EBITDA up 10.9% YoY, reaching R$ 504 million in 2015 Short-term guidance reached

Transcription

1 EBITDA up 10.9% YoY, reaching R$ 504 million in 2015 Short-term guidance reached São Paulo, March 8th, 2016 Iguatemi Empresa de Shopping Centers S.A. (IGUATEMI) [Bovespa: IGTA3], one of the largest full-service companies in the Brazilian shopping mall sector, reports results for fourth quarter 2015 (4Q15). Financial and operational information is based on the consolidated figures, in R$ 000, under the Brazilian Corporate Law accounting legislation and IFRS, as expressed in Accounting Pronouncements approved by the Brazilian Securities Commission (CVM) except in relation to Iguatemi interest in the JK Iguatemi mall in São Paulo, of 50% up to March 31, 2014, and of 64% as from April 1, 2014, which is reflected, in this reporting, in the Company s complementary Independent Management Reporting format so as to better represent the Company s results. The reconciliation between the consolidated statements and the Independent Management Reporting information is in the Appendices section. Non-accounting figures have not been reviewed by the external auditors. Conference Calls on 4Q15 Results 4Q15 HEADLINES Portuguese Conference Call March 9th, a.m. (Brasília time) 8 a.m. (US EST) Tel.: +55 (11) Password: Iguatemi Replay: +55 (11) Password: Iguatemi Available for 7 days English Conference Call March 9th, a.m. (Brasília time) 9 a.m. (US EST) Tel.: +1(412) Password: Iguatemi Replay: +1(412) Passcode: Available for 7 days IR Team: Cristina Betts, CFO and IRO Gunther Schrappe, Strategy, Innovation and IR Director Carina Carreira, RI Elisa Manzato, RI Tel.: +55 (11) /6872 ri@iguatemi.com.br Year-end EBITDA reached R$ 504 million (within the implicit EBITDA guided for 2015), with an EBITDA Margin of 79%. 4Q15 EBITDA reached R$ 144 million with an 84% EBITDA Margin Total Sales were R$ 3.8 billion in 4Q15 and R$ 11.9 billion in 2015, a 15% increase versus 4Q14 and a 12% increase in the year (+5.8% in the quarter and +7.4% in the year, excluding the acquisition of Pátio Higienópolis) Same-area sales (SAS) were up 5.2% in 4Q15 and 5.8% in 2015, above same-store sales (SSS) of 4.2% in the quarter and 5.5% in the year, outperforming the other listed companies in the sector Same-store rent (SSR) was up 6.9% in 4Q15 and 6.8% in 2015, and same-area rent (SAR) was up 7.1% in the quarter and 6.8% in the year Net revenues reached R$ 172 million in 4Q15 (+3% YoY) and R$ 637 million in 2015 (+8% YoY) Net profit reached R$ 42 million in 4Q15 and R$ 194 million in 2015 FFO reached R$ 69 million in 4Q15 and R$ 296 million in 2015 Acquisition, on October 1 st 2015, of an 8.4% stake in Pátio Higienópolis. With this acquisition, Iguatemi now holds a 11.2% stake in this mall PSV swap, on October 1 st 2015, with a guaranteed minimum value of R$ 12.4 million, for the construction of one hotel tower in the Galleria mall Complex Issuance of R$ 105 million in securitization of Real Estate Receivables (CRI), on December 29 th 2015, placed with a final rate of CDI % p.a. (all in) and total term of 19 years

2 MESSAGE FROM MANAGEMENT Our discipline in maintaining a coherent and assertive strategy, focused on having the best assets in the best locations and targeted to the highest income groups, made it possible for Iguatemi to once again deliver results that were: (i) better than the sector average; and (ii) within the Company s short-term guidance. Our EBITDA at R$ 504 million (up 11% from 2015) was within the implicit EBITDA indicated by our guidance for net revenue growth and EBITDA margin given at the end of Iguatemi has an important track record of promising and delivering its guidance. Since 2008, we have made commitments to short term guidance (as well as long-term guidance, ~5 years, which we gave in 2009) and we have consistently delivered these results, year after year. The delivery of one more short term guidance, especially in a year with a challenging macroeconomic context and in which we had to postpone the expansion of the Iguatemi Porto Alegre mall, emphasizes our commitment to the investor market and demonstrates Iguatemi s planning and delivery capacity Guidance Real Guidance Real Guidance Real Guidance Real Guidance Real Guidance Real Guidance Real Net Revenues Growth 9 12% 14.5% 15-17% 21.2% 25 30% 25.0% 25-30% 24.6% (1) 15 20% 13.0% (3) N/A 27.1% 12-15% 8.1% (5) EBITDA Margin ~70% 69.7% 70-72% 70.1% 70-72% 71.3% ~70% 72.5% (2) 70-72% 75% 72-75% 77% 76-79% 79% EBITDA (R$ mn) N/A 151 N/A 203 N/A 235 N/A 298 N/A (4) 504 Dividends (R$/share) PSV swaps (R$ mn) N/A 0.32 N/A 0.37 N/A 0.38 N/A 0.40 N/A N/A 0.34 N/A N/A N/A N/A N/A N/A N/A 19.2 (1) Iguatemi s Net Revenues would have grown 27.7% in 2012 if Boulevard Rio Iguatemi had not been sold. Alternatively, Iguatemi s Net Revenues grew 28.7% in 2012 if we exclude the Net Revenues of Boulevard Iguatemi in 2011 and (2) Adjusted EBITDA margin (and growth in adjusted EBITDA) leave out of account other operational revenues of R$ 108.2mn, relating to the sale of Boulevard Rio Iguatemi. (3) Iguatemi met the implicit EBITDA figure indicated by the guidance given for net revenues growth and EBITDA margin (implicit guidance of R$ mn vs. actual EBITDA of R$ 347.8mn). (4) Implicit EBITDA associated with the guidance of Net Revenues growth and EBITDA Margin. (5) Net revenues growth was 8% as per the postponement of Iguatemi Porto Alegre expansion to April 2016 (originally expected for September 2015) AND 4Q15 HIGHLIGHTS Our results for 4Q15 and 2015 once again show the resilience of the company s portfolio, even in an adverse macro context. For 2015, we report net revenues of R$ 637 million, EBITDA of R$ 504 million (up 8% and 11%, respectively) and EBITDA margin of 79%. For 4Q15, we report net revenues of R$ 172 million, EBITDA of R$ 144 million (up 3.3% and 0.6%, respectively), and EBITDA margin of 84%. Our total sales in 2015 were R$ 11.9 billion, up 12% from In the fourth quarter total sales were R$ 3.8 million, up 15% from This growth is mainly due to (i) the quality of our projects, which continue to grow in spite of the economic crisis; (ii) maturation of our greenfields and expansions inaugurated in recent years; (iii) densification of the 2

