Investor Presentation 4Q16

Transcription

1 Investor Presentation 4Q16

2 1 Who we are? Largest mall company in Latin America The only shopping mall company in Brazil with nationwide presence Portfolio with 44 regional malls, almost 8% of the total malls in Brazil Largest landlord in Brazil with over 9,000 tenants, which represents almost 10% of the total number of stores in Brazil Current Owned GLA will grow 10.5% with the development projects by the end of 2021* Total Sales reached R$21.8 billion in 2016, 14% of the total sales in Brazil Plaza Niterói Shopping Tijuca Norte Shopping Shopping Villa Lobos * Growth considering the pipeline disclosed in the last Earnings Release.

3 2 BRMALLS Presence High quality potfolio, with large presence and regional scale MG/NE/North Region 26.1% of the company s NOI; 15 shopping centers in operation, including: Recife (PE); Center Uberlândia (MG); Rio Anil (MA). SP/Midwest Region 31.3% of the company s NOI; 14 shopping centers in operation, including: Villa Lobos (SP); Tamboré (SP); Campo Grande (MS). RJ/ES/South Region 42.6% of the company s NOI; 15 shopping centers in operation, including: NorteShopping (RJ); Plaza Niterói (RJ); Catuaí Londrina (PR).

4 3 Strength and Resiliency Brands (% of Base Rent) Segment (% of Satellites GLA) Brand 1 1.3% Women s Apparel Restaurant 6.6% 5.7% Brand 2 1.2% Fast-Food 4.9% Brand 3 1.1% Men s Apparel Shoes 4.4% 4.0% Brand 4 1.1% Mobile Store 2.8% Brand 5 1.0% Eletronics Cosmetics 2.5% 2.0% * Updated in jan/17.

5 4 BRMALLS Timeline ( ) NOI CAGR : +32.8% Adjusted EBITDA CAGR: +33.2% Total GLA Growth: % IPO R$657.1M Follow-On Follow-On Follow-On R$ 454.3M R$ 731.0M R$ 664.5M 6 shopping centers # Shoppings Total GLA (thousand m²) 23 Aquisitions 4 Aquisitions 1 Aquisition 3 Aquisitions 4 Aquisitions 4 Aquisitions 1 Greenfield 2 Greenfields 2 Greenfields 3 Greenfields 1 Greenfield 1 Greenfield m² m² 4 Expansions 2 Expansions 2 Expansions 2 Expansions 4 Expansions 3 Expansions 1 Asset Sale (*) 1 Asset Sale (*) 5 Assets Sale (*) m² 1,032.7 m² 1,197.1 m² 1,433.5 m² 1,620.6 m² 1,668.0 m² 1,691.0 m² m² m² m² m² m² m² m² 3 Expansions 1 Expansion 3 Assets Sale (*) 45 1,638.1 m² m² 45 1,645.7 m² +7.6 m² Note: Total GLA owned in thousand sqm. (*) Considering asset sales and acquisitions only of the malls in which the company divested its entire interest or added one more shopping center to the portfolio.

6 5 Largest and Best Company in the Sector BR MALLS is THE LARGEST shopping mall company in Latin America Current Total GLA (in thousand sqm) Total Sales 2016 (R$ million) 1, ,798 13,726 12,719 Current # of Malls EBITDA¹ 2016 (R$ million) 44 1, ¹ EBITDA disclosed by the companies

7 6 Largest and Best Company in the Sector THE FASTEST GROWING company in the sector with more than twice the average of our competitors Owned GLA CAGR - ( ) Net Revenues CAGR - ( ) 25.2% 10.7% 10.6% 31.1% 20.0% 16.1% Total GLA CAGR - ( ) 21.4% Adjusted EBITDA CAGR - ( ) 33.2% 7.8% 7.6% 21.9% 19.0%

8 7 Largest and Best Company in the Sector BRMALLS became THE MOST EFFICIENT player in the sector with the better margins EBITDA Margin ¹ Avg Historical EBITDA Margin BRMALLS BRMALLS Historical Average 79.0% NOI Margin ¹ Avg Historical NOI Margin BRMALLS 90.9% 2 BRMALLS Historical Average Note: ¹ Shopping Centers margins considering the last 3 years average. ² Iguatemi does not disclose NOI. Margin estimated by sell-side analysts in march/2017.

