The big Brazilian shoe company anticipates a slowdown in its export growth in the coming years as it faces adverse exchange rates and focuses on recovering its margin levels, which have been eroded by foreign sales. Grendene does not rule out that its exports may even decline in 2011 in terms of volume.

On the other hand, it expects to benefit from ongoing growth in Brazil, where the annual consumption of footwear is forecast to reach about 1 billion pairs in four to five years' time compared with an estimated 858 million pairs in 2010.

In the past year, Grendene's gross sales rose by 9.9 percent to R$1.999 billion (€871.7m-$1,205.9m), in line with its average annual growth since 2006, but domestic sales increased by 9.5 percent to R$1.604 billion (€699.5m-$967.6m), compared with an annual growth of 8.2 percent since 2006, whereas exports were up by 11.2 percent to R$394.8 million (€172.2m-$238.2m), against a yearly rise of 17.9 percent since 2006.

Grendene's share of Brazilian shoe exports remained unchanged at 38 percent of the total volume in 2010 compared with 2009. In dollar terms, the company's share rose to 15.1 percent from 13.1 percent.

After deducting returns, sales taxes and client discounts, Grendene's full-year sales totaled R$1.605 billion (€699.9m-$968.2m), up by 10.2 percent from the previous year. Costs per pair rose by 4.7 percent to R$5.62. The gross margin increased to 40.6 percent from 38.9 percent in 2009, but remained far from the 45.1 percent rate achieved back in 2006.

The gross margin suffered in fact from increased exports, which represented 19.8 percent of revenues in 2010 against 14.9 percent in 2006. Because of unfavorable exchange rates, Grendene's average export prices only rose by 2.7 percent per annum between 2006 and 2010, putting pressure on margins.

The operating margin rose to 13.2 percent last year from 10.4 percent in 2009 and net profit surged by 14.8 percent to R$312.4 million (€136.2m-$188.5m). Grendene's net cash pile rose by 28.4 percent to R$852.5 million (€371.7m-$514.3m).