3 immediate area surrounding the malls; and (iv) the purchase of an equity interest in Pátio Higienópolis mall, which was not in the portfolio in 2014 (excluding this acquisition, total sales were up 5.8% YoY in 4Q15, and 7.4% in the year). Over recent years, sales in shopping malls have increased as a percentage of total Brazilian retail sales. We believe this is a trend that will continue for the coming years not only due to an increase in the number of malls, but also due to retail migration, especially high-income retail, from streets to shopping malls. We expect this trend, allied to a movement from retailers towards restructuring their store network, focusing on more productive / high-end locations, will strengthen our position as a preferential sales channel to the consumer. In 2015 we report same-store sales (SSS) growth of 5.5% YoY, and same-area sales (SAS) growth of 5.8%. In the quarter, SSS was up 4.2% YoY, and SAS up 5.2% YoY outperforming other listed companies in the sector which we perceive as a demonstration of the resilience of our portfolio. The retail sectors that performed best in the period were entertainment, jewelry, health&beauty and the high-end international stores; the least successful performance was household appliances. Same-store rentals (SSR) were up 6.9% in 4Q, and 6.8% in 2015; same-area rentals (SAR) were up 7.1% in 4Q, and 6.8% in the year. The occupancy rate for our malls was 94.0% in 4Q15 and 94.6% in 2015 (it is important to note that our vacancy numbers include temporary rentals, i.e., contracts signed for less than four years are not considered in the occupancy rate). Furthermore, we reduced the net delinquency rate by 0.7 p.p., to 1.1% in 4Q15. Rental revenues (at 100%) for our malls was up 16.8% YoY, at R$ 273 million in 4Q15. Parking revenues (at 100%) for our malls was up 43.4% YoY, at R$ 64 million. The increase in rental and parking revenues were mainly due to: (i) maturation of the malls we have opened in recent years; (ii) acquisition of Pátio Higienópolis mall, which was not part of the portfolio in 2014; and (iii) increases in the flow of vehicles and adjustments in the parking tariffs. Excluding Pátio Higienópolis acquisition, rental revenues for all malls were up 5.9%, and parking revenues up 33%. Openings and acquisitions: In 2015 we opened two expansion projects and acquired 11.2% of Pátio Higienópolis mall. In April 2015 we opened the expansion of Iguatemi Campinas, adding 19,200 sqm of GLA to the mall. The complex now has a total GLA of 105,900 sqm (73,500 sqm excluding Boulevard Iguatemi, adjacent to the mall), and became the largest mall, in terms of GLA, in our portfolio. The expansion opened with 90% of its GLA leased and introduced several new brands into the Campinas region (such as Zara Home, GAP, Sephora, Diesel, The North Face, New Balance, Kiehl s, Michael Kors, Coco Bambu, PF Chang s, Johnny Rockets, Abbraccio, etc.). This expansion has presented an accentuated maturation curve: already in the first six months of operation, gross revenue growth was very similar to the GLA growth. 3

4 In 3Q15, we opened the expansion of Iguatemi São Paulo and finalized the revitalization of the Main Plaza, adding 1,188 sqm of GLA and refreshing the image of this mall, which is our flagship mall and the most important mall in Latin America. With the expansion we opened three new flagship stores of important international brands (Piselli, Cartier, Dolce&Gabbana and Saint Laurent). Additionally, in April 2016 we will open the first Polo Ralph Lauren operation in Brazil. These new operations further strengthen the mix of stores of the complex. On October 1 st, 2015, Iguatemi acquired, for R$ 125 million, from Fundação Conrado Wessel, a direct stake of 8.4% in Pátio Higienópolis mall. This acquisition, added to the first equity stake acquired on July 2016, takes Iguatemi s total interest in Pátio Higienópolis to 11.2% (the last installment of this acquisition - R$ 50.0 million - was paid, corrected by the CDI rate, as a subsequent event on February 25 th, 2016). 4

