1790 - Bom Retiro // CEP 89010-900 (47) 3321- 3544 // assessoria@hering.com.br Blumenau-SC // CNPJ: 78.876.950/0001-71 // www.ciahering.com.br