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SARAIVA S.A. LIVREIROS EDITORES

Publicly-held company

Corporate Taxpayer’s ID (CNPJ) 60.500.139/0001-26

NOTICE TO THE MARKET

Saraiva S.A. Livreiros Editores ("Saraiva") hereby announces to its shareholders and investors, as well as the market in general, in continuation of its Notice to the Market released on September 22, 2014, that it held, on September 23, 2014, negotiations with the National Fund for Educational Development ("FNDE") to establish the value of the sales contract that will be made by Saraiva under the 2015 National Textbook Program ("PNLD", "Program").

The textbook purchasing cycle under the National Textbooks Program (PNLD) is held in a 3 year cycle, separated in three groups of school years: Elementary I (1st to 5th), Elementary II (6th to 9th) and High School. The 2015 program that take place this year, with new adoptions aimed at high school, includes the purchase of textbooks (type 2), digital content (type 1 - e-books and digital objects) and MEC Daisy content.

As a result, Saraiva’s sales of physical books under the 2015 PNLD will total R$ 154.0 million. This amount includes textbooks and content in MEC Daisy format. The sales of digital content will be held on a date to be further informed by the FNDE.

Saraiva estimates a total market for new adoptions of approximately 83 versus 92 books in the program reference PNLD 2012. The reduction of the Program is related to the exclusion of EJA (young adults), that currently has an exclusive National Textbook Program (PLND-EJA).

As disclosed in the Market Notice published on June 18, 2014, Saraiva was able to approve 74% of the book collections (17 books approved out of 23) submitted to the PNLD/2015. This number compares to 66% in the comparable PNLD program, in 2012.

Despite the positive result on the preliminary approval by the Department of Basic Education, directed by the Ministry of Education (MEC), the results of the PNLD market in 2015 shows a more fragmented market. The market share of the four leading publishers of educational content fell to 67% under PNLD 2012 from 86% in the PNLD 2012. Furthermore, it is worth mentioning that the comparison with reference program PNLD 2012 was impacted, since this year, there was no approval of the collection of English submitted by Saraiva.

As a result Saraiva market share was 15.0% in the PNLD 2015 versus 24.6% in the reference program (PNLD 2012). Considering only the subjects that Saraiva was able to approve by MEC (Biology, Mathematics, Portuguese, History, Geography, Physics, Sociology and Philosophy) market share was 21.0%.

We also hereby announce that the production and delivery of all of the contracted items will take place in the coming months. We estimate that a majority of the contract amount will be billed during fiscal year 2014.

Click here, to access the PDF version.

São Paulo, September 24, 2014.

JORGE SARAIVA NETO
CEO and Investor Relations Officer

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