5 Costs and expense reductions: For the second consecutive year, we managed to deliver lower expenses YoY in nominal terms. As a result of (i) automation and process improvements, (ii) centralization of operations (for example, our shared services facility), and (ii) the implementation of a zero-based/matrix budgeting system, we were able to decrease our expenses by 11.9% per year from 2013 to In 2015, we reduced our expenses by 4.4%, while our net revenues rose 8.1%, which contributed to the increase in our EBITDA margin (84% in the 4 th quarter and 79% in the year). Other operational revenues and expenses: We signed two contracts for PSV swaps: (i) in 3Q15, for a residential tower in the Iguatemi Esplanada complex - guaranteed minimum value of R$ 6.78 million; and (ii) in 4Q15, for a hotel tower in the Galleria Shopping complex - guaranteed minimum value of R$ 12.4 million. These towers are part of the densification strategy of the areas surrounding our malls, through the creation of large multi-use complexes, which increase the occupation and flow of people in our projects. Galleria Our Net Debt increased 4.5% in 4Q15 to R$ 1.7 billion, and the Net Debt/ EBITDA ratio reached 3.35x. Iguatemi s Cash Position declined 6.5% to R$ 393 million at the end of 4Q15, compared to 3Q15, mainly as a result of the payment of the first installment of the acquisition of the Pátio Higienópolis mall. In 2015 we issued two Securitization of Real Estate Receivables (CRIs): (i) in 3Q15, for R$ 210 million, with a final rate of CDI +0.15% p.a., maturity at 10 years and a 4-year grace period; and (ii) in 4Q15, for R$ 105 million, with a final rate of CDI +1.30% p.a. (all in), maturity at 19 years and an average term of 12 years. This second placement was made in two payouts: (i) R$ 35 million on December 29 th, 2015, and (ii) R$ 70 million on January 4 th, These instruments allowed for an increase in the average tenor of the debt to 4.5 years, while still maintaining our all in cost of debt below CDI (currently at 94.8% of the CDI). 5

6 EXPECTATIONS FOR THE NEXT YEARS AND GUIDANCE FOR 2016 Our present strategy de-prioritizes the development of new greenfields as the retail sector currently has less appetite to grow through new projects. Our current focus is on (i) reduction of costs and expenses; (ii) deleveraging the Company; (iii) maturation of the malls opened in recent years; (iv) densification of the areas surrounding our malls; and (v) selective acquisitions. Cost and Expense Reductions: Iguatemi anticipated the challenges related to the growth cycle since its IPO by training its human capital and perfecting its systems and processes. We are now reaping the benefits of the improvements implemented in the last years, being able to reduce our administrative expenses by 11.9% per year since In 2016 we expect to continue reducing expenses in nominal terms, mainly through: (i) continuous improvement of our processes; and (ii) reduction of ~10% in the administrative staff (initiated in December 2015). Expenses (R$ million) (1) (1) Does not consider Depreciation and Amortization expenses. Deleveraging: In 2016 we will complete the current expansion cycle, with two projects planned to open in the 1 st half of the year an expansion and a commercial tower, both in the Iguatemi Porto Alegre mall (adding 24,200 sqm to Iguatemi s owned GLA). We continue to develop premium outlets, which demand less capital (lower construction costs per square meter). There are three outlets in our projects pipeline, in the states of Santa Catarina, Paraná and Minas Gerais, which will add 45,000 sqm of owned GLA to the Iguatemi portfolio by the end of With the end of the current expansion cycle, we expect to reduce the short term capex requirements, and reduce the company s net debt position. Investments (R$ million) E (1) (1) Includes capex for (i) maintenance/reinvestment, (ii) expansions (Iguatemi Porto Alegre mall and tower), (iii) outlets, and (iv) the 2 nd installment of the acquisition of Pátio Higienópolis mall (~R$ 50 mn). 6

7 Maturation of new developments: In the medium term, with improvements in the macro scenario, we expect greenfields and expansion projects to resume their importance. For the short term, we are confident that we will capture positive results from the projects that have been opened in recent years. At present, an important part of our GLA is in greenfield projects that opened in the last three years. The operations of these malls are already stable, but they are still at the beginning of their maturation process. While they represent 20.7% of our own GLA, they still represent only 7.1% of our revenues, and thus, in the short and medium term they should help us grow at a faster pace. (1) Includes Minimum Rental + Overage + Temporary Rent and Parking. Densification of the areas surrounding our malls: In the medium to long term, we expect our landbank to contribute to the company s growth. This landbank approximately 1.0 million square meters (281,000 sqm of GLA and 757,000 sqm of private area / real estate) is important, as it indicates Iguatemi s growth / expansion potential (in addition to new greenfields, outlets and acquisitions that we expect to announce in coming years). This growth / expansion will be captured through the densification of the areas surrounding our malls - creating large multiuse complexes that have strong synergy with the retail operations already present in our malls. Since 2010 we have negotiated 20 PSV swaps for the construction of commercial, residential and hotel towers adjacent to our projects. As an illustration, the image below shows the swaps made at Iguatemi Rio Preto. As noted above, similar dynamics have been implemented in almost all our projects. 7

