Presentation. Heritage São Paulo - SP

Transcription

1 Presentation Heritage São Paulo - SP

2 AGENDA Cyrela Overview; History; Strategic focus; Operational figures; Financial indicators; Portfolio. 2

3 AGENDA Cyrela Overview; History; Strategic focus; Operational figures; Financial indicators; Portfolio. 3

4 CYRELA AT A GLANCE Solid group with extensive experience in the industry Shareholders structure Leadership position in the industry More than 50 years of history ~ employees (construction + administrative) More than 200,000 clients Receivables R$ 3.9 billion (As of March, 2018) Free-float Founders Top Shareholders 65% 32% 14%* Geographical footprint (Launches) 1Q18 Rating 36.9% Rio de Janeiro 11% Middle West 26.0% 5% South 6% National Scale: braa- Global Scale: BB- Outlook: Negative. São Paulo 78% National Scale: Aa3.br Global Scale: Ba2 Outlook: Negative. * Free-float includes Top Shareholders 4

5 AGENDA Cyrela Overview; History; Strategic focus; Operational figures; Financial indicators; Portfolio. 5

6 Cyrela is founded as a land broker in São Paulo; SOLID TRACK RECORD Foundation Integration Expansion Consolidation 60 s 80 s and 90 s Vertical integration; Land broker Developer Cyrela becomes listed company. Expansion to Rio de Janeiro and other states; Cyrela s IPO; Spin-off of Properties Division ( Cyrela Commercial Properties); 1 st debenture offering (out of a serie of 6 debentures); 1 st receivables back securities (CRI s) offering (out of a serie of 8 CRI s); Launch of facebook sales channel; 6st debenture offering; 8 th CRI s emission. 6

7 CORPORATE GOVERNANCE & STRATEGY Strategy Organic growth Key internal process control Focus on profitability over growth Focus on key segments (income profile) Solid financial discipline Corporate Governance Stock option program Allow the company and its subsidiaries to attract and retain Eligible Persons Align shareholder interests 1 st homebuilder listed on Novo Mercado Ensure at least 25% of the total stock is available for trading Adopt public offer procedures that favor the shareholding dispersion Minimum standards for quarterly disclosure of information Internal committees in line with the best corporate governance and risk mitigation practices Well defined key business process Independent and strong board of directors Board of directors made up of at least 5 members At least 20% should be independent members Dividend payout: approximately 25% of its adjusted net income Clear internal politics Transparency Corporate governance practices, based on principles that privilege transparency Business management. Follow-up and accountability models are based on strict ethical principles 1 Source: Cyrela 7

8 CYRELA HIGHLIGHTS Leadership position in the industry and key markets 1 Fully integrated real estate company (from land acquisition to selling) 2 Exposure to all customer segments 3 Fully professionalized management team with deep industry 4 Solid balance sheet (largest real estate company in Brazil by market cap) 5 Expertise in designing innovative projects 6 Strong Brand: The most admired Real estate company 7 8

9 RECENTS AWARDS Cyrela by Pininfarina was the winner of the 2016 if Design Award in the Architecture and Interiors category. With 60 years of tradition, this german award is one of the most respected in the sector. In 2017, Cyrela won the 3rd place for Incorporating category and 4th place in Construction category for the Prêmio Top Imobiliário. The 2 nd best developer and homebuilder Winner in the category of Brand Communication with the Identidade Cyrela [Cyrela Identity] case, about the branding project the Company launched in 2013 Cyrela received the Top Employer Certification, given to the world s best employers, in Cyrela is in Valor Econômico newspaper s Anuário Inovação Brasil Ranking of Brazil s 100 most innovative companies. It ranks 4th in the Engineering, infrastructure and Logistics category, standing out for the implementation of processes to shorten deadlines, cut down on waste and increase productivity at work. 9

10 SUSTAINABILITY PRACTICES SOCIAL INITIATIVES Internal Objectives Examples os initiatives Improvement of well being of Cyrela workers and their families Eliminate illiteracy among Cyrela workers Increase family income through professional training for worker s wives Professional training for young relatives of workers External Objectives Examples os initiatives Positive impact in local communities Cyrela institute (vehicle for working with NGOs and developing programs) First professional experience for young adults from low income communities 10