9 8 Largest and Best Company in the Sector BRMALLS is the company in the sector with the HIGHEST CORPORATE GOVERNANCE STANDARDS and free-float Average Daily Traded Volume (R$ million) ¹ Corporate Governance 2.7x the average ADTV of peers Full Corporation Corporate Governance: Novo Mercado No shareholders agreement and only one class of share Key employees aligned via stock option program Independent Board and Governance Committees BRMALLS Indexes BRMALLS Weight BRMALLS ranking # IBOVESPA IBRX50 ICO2 IBX IGC ITAG MLC IMOB MSCI BRAZIL 0.73% 0.75% 0.77% 0.66% 1.00% 0.89% 0.71% 20.10% 0.81% ¹Source: Bloomberg: 30 days median Updated March, 10th, 2017

10 9 Largest and Best Company in the Sector Currently trading at a significant spread over interest rates % 5.3% 0.7 p.p 4.6% 5.3% 1.8 p.p Nota: Yield FFO Ajustado = FFO Ajustado 24M Fwd / Enterprise Value Source: Bloomberg, December, 30 th, 2016

11 10 Largest and Best Company in the Sector... and at a large discount... Price +48.9% +47.8% +13.8% NAV Historical High Consensus* Last Price Updated March, 21st, PS: Consensus considers updates by sell-side analysts in NAV = fair value of investment properties of current malls net debt minority interest/ Number of Shares

12 11 Largest and Best Company in the Sector trading at multiples below historical average. P/FFO EV/EBITDA BRMALLS Historical Average BRMALLS Standard Deviation Source: J.P Morgan EBITDA and AFFO 2yr fwd

13 12 Growth Drivers: Acquisition Unique turnaround track record NOI of Acquisitions since 2006 (R$ mm) Acutal / Projected NOI 28.5% 22.7% 22.6% 18.8% 4.5% Projected Actual 21.5% Case Studies of Major Acquisitions (NOI Evolution R$ mm) Plaza Niterói Shopping Estação Campinas Shopping Shopping Tamboré % % % % Acquisition Price R$ MM Acquisition Price R$ MM Acquisition Price R$ MM Acquisition Price R$ MM

14 13 Growth Drivers: Acquisition We still see a great opportunity for acquisitions in Brazil. Market Share Ownership of Brazilian Shopping Malls Market Share (% of owned GLA in 2016) * Brazil Total GLA in 2016: 15,237 thousand sqm *Top 4 mall Players: BRMALLS, Multiplan, Aliansce and Iguatemi. Source: ABRASCE

15 Expansion Greenfield 14 Growth Drivers: Development (Projects Delivered) 2008/ Total 10 projects 21 projects Owned GLA ( 000 sqm)

16 15 Growth Drivers: Development Solid development history and the largest pipeline of greenfield and expansions projects of the industry Owned GLA (in thousand sqm) Already developed (Owned GLA) Pipeline (Owned GLA) % of the Owned GLA Capex (R$ mm) 1, ¹ ¹ 189.4¹ 271.8¹ 2,846.9 ¹ Considers only CAPEX of announced projects

17 16 Growth Drivers: Organic Growth Solid Growth in the last 10 years Same Store Sales Annual Growth (%) Quarterly Growth (%) Same Store Rent Same Store Sales (%) GDP(%) Annual Growth (%) Quarterly Growth (%) Same Store Rent (%)

18 17 Strength and Resiliency BRMALLS SHOPPING CENTERS RESILIENCE Retail Sales Y.o.Y. Growth/Shoppings/BRMALLS Market Share BRMALLS: % 14.9% 13.8% Shopping Centers historically outperform retail sector *Source: Shopping Center Sales ABRASCE; Retail Sales - IBGE

19 18 Financial Highlights Net Revenues CAGR - ( ) Gross Revenues Breakdown (4Q16) CAGR 31.1%

20 19 Largest and Best Company in the Sector With a strong and consistent growth of the main metrics NOI (R$ million) Adjusted EBITDA (R$ million) CAGR 32.7% CAGR 33.2%