8 In 2015 four towers were inaugurated (ready to be occupied) at Praia de Belas mall, and one commercial tower at Iguatemi Esplanada complex. In 2016, we expect to inaugurate three residential towers, one commercial tower and a Hyatt Place Hotel in the area surrounding the Iguatemi Rio Preto mall. Furthermore, we observe a strong densification process (either complete or in process) on the area surrounding several of our malls, as can be seen in JK Iguatemi, Market Place and Iguatemi Porto Alegre. At JK Iguatemi, for example, more than 4 towers are being occupied in In the first half of the year, the most sophisticated and modern theater in Brazil is also being inaugurated adjacent to the mall, which will contribute with visitor flows at the mall in the evenings and weekends. We expect this densification will allow our malls to grow faster than the average of the market in the short and medium terms. Selective acquisitions: Deleveraging will create space in the balance sheet for selective acquisitions. Since its IPO in 2007, Iguatemi acquired several stakes in a consistent and constant pace. In total, we acquired 20 stakes in assets we already owned and 4 stakes in malls new to the portfolio. We intend to continue to make such acquisitions, especially in assets we already own. Iguatemi currently owns an average 62% stake in the assets it operates: in these, there is up to 274,000 sqm of GLA to be acquired. 8

9 Short-term Guidance: As we have done every year since 2008, we are announcing a short-term guidance for net revenue growth and for EBITDA margin. In spite of the adverse macro-economic situation, we believe our net revenues will grow between 5% and 10% in 2016; and we expect our 2016 EBITDA margin to be between 73% and 77%. Our expectation for EBITDA margin is slightly lower than in 2015 because, in spite of additional efforts to cut expenses in 2016, we expect to have significantly lower other operational revenues (mainly results from PSVs and resales of commercial locations) in 2016 when compared to other recent years. Guidance 2016 Net Revenues Growth 5 10% EBITDA Margin 73 77% We believe that Iguatemi, with its quality portfolio and its solid balance sheet, is well-positioned to face the challenges of the coming years. We will continue to invest in our existing assets, updating the mix, creating a distinctive consumer experience, and seeking new opportunities for good investment. Carlos Jereissati Filho CEO, Iguatemi Empresa de Shopping Centers S.A. 9

10 MAIN INDICATORS The Company s Management Reporting, based on the consolidated financial statements, has been prepared to reflect Iguatemi s investment in all the malls, including the equity stake held in JK Iguatemi which was 50% up to March 31st, 2014 and was 64% as of April 1st, Financial indicators 4T15 4T14 Var Var. Gross Revenues (R$ 000) 196, , % 715, , % Net Revenues (R$ 000) 172, , % 637, , % EBITDA (R$ 000) 144, , % 503, , % EBITDA Margin 83.7% 86.0% -2.3 p.p. 79.1% 77.1% 2.0 p.p. FFO (R$ 000) 69,493 89, % % FFO Margin 40.4% 53.6% p.p. 46.5% 54.0% -7.4 p.p. Net Profit 42,186 65, % % Performance indicators 4T15 4T14 Var Var. Total GLA (sqm) 714, , % 714, , % Owned GLA (sqm) 443, , % 443, , % Average Owned GLA (sqm) 437, , % 431, , % Total GLA, malls 681, , % 681, , % Owned GLA, malls 411, , % 411, , % Number of malls % % Total sales (R$ 000) 3,793,593 3,299, % 11,850,850 10,544, % Sales/sqm/month same stores (R$) NA NA 4.2% NA NA 5.5% Sales/sqm/month same area (R$) NA NA 5.2% NA NA 5.8% Same-store rentals/sqm/month R$ NA NA 6.9% NA NA 6.8% Same-area rentals/sqm/month R$ NA NA 7.1% NA NA 6.8% Occupancy cost (% of sales) 11.0% 11.0% 0.0 p.p. 11.6% 11.6% 0.0 p.p. Occupancy rate 94.0% 95.3% -1.3 p.p. 94.6% 95.2% -0.6 p.p. Default 1.1% 1.8% -0.7 p.p. 2.0% 1.7% 0.3 p.p. (1) 2015 Total Sales considers Pátio Higenópolis mall sales only from 3Q15 onwards. 10

11 IGUATEMI PORTFOLIO Mall City Iguatemi Interest Total GLA (sqm) Iguatemi GLA (sqm) Iguatemi São Paulo São Paulo 58.13% 47,322 27,508 JK Iguatemi São Paulo 64.00% 34,957 22,372 Pátio Higienópolis São Paulo 11.20% 34,100 3,819 Market Place São Paulo % 26,940 26,940 Iguatemi Alphaville Barueri 78.00% 31,312 24,423 Iguatemi Campinas Campinas 70.00% 73,492 51,445 Galleria Campinas % 33,146 33,146 Iguatemi Esplanada (4) Sorocaba 55.37% 64,360 35,636 Iguatemi São Carlos São Carlos 50.00% 22,323 11,162 Iguatemi Ribeirão Preto Ribeirão Preto 88.00% 43,648 38,410 Iguatemi Rio Preto São José do Rio Preto 88.00% 43,649 38,411 Proprietary Area ( ³ ) Sorocaba % 3,678 3,678 Southeast Sub-total 69.06% 458, ,950 Iguatemi Porto Alegre Porto Alegre 36.00% 38,926 14,013 Praia de Belas ( ² ) Porto Alegre 37.80% 47,205 17,843 Iguatemi Florianópolis Florianópolis 30.00% 21,189 6,357 Iguatemi Caxias Caxias do Sul 8.40% 30,324 2,547 South Sub-total 29.61% 137,644 40,760 Iguatemi Brasília Brasília 64.00% 32,302 20,673 Federal District Sub-total 64.00% 32,302 20,673 I Fashion Outlet Novo Hamburgo Novo Hamburgo 41.00% 20,115 8,247 Boulevard Iguatemi (1) Campinas 77.00% 32,422 24,965 Outlet and Power Center Sub-total 63.22% 52,537 33,212 Malls Sub-total 60.40% 681, ,595 Market Place Torre I São Paulo % 15,685 15,685 Market Place Torre II São Paulo % 13,395 13,395 Torre Iguatemi São Paulo São Paulo 58.13% 4,469 2,598 Towers Sub-total 94.42% 33,549 31,678 Total 62.00% 714, ,273 (1) Boulevard is contiguous to the Iguatemi Campinas mall. (2) Weighted percentage interest in owned GLA. (3) Area owned by Iguatemi in Esplanada, held through a subsidiary. (4) Figure for the Iguatemi Esplanada Complex (Esplanada Shopping mall + Iguatemi Esplanada mall). 11