11 SUSTAINABILITY PRACTICES ENVIRONMENTAL INITIATIVES Cyrela moves foward in defining integrated eco-efficient actions. Distinctive environmentally-friendly practices Eco-efficiency guidelines for projects: Selective waste collection Water-saving devices Collection of used batteries Individual water and gas meters Sustainable Production Environmental policy for suppliers Benchmark in waste management Recycling Program CarboboNeutro Program Power-saving devices Oil collection for recycling Optimization of resources Acessibility Sustainability and acessibility handbook Bicycle parking lot Waste management Technological development Nature-friendly construction 11

12 AGENDA Cyrela Overview; History; Strategic focus; Operational figures; Financial indicators; Portfolio. 12

13 BACK TO BASICS...PROCESS THAT STARTED IN 2010 Governance Commitees Processes and policies Back to Cyrela DNA Focus on mid to high-end products Living as a brand MCMV through Cury Back to Basics Company Longevity Leader s development Meritocracy Cyrela s cultura Financial Discipline Focus on margin Cost Culture Leverage Reduction Execution Cost control Systems and process improvement Corporate Engineering Bonus focus on deliveries 13

14 REDUCTION IN THE NUMBER OF JV S, KEEPING THE ONES THAT ARE IN LINE WITH CYRELA S STRATEGY Partnerships Startups Closing / Acquisition Final Position

15 SHIFT IN STRATEGY HAS ALREADY TRANSLATED INTO MORE ORGANIC OPERATIONS Company should keep working with partners on development Cyrela has been focusing on using own engineering 1 2 Cyrela s share in projects (%) Cyrela s share in construction site management (%) 1Q18 60% 1T18 97% % % % % % % % % % % % % % % % % % % % % 0% +20.0% +40.0% +60.0% +80.0% % 1 Share in projects launched 2 Cyrela + JV s 0% 20% 40% 60% 80% 100% 15

16 GROSS MARGIN 50,0% 33,3% 40,0% 29.9% 27,7% 30,0% 20,0% 10,0% Gross Margin Gross Margin EX Ret / Riserva Golf Cyrela expects the gross margin to grow in a sustainable pace going foward 16

17 MORTGAGE RATE INCREASE BRINGS MORE SALES CANCELLATION Example Assumptions: Loan-to-Value 80% (LTV) Unit value R$400,000 R$400,000 R$400,000 Interest Rate (TR+) 9% p.a +2.5% 11,5% p.a 9,5% p.a Loan term 35 years 35 years 35 years 1st installment - SAC R$ 3,068 R$ 3,678 R$ 3,126 Monthly Income R$ 12, % R$ 14,712-15% R$ 12,505 Income Comitment 25.0% 25.0% 25.0% For each 1% increase (decrease) in interest rate, the monthly income must rise (fall) by aproximately 8%. 17

18 RECOGNIZED BRANDS AND DIVERSIFIED PROTFOLIO JV s SP RJ SUL Financial strenght, credibility and entrepreneurship 18

19 THE WAY CYRELA PLAYS IN THE REAL ESTATE MARKET USING AN INTEGRATED BUSINESS PLATFORM Luxo / Alto Médio Econômico 19

20 AGENDA Cyrela Overview; History; Strategic focus; Operational figures; Financial indicators; Portfolio. 20

21 LANDBANK PSV of R$ 45.0 bn (100%) and R$ 40.0 bn (%CBR) in 1Q18. 75% of landbank acquired through swaps. Cyrela Landbank (100%) 1Q18 (R$ billion) Swap agreement Total Rio de Janeiro São Paulo South Others 21

22 OPERATIONAL HISTORY Launches - PSV (R$ billion) Launched units (thd.) % % % % Q Q18 Pre Sales - PSV (R$ billion) Direct employees % % % +236% 1,728 1,512 1,460 1,373 1, Q

23 CYRELA OPERATING RESULTS 6 projects launched in 1Q18, 39 in 2017, 32 in 2016 and 91 in 2015; 2.1 thd units sold in 1Q18, 10.2 thd in 2017, 8.7 thd in 2016 and 9 thd in Launches - R$ Billion Pre-Sales - R$ Billion T T18 Partners CBR 23

24 SALES Pre Sales - PSV (R$ billion) Sales per Region 1Q18 (R$ billion) Northeast North and Others South 4% 1% 3% % % Rio de Janeiro 24% 59% São Paulo % São Paulo - Other Cities T18 Sales speed* - 12M 27.2% 29.1% 29.1% 30.8% 32.7% 34.0% 35.2% 3Q16 * Considering the sales LTM 4Q16 1Q16 2Q16 3Q17 4Q17 1Q18 24