21 20 Capital Structure 4Q16 Debt Index (% of the gross debt) Cash R$383.2 million Average Yield 102.9% Gross Debt Average Debt Duration R$4.8 billion 11.3 years Average Debt Cost 11.0% Net Debt Net Debt / Annualized Adjusted EBITDA Net Debt / Annualized Adjusted EBITDA (ex-perps) R$4.4 billion 3.7x 2.7x Rating Moody s: Fitch: Aa2 / Ba2 AA+ / BB+ Debt Amortization Schedule (R$ million) - Adjusted Financial Information 1, and onwards* *Including the Perpetual Bond

22 21 Stabilized Result Full Year 2016 (R$ MM) Stabilized Result (R$ MM) Net Revenues R$ 1,370 (1) Discounts: +37MM (2) Vacancy: +16MM R$ 1, % Adjusted EBITDA R$ 1,016 (1) PDA: +80MM R$ 1, % Adjusted EBITDA Margin 74.2% 80.8% +660bps AFFO R$ 299 (3) Financial Result: +77MM (4) Taxes: +48MM R$ % AFFO Margin 21.8% 39.2% +1740bps Total of R$259 million Note: (1) Full Year 2016 vs. historical average % over net revenues (2) Full Year 2016 vs. stabilized occupancy of 97,5% (3) Financial result upside based on estimates for the main indexes (Brazilian Central Bank FOCUS Report, March, 2017) (4) Tax upside based on Corporate restructuring Project estimates

23 22 Appendix

24 23 Income Class Pyramid Evolution Population Distribution by Income Class (millions of people) Growth +7m Growth +11m Growth +29m Growth +18m A Class: over R$9,050 B Class: R$6,941 R$9,050 C Class: R$1,610 R$6,941 D Class: R$1,008 R$1,610 E Class: under R$1,008 A & B Class C Class D & E Class Source: Political Sciences Center at FGV-Rio

25 24 Shopping Mall: A Safe Harbor Sales Performance in the Shopping Mall Sector since1995 Average Inflation ( ): +6.6% Average GDP Growth ( ): +2.3% Sales CAGR ( ): +14.0% Mexican Crisis (1994) & Asian Crisis (1997) Russian Crisis (1998) & Real Depreciation (1999) 2002 Crisis Lula Election Subprime Crisis ( ) European Crisis ( ) Car Wash Crisis ( ) Avg. GDP Growth (95-97): 2.9% Avg. GDP Growth (98-00): 1.8% Avg. GDP Growth (03-05): 3.0% Avg. GDP Growth (08-09): 3.2% Avg. GDP Growth (11-12): 2.5% Avg. GDP Growth (14-16): -2.4% Avg. Inflation (95-97): 7.4% Avg. Inflation (98-00): 5.5% Avg. Inflation (03-05): 7.5% Avg. Inflation (08-09): 5.1% Avg. Inflation (11-12): 5.8% Avg. Inflation (14-16): 7.1% Avg. Interest Rate (95-97): 35.5% Avg. Interest Rate (98-00): 21.3% Avg. Interest Rate (03-05): 17.4% Avg. Interest Rate (08-09):11.2% Avg. Interest Rate (11-12): 9.1% Avg. Interest Rate (14-16): 14.2% Sales Growth CAGR (95-97): 18.3% Sales Growth CAGR (98-00): 20% Sales Growth CAGR (03-05): 12.4% Sales Growth (08-09): 14.6% Sales Growth (11-12): 10.6% Sales Growth (14-16): 5.4% Source: IPEA Data e ABRASCE

26 25 IBOVESPA vs. GDP YoY (%) Jan/91 - Jul/97: 6 years and 5 months Jul/97 - Out/02: 5 years and 3 months Out/02 - Mar/10: 7 years and 5 months Mar/10 - Today 8.0% % 4.0% 5.9% 4.2% 3.7% 4.5% 5.3% 6.1% 4.8% 6.5% 5.3% 5.8% 2.0% 0.0% -2.0% 2.5% 2.1% 2.2% 2.1% 2.3% 2.1% 0.7% 0.9% 0.1% % -1.4% -4.0% -3.7% -3.6% -6.0% 0.0 GDP numbers from 2014 onwards consider new methodology (comparable value for 2014 was -0.25%)