12 OPERATIONAL PERFORMANCE Mall Minimum Rental + Overage + Temporary Rent (R$ 000) 4Q15 4Q14 Var Var. Iguatemi São Paulo 52,982 50, % 169, , % JK Iguatemi 22,326 22, % 74,126 69, % Pátio Higienópolis (1) 25, , Market Place 7,970 9, % 28,133 28, % Torres Market Place 6,264 7, % 26,900 29, % Iguatemi Alphaville 11,002 9, % 32,307 29, % Iguatemi Campinas 29,910 23, % 90,884 76, % Galleria 6,745 7, % 21,783 22, % Iguatemi Esplanada (2) 19,309 19, % 62,792 62, % Iguatemi São Carlos 3,462 3, % 10,703 9, % Iguatemi Ribeirão Preto 6,586 6, % 21,732 20, % Iguatemi Rio Preto 7,256 6, % 23,318 15, % Iguatemi Porto Alegre 24,916 23, % 77,033 74, % Praia de Belas 14,451 13, % 46,575 44, % Iguatemi Florianópolis 8,445 8, % 26,671 26, % Iguatemi Caxias (3) 8,731 7, % 27,755 24, % Iguatemi Brasília 12,220 11, % 39,449 36, % I Fashion Outlet Novo Hamburgo 3,626 2, % 11,083 9, % Boulevard Iguatemi % 3,472 3, % Total 272, , % 838, , % Total (without Pátio Higienópolis) 247, , % 793, , % Mall Parking (R$ 000) 4Q15 4Q14 Var Var. Iguatemi São Paulo 8,914 7, % 29,884 28, % JK Iguatemi 5,827 5, % 21,439 19, % Pátio Higienópolis (1) 4, , Market Place 6,809 5, % 24,178 21, % Torres Market Place 4, , Iguatemi Alphaville 3,711 3, % 13,200 10, % Iguatemi Campinas 6,671 5, % 21,625 18, % Galleria 2,568 2, % 8,576 7, % Iguatemi Esplanada (2) 4,638 4, % 14,599 13, % Iguatemi São Carlos % 2, % Iguatemi Ribeirão Preto % % Iguatemi Rio Preto % % Iguatemi Porto Alegre 4,541 3, % 15,604 13, % Praia de Belas 3,808 2, % 13,103 10, % Iguatemi Florianópolis 1,520 1, % 5,352 5, % Iguatemi Caxias (3) 1, , Iguatemi Brasília 2,872 2, % 9,956 9, % I Fashion Outlet Novo Hamburgo Boulevard Iguatemi 106,53 115, % % Total 63,661 44, % 202, , % Total (without Pátio Higienópolis) 59,084 44, % 194, , % (1) 2015 numbers for Pátio Higienópolis mall only consider the 3Q15 and 4Q15. (2) Figure for the Iguatemi Esplanada Complex (Esplanada Shopping mall + Iguatemi Esplanada mall). (3) Changes in calculation for Iguatemi Caxias from 3Q15 onwards. 12