25 SALES BY VINTAGE Sales Speed of the last 12 months attained 35.2% in 1Q18. Sales by vintage of lauchings Sales by vintage of lauchings SoS 12M (R$ million) +17.9% 613 1Q17 18% 22% 7% 8% 3% 58% Q17 31% 16% 9% 3% 59% 3Q17 50% 20% 6% 76% Q17 44% 14% 59% 1Q18 29% 1Q17 1Q18 In 3 months In 9 months In 15 months Quarter s Launches In 6 months In 12 months Previous Quarters Launches Previous Years Launches 25

26 INVENTORIES R$ 5.9 billion of inventory (R$ 4.8 billion %CBR) in 1Q18. Inventories Market value (R$ MM) Inventories Delivery date 6,646 2,453 6,441 2,466 6,212 2,656 6,176 2,588 5,913 2,595 Inventory to be delivered Total Consolidation Equity Method Finished Months ,193 3,975 3,556 3,588 3, Months Months Months Total Q16 2Q17 3Q17 4Q17 1Q18 Finished Under Construction 26

27 TOTAL INVENTORY Change in Inventory Inventory Breakdown 1Q18 (R$ million) 6, % ,912.8 Others North South 1.9% 10.3% 5.7% Northeast 2.6% 35.2% São Paulo Rio de Janeiro 24.4% 20.0% São Paulo - Other Cities Inventory 4Q17 Sales of inventories Launches 1Q18 Sales of launches 1Q18 Price change Inventory 1Q18 Inventory under construction Finished inventory 27

28 FINISHED UNITS INVENTORY R$ 2,565 million of finished inventory in 1Q18 (vs. R$ 2,588 million in 4Q17). Finished Inventory Finished Units Breakdown 1Q18 (R$ million) 2, % Northeast Espírito Santo South São Paulo 0.9% , % 1.6% 18.9% Middle West North 1.8% 3.3% Minas Gerais 5.9% Rio de Janeiro 24.5% 28.6% São Paulo -Other Cities Finished Inventory 4Q16 Finished Inventory Sales Deliveries Price Change Finished Inventory 28

29 DELIVERED UNITS Units Delivered PSV Delivered (thd units) (R$ billion) High end Middle + MCMV , High end Middle + MCMV -4.7% 1,005 1, Q18 4Q17 1Q18 1Q thousand units delivered in 1Q18 in 13 projects. Middle + MCMV: 2.8 thousand units delivered in 10 projects in 4Q17. The units delivered in 1Q18 represent launches PSV of R$ 1.0 billion. 29

30 AGENDA Cyrela Overview; History; Strategic focus; Operational figures; Financial indicators; Portfolio. 30

31 FINANCIAL RESULTS Gross Revenue Gross Profit and Gross Margin (R$ million) (R$ million) Margin % -36% 695 Margin 27.1% 27.7% 30.9% % -37% Q17 1Q18 1Q17 (pro forma) 4Q17 1Q18 1Q17 (pro forma) Net Income and Net Margin (R$ million) Margin 6,0% 49 0,6% Q17 1Q18 1Q17 31

32 COVENANTS 0,07 0,07 0,00-0,03 TOTAL DEBT+ PROPERTIES PAYABLE - SFH DEBT - DISPOSALS EQUITY <= 0,80-0,09 11,66 7,32 9,33 3,58 4,24 6,09 RECEIVABLES + PROPERTY FOR SALE NET DEBT - PROPERTIES PAYABLE - UNRECOGNIZED COSTS AND EXPENSE >= 1.5 or <0 0,00 2, EBIT FINANCE COST S >= 1.5 or <0

33 RETURN ON EQUITY 1.6% -1.5% -1.9% -1.6% 1Q17 2Q17 3Q17 4Q17-2.6% 1Q18 Return on Equity (net income LTM / Average Shareholders Equity LTM ex - minorities) attained -2.6% 1Q18. 33