27 26 BRMALLS and Long Term Interest Rates Historical Stock Price vs. Fwd Real Rate LTM Performance Correlation w/ Fwd Interest Rates Highest Liquidity in the Sector (2.7x Avg Peers) BRML3 22.4% -82% PEERS¹ 26.2% -30% Fwd Interest Rate -57.5% Largest Foreign Shareholder Base (~75%) Highest weight of the sector on Ibovespa Index (0.73%) Net Debt / EBITDA 3.7x 1- MULT3, IGTA3 e ALSC3 Updated on March, 24 th, 2017

28 27 BRMALLS vs. International Peers EV/EBITDA 2017E vs. International Peers 12.9x 15.5x 13.7x 10.7x 18.0x 13.9x 9.9x 25.4x 20.7x 17.6x 22.5x 20.8x 15.1x 25.0x 22.1x 23.3x 13.2x 22.1x 22.2x 24.8x Updated in march/2017 Source for International Peers: Bloomberg Source for national Peers: sell-side analysts estimates

29 28 Shopping Mall Industry Brazilian Mall industry offers strong potential for growth and expansion GLA per 1,000 inhabitants (sqm) % of Retail Sales in Shopping Malls USA Canada Australia South Africal France Mexico Brazil Canada USA South Australia France Mexico Brazil Africal Source: Abrasce, 2015

30 29 IR Contacts Frederico Villa CFO Telefone: Derek Tang IR Manager Telefone: Renato Campos Specialist Telefone: Guilherme Lahr Specialist Telefone:

31 30 Disclaimer The material that follows is a presentation of general background information about BR Malls Participações S.A. and its consolidated subsidiaries ( BR Malls" or the "Company") as of the date of the presentation. It is information in summary form and does not purport to be complete and is not intended to be relied upon as advice to potential investors. You should consult the offering memorandum for complete information about the transaction and base your investment decision on such offering memorandum. No representations or warranties, express or implied, are made as to, and no reliance should be placed on, the accuracy, fairness or completeness of the information presented or contained in this presentation. Neither the Company nor any of its affiliates, advisers or representatives, accepts any responsibility whatsoever for any loss or damage arising from any information presented or contained in this presentation. The information presented orcontained in this presentation iscurrent asof the date hereof and is subject to change without notice and its accuracy isnot guaranteed. Neither the Company nor any of its affiliates, advisers or representatives make any undertaking to update any such information subsequent to the date hereof. This presentation should not be construed as legal, tax, investment or other advice. Certain data in this presentation was obtained from various external data sources, and the Company has not verified such data with independent sources. Accordingly, the Company makes no representations as to the accuracy or completeness of that data, and such data involves risks and uncertainties and is subject to change based on various factors. This presentation is strictly confidential and may not be disclosed to any other person. This presentation contains forward-looking statements. Such statements are not statements of historical facts, and reflect the beliefs and expectations of BR Malls management. The words "anticipates", "wishes", "expects", "estimates", "intends", "forecasts", "plans", "predicts", "projects", "targets" and similar words are intended to identify these statements. Although the Company believes that expectations and assumptions reflected in the forward-looking statements are reasonable based on information currently available to the Company's management, the Company cannot guarantee future results or events. You are cautioned not to rely on forward-looking statements as actual results could differ materially from those expressed or implied in the forwardlooking statements. Securities may not be offered or sold in the United States unless they are registered or exempt from registration under the U.S. Securities Act of 1933, as amended (the Securities Act ). Any offering of securities to be made will be made solely by means of an offering circular. This presentation does not constitute an offer, or invitation, or solicitation of an offer, to subscribe for or purchase any securities, and neither any part of this presentation nor any information or statement contained therein shall form the basis of or be relied upon in connection with any contract or commitment whatsoever. Any decision to purchase securities in any offering of securities of the Company should be made solely on the basis of the information contained in the offering document which may be published or distributed in due course in connection with any offering of securities of the Company, if any. This presentation is being made only to investors that, by means of their attendance at this presentation, represent to the underwriters and the agents that they are Qualified Institutional Buyers as that term is defined in the Securities Act.