13 SALES AND RENTALS Total sales in 4Q15 were R$ 3.8 billion, 15% higher than in 4Q14 (5.8% if we exclude the acquisition of Pátio Higienópolis). Same-area sales (SAS) were up 5.2% in the quarter, a higher percentage than the YoY growth in same-store sales (SSS), of 4.2%. The malls with the best sales performance in the quarter were Iguatemi São Paulo, JK Iguatemi, Iguatemi Ribeirão Preto and I Fashion Outlet Novo Hamburgo. The segments with the best performance in the quarter were Entertainment, Health and Beauty, Jewelry and the International High-End Brands. Even though Household Appliances are still a negative highlight, it showed significant improvement in 4Q15 compared to 3Q15. Same-store rentals (SSR) were up 6.9% and same-area rentals (SAR) grew 7.1% in 4Q15. In this quarter, Rental Revenues, calculated at 100%, was R$ 273 million, or 16.8% higher than in 4Q14 (5.9% if we exclude the acquisition of Pátio Higienópolis). Parking Revenues, calculated at 100%, increased 43.4% when compared to 4Q14 (33% when excluding the acquisition of Pátio Higienópolis), mainly due to (i) readjustments of parking rates, and (ii) to the expansion of Iguatemi Campinas. The flow of vehicles increased 3% in the quarter versus 4Q14, driven mainly by the malls that still don t charge for parking (Iguatemi Rio Preto, Iguatemi Ribeirão Preto and I Fashion Outlet Novo Hamburgo). In these malls, the variation seen in the table below refers Valet services. Iguatemi São Paulo: Growth of 4.3% in rental revenues in 4Q15, mainly due to a strong comparison base in 4Q14 due to an extraordinary event (a renewal by a store operator backdated to July 2013). Without this non-recurring event that happened in 2014, the YoY growth in rental revenue in 4Q15 would have been approximately 9%. JK Iguatemi: Rental revenues were up 0.8% YoY in 4Q15, in spite of automatic rental adjustments, due to (i) higher vacancy due to the repositioning of the tenant mix, and (ii) lower temporary rentals (merchandising). Pátio Higienópolis: Iguatemi acquired two equity stakes in Pátio Higienópolis mall in 3Q15 and 4Q15. In 2014 Iguatemi was solely the manager of this mall (and because Iguatemi owned no equity stake we did not consolidate its revenues in our malls at a 100%). Market Place: Rental revenues were 12% lower YoY in the quarter mainly due to (i) construction works in the region - a bus corridor in Carlos Berrini Avenue, (ii) lower temporary rentals, due to a significant contract that ended in early 2015 and (iii) lower overage (percentage) revenue due to a repositioning of the mall s tenant mix. Restaurants have increased their importance in the mall mix, but have not yet delivered significant percentage rent as they just started to operate. Nonetheless, the positive effects of the repositioning of the tenant mix could already be seen in December, when a significant improvement in flow was perceived in the mall. Market Place Towers: Rental revenues were down 11% YoY, due to an increase in vacancy. Iguatemi Alphaville: Rental revenues were up 20% due to a reduction in vacancy and better leasing spreads. Growth could have been even stronger, but temporary rentals had negative growth in the period. 13

14 Iguatemi Campinas: The growth of 26% in rental revenues was mainly due to the 33% increase in the mall s GLA. Galleria: Rental revenues were down 9.5% in 4Q15, mainly due to (i) the negative impact of the expansion of Iguatemi Campinas, and (ii) significant roadworks on the highway, now largely completed. Iguatemi Esplanada: Rental revenue was down 2% due to an increase in vacancy. Important to highlight that the mall still has 40,000 sqm of GLA in maturation, due to an expansion inaugurated in 3Q13. Iguatemi São Carlos: Rental revenues up 13%, mainly reflecting the maturation of the expansion (3,274 m² of GLA) opened in July Iguatemi Ribeirão Preto: Rental revenues were up 4%, mainly due to a significant increase in overage (percentage rent) and temporary rentals. The parking revenue in 4Q14 relates to the valet parking service, which was outsourced during the year. Iguatemi São José do Rio Preto: Rental revenues were up 11.3%, reflecting the maturation of this mall. The growth was primarily in minimum rent and overage. The parking revenue is 100% due to the valet parking. Iguatemi Porto Alegre: In spite of the interferences due to the construction works for the expansion, the mall reported a 7% growth in rental revenues. Praia de Belas: Growth of 5% in rental revenues, primarily due to minimum rent. Iguatemi Florianópolis: Rental revenues up only 0.3% YoY in the quarter, reflecting a strong comparison base in 2014, when we put in place higher than average increases. Excluding this effect, the growth in rental revenues in the quarter would have been 5%. Iguatemi Brasília: Increase of 7% in rental revenues, primarily due to minimum rent and temporary rent. I Fashion Outlet Novo Hamburgo: Rental revenue up 22%, mainly due to minimum rent and overage (reflecting the increase in sales resulting from the maturation of the mall). 14

15 OCCUPANCY RATE AND OCCUPANCY COST In 4Q15, the average occupancy rate for Iguatemi malls was 94%. Occupancy cost was 11%, same percentage of 4Q14. Occupancy Rate Occupancy Cost 95.5% 95.0% 95.2% 95.1% 95.3% 96.0% 95.0% 94.1% 94.0% 10.8% 12.4% 11.6% 11.9% 11.0% 12.8% 11.6% 12.1% 11.0% 4Q13 1Q14 2Q14 3Q14 4Q14 1Q15 2Q15 3Q15 4Q15 4Q13 1Q14 2Q14 3Q14 4Q14 1Q15 2Q15 3Q15 4Q15 DELINQUENCY In spite of facing a challenging macroeconomic scenario, delinquency in 4Q15 was 1.1%, 0.7 bps below 4Q14 levels. ECONOMIC AND FINANCIAL PERFORMANCE Consolidated Profit and Loss Account (R$ 000) 4Q15 4Q14 % % Gross Revenue 196, , % 715, , % Taxes and Discounts -24,459-20, % -78,488-67, % Net Revenue 172, , % 637, , % Costs and Expenses -54,120-46, % -189, , % Other Operational Revenues 26,013 23, % 56,457 45, % EBITDA 144, , % 503, , % EBITDA Margin 83.7% 86.0% -2.3 p.p 79.1% 77.1% 2.0 p.p Depreciation and Amortization % % EBIT 116, , % 401, , % EBIT Margin 67.8% 71.6% -3.8 p.p 62.9% 62.2% 0.7 p.p Financial Revenue (Expenses) -53,931-39, % -159, , % Income Tax and Social Contribution Tax -20,610-14, % -47,447-23, % Net Profit 42,186 65, % 193, , % Net Margin 24.5% 39.2% p.p 30.4% 39.1% -8.7 p.p FFO 69,493 89, % 296, , % FFO Margin 40.4% 53.6% p.p 46.5% 54.0% -7.4 p.p The Company s Independent Management Reporting, based on the consolidated financial statements, has been prepared to reflect Iguatemi s investment in all malls, including the equity stake held in JK Iguatemi which was 50% up to March 31, 2014 and 64% as from April 1,