34 HEALTHY LIQUIDITY AND DEBT INDICATORS Debt (R$ million) 2.6 Corp. 1.0 Corp. 1.0 SFH 1.5 SFH Short 1.3 Long Indicators Net Debt/ Equity Average Cost Total Debt 16.8% Debt Ex-SFH W/o SFH: 102.0% CDI SFH: TR + 9.0% p.a. Gross Debt 4Q % Gross Debt 1Q18 Term Cash and Cash Equivalents Net Debt / Equity Net Debt Duration 1.4 year 1.0 year Short Term 59% 72% Long Term 41% 28% 32.8% 22.2% 25.1% 19.4% 16.8% Q18* 34 * CPC 48 (IFRS 9)

35 TRANSFERS, PAYOFFS AND TRUST OF DEEDS Volume Units (R$ million) +0.1% +16.1% (Thd. units) 8.0% 25.5% Q17 1Q18 4Q17 1Q17 1Q18 4Q17 Payoffs Trust of Deeds Transfers In 1Q18, the volume of transfers, payoffs and trust of deeds attained R$ 744 million, 1% higher than 1Q17 and 16% higher than 4Q17. * Previous periods are presented in pro forma way, considering MAC thru Equity Results.

36 BUSINESS, CASH FLOW AND ACCOUNTING CYCLES Business cycle 100% Accounting 70% Cash flow 0% (15%) Land swap or acquisition Cash Flow Consuption of 15% in case of acquisition Accounting Development months Low cash comsuption Launch 3% consumption due to marketing - - 3% of revenue - recognition Sales & Construction 36 months 5% cash recovery Recovery of 25% Revenues as percentage of completion method Delivery 3 12 months Final 70% of VGV 100% of revenues recognized 1 Source: Cyrela 2 Note: (1) Cycle I: In terms of % VGV of one project; Cycle II in terms of % revenues related to one project 36

37 CASH GENERATION* (R$ million) Q17 1Q18 1Q17 1Q18 Stake Acquisition Cash generation of R$ 184 million in 1Q18, vs. a cash generaton of R$ 245 million in 4Q17 and R$ 118 million in 1Q17. *Ex dividends, buyback and stake acquisition 37

38 AGENDA Cyrela Overview; History; Strategic focus; Operational figures; Financial indicators;; Portfolio. 38

39 MANDARIM SÃO PAULO (2006) The tallest residential building in latin america (2006); Ballroom on the 41st floor; First project with different typologies in the same building; 39

40 CIRAGAN SÃO PAULO (2007) First project to aggregate a residencial and a commercial tower in the same project 40

41 PARQUE ALFREDO VOLPI SÃO PAULO (2007) Very luxury product, with unit prices over US$ 5 mi 41

42 JK 1455 SÃO PAULO (2009) 42

43 LE PALAIS RIO DE JANEIRO (2010) Architecture inspired by two historical buildings in the complex; The historical buildings were restored and adapted for the leisure areas; 43

44 CENTRAL PARK MOOCA SÃO PAULO (2010) First mover in a industrial area of São Paulo (Mooca) Innovative product, creating a park inside the project All of its 560 units were sold in 10 days 44

45 LE PARC SALVADOR / BAHIA (2012) Largest Cyrela s project; 18 towers, units; PSV of R$ 1 billion (2013 value); In the middle of the project, there is a 10,000 sqmt leisure facility 45

46 RISERVA GOLF RIO DE JANEIRO (2014) Unique project in Barra da Tijuca; 2016 Olympics golf course; Average sqm. Price: from R$ 25 thd to R$ 30 thd. 46

47 CYRELA BY PININFARINA SÃO PAULO (2014) Unique project in São Paulo (Vila Olímpia); Price per sqm.: R$ 25 thd 47

48 ONE SIXTY SÃO PAULO(2015)

49 HERITAGE SÃO PAULO(2017)

50 CONTACT IR Cyrela Brazil Realty S.A. Empreendimentos e Participações Av. Brigadeiro Faria Lima, th Floor São Paulo - SP Brasil Zip Code Investor Relations Phone: (55 11) ri@cyrela.com.br Statements contained in this press release may contain information which is forward-looking and reflects management's current view and estimates of future economic circumstances, industry conditions, company performance and the financial results of Cyrela Brazil Realty. These are just projections and, as such, exclusively based on management's expectations of Cyrela Brazil Realty regarding future business and continuous access to capital to finance the Company's business plan. Such future considerations rely substantially on changes in market conditions, government rules, competitor's pressure, segment performance and the Brazilian economy, among other factors, in addition to the risks presented on the released documents filed by Cyrela Brazil Realty, and therefore can be modified without prior notice. 50