16 GROSS REVENUE Iguatemi s gross revenues were R$ 197 million in the quarter, 5% higher than in 4Q14. Management information Gross Revenues (R$ 000) 4Q15 4Q14 % % Rentals 128, , % 472, , % Administration Fees 12,084 10, % 42,577 37, % Parking 37,308 30, % 128, , % Other 18,637 24, % 72,556 74, % Total 196, , % 715, , % Rental Revenue in 4Q15, comprising Minimum Rental, Overage and Temporary Rent, was 5.6% higher than in 4Q14, and represented 65% of Total Gross Revenue. Management Information Rental Revenues (R$ 000) 4Q15 4Q14 % % Minimum Rental 105,352 97, % 399, , % Percentage Revenues (Overage) 10,364 9, % 32,093 29, % Temporary Rentals 12,854 14, % 40,884 41, % Total 128, , % 472, , % This 5.6% year-on-year increase in rentals compared to 4Q14 mainly reflects: Minimum Rent: Up 8% in 4Q15, mainly due to: (i) inauguration of the expansion of Iguatemi Campinas; (ii) acquisition of the Pátio Higienópolis Mall; and (iii) the automatic adjustments for inflation in rental contracts. Percentage Revenues (Overage): Up 10% YoY in 4Q15, with a special highlight to the new malls (Iguatemi Ribeirão Preto, Iguatemi Rio Preto and I Fashion Outlet Novo Hamburgo), Iguatemi SP, JK Iguatemi and Iguatemi Campinas. Temporary Rent: Down 13% YoY, reflecting the weak macroeconomic context, which adversely affects our clients decisions to invest in Marketing/Media. Management Fees were 13% higher than in 4Q14, due to the increase in malls revenues and to the inauguration of the Iguatemi Campinas expansion. It s worth noting the negative effect in this line of the 11.2% stake acquisition of Pátio Higienópolis mall. Parking Revenue was up 22% year-on-year in 4Q15, mainly reflecting: (i) the readjustments in parking rates; (ii) the inauguration of the Iguatemi Campinas and Iguatemi SP expansions; (iii) the acquisition of Pátio Higienópolis mall; and (iv) the increase in the vehicles flow (JK Iguatemi, Iguatemi Brasilia, Galleria, Iguatemi Alphaville and Iguatemi Esplanada). The Other Revenues line was 22.5% lower than in 4Q14, mainly due to termination of Co-Participation recognition in the Iguatemi Brasília mall, which completed its first five years in April 2015, and to the reduction of brokerage revenues. 16

17 DEDUCTIONS AND TAXES Deductions and Taxes totaled R$ 24 million, a 19% increase comparison to 4Q14 mainly due to (i) the increase in gross revenues; and (ii) the increase in discounts granted to retailers in our malls under maturation process. NET REVENUES Net Revenue in 4Q15 was R$ 172 million, 3.3% more than in 4Q14. COSTS OF RENTALS, SERVICES AND ADMINISTRATIVE EXPENSES Management Information (R$ 000) 4Q15 4Q14 % % Rent and Services Costs 35,282 31, % 125, , % Expenses 18,838 15, % 64,217 67, % Administrative Expenses 17,963 13, % 60,179 54, % Share-based Remuneration 719 1, % 2,876 5, % Pre-operational % 1,162 7, % Sub Total 54,120 46, % 189, , % Depreciation and Amortization , % 102,745 87, % Total 81,427 70, % 292, , % Costs and Expenses (before Depreciation) in 4Q15 totaled R$ 54 million, or 15.2% above 4Q14 (including Depreciation and Amortization, the comparison would be a YoY increase of 14.9%). As a consequence of the several actions adopted to reduce costs and expenses (for instance, the zero based/matrix budgeting system implemented in 2014), the increase in Costs was of only 12% in the quarter, in spite of the inauguration of Iguatemi Campinas expansion. Expenses, before Depreciation, increased 35% in 4Q15 due to retirement provisions and provisions related to layoffs (Iguatemi reduced its administrative staff in approximately 10% starting in December, 2015). In 2015, Expenses increased by 10.6% due to the provisions mentioned above. Share-based remuneration was 43% lower in 4Q15 than 4Q14, with the progressive amortization of the stock options plan issued in Pre-operational expenses decreased 82.2% in 4Q15 as a result of the deceleration of the Company s organic growth. Depreciation and Amortization increased 15% in the quarter and 18% in the year due to the inauguration of Iguatemi Campinas expansion and the acquisition of Pátio Higienópolis mall. 17

18 OTHER OPERATIONAL REVENUES (EXPENSES) In 4Q15, Other Operational Revenues (Expenses) was R$ 26 million, 10% higher year-on-year. The main reason for this increase was the PSV swap in the Galleria Complex, in the city of Campinas, for a hotel tower, which resulted in a R$ 12.4mn gain for Iguatemi. Other Operational Revenues (Expenses) (R$ 000) 4Q15 4Q14 % % PSV Swap 12,400 9, % 19,180 22, % Other 13,613 14, % 37,277 22, % Other Operational Revenues (Expenses) 26,013 23, % 56,457 45, % (1) Net amount. NET FINANCIAL REVENUES (EXPENSES) Iguatemi had Net Financial Expenses in 4Q15 of R$ 54 million compared to Net Financial Expenses of R$ 40 million in 4Q14. The 8% YoY decrease in Financial Revenues was due to the reduction in the cash position of the Company in the 4Q15 versus 4Q14. During the last 12 months the main capex disbursement were related to (i) the expansions of Iguatemi Campinas, Iguatemi São Paulo and Iguatemi Porto Alegre; and (ii) the payment of the first installment of the stake acquisition in Patio Higienópolis mall made in October, Financial Expenses were 21% higher than in 4Q14, mainly due to the higher Selic rate and, as a result, the CDI rate, to which 68% of our debt is indexed. Net Financial Revenues (Expenses) 4Q15 4Q14 % % Financial Revenues % 95, , % Financial Expenses % -255, , % Net Financial Revenues (Expenses) % -159, , % INCOME TAX AND SOCIAL CONTRIBUTION TAX (CURRENT AND DEFERRED) In 4Q15 the Expense on Income Tax and Social Contribution Tax totaled R$ 20 million, or 38% higher than 4Q14. The main reason for this tax increase was the PSV swap in the Galleria Complex for R$ 12.4 million. NET PROFIT AND FFO Iguatemi had a Net Profit of R$ 42 million in the 4Q15, 36% lower than its 4Q14 Net Profit (Net Margin in the quarter was 25%). FFO for the quarter was R$ 69 million, with a FFO Margin of 40% (22% lower than in 4Q14). 18

19 EBITDA EBITDA reached R$ 144 million in 4Q15, with a Margin of 84%, representing an EBITDA growth of 0.6% versus the same period of the previous year. EBITDA (R$ 000) 4Q15 4Q14 Var Var. Net Revenues % 637, , % Net Profit % 193, , % (+) Income Tax & Social Contribution Tax % 47,447 23, % (+) Depreciation and amortization % 102,745 87, % (+) Financial expenses % 255, , % ( ) Financial revenues % -95, , % EBITDA % 503, , % EBITDA Margin 83.7% 86.0% -2.3 p.p 79.1% 77.1% 2.0 p.p DEBT During the quarter Iguatemi issued R$ 105 million of Securitization of Real Estate Receivables (CRIs), with a final rate of CDI +1.30% p.a. (all in), a maturity of 19 years and an average term of 12 years. The placement was made in two tranches: (i) R$ 35 million on December 29 th, 2015, and (ii) R$ 70 million on January 4 th, At the end of the quarter, the Company s Total Debt was R$ 2.08 billion and Net Debt/EBITDA was 3.35x. The average tenor of the debt was increased to 4.5 years; the average cost of the debt is 94.8% of the CDI rate. Iguatemi s Cash Position at the end of 4Q15 was R$ 393 million, resulting in a Net Debt position of R$ 1.7 billion. Consolidated Figures (R$ 000) 12/31/2015 % 09/30/2015 % TJLP 269, % 295, % IPCA 299, % 303, % CDI 1,412, % 1,341, % Others 101, % 97, % Short-term 364, % 321, % Long-term 1,718, % 1,716, % Total debt 2,083,200-2,038,055 - Cash and cash equivalents 392, ,078 - Net Debt (Cash) 1,690,218-1,617,977 - EBITDA (LTM) 503, ,948 - Net Debt / EBITDA 3.35x x - Cost of Debt 94.8% CDI % CDI - Debt term 4.5 years years - 19

20 DEBT AMORTIZATION TIMETABLE (1) Financing Debentures (1) Considers only the first tranche (R$ 35 mn) of the CRI issuance (total of R$ 105 mn) placed on December 29 th, CASH FLOW Iguatemi s Cash Position decreased by R$ 27 million in 4Q15 versus the end of the previous quarter, to R$393 million. The main changes are explained below: Net Cash from Operations (1), R$ 170 million; Net Cash from Investment Activities (2), R$ 160 million negative, invested in the Company s acquisitions and expansion projects. Cash from Financing Activities (3), R$ 37mn Cash flow in Management Reporting format - Adjusted* Initial Balance Operational¹ Investments² Financing³ Final Balance (1) Operational Cash Flow adjusted by R$ 26.5mn, for payment of interest. (2) Cash from Investments adjusted by R$ 13.5mn, classified in the Management Accounting as Cash investments. (3) Cash Flow of Financing Activities adjusted as per Note 1. 20

21 INVESTMENT PROPERTIES In December 2015 we updated the fair value of our properties in operation, and properties under development. On December 31 st, 2015 this amount (for the equity interest owned by Iguatemi) was R$ 8.3 billion or 8.4% higher than 2014 year-end, reflecting the opening of the new enterprises projects and acquisitions of stakes (1) Value of 100% of malls (R$ mn) 5,849 7,340 8,678 10,531 11,401 12,613 14,955 Iguatemi stake (R$ mn) 3,288 4,181 5,258 6,118 6,862 7,647 8,287 Total GLA ( 000 sqm) Owned GLA ( 000 sqm) Number of shares 79,255 79,255 79, ,510 ( ² ) 176, , ,612 Stock price ( ² ) NAV per share ( ² ) Base date: December 31st, (1) Only includes operating malls and expansions to be inaugurated until 2Q16. Does not consider greenfields/expansions to be inaugurated from 3Q16 onwards. (2) Stock Split in The fair value of the properties for investment was estimated using the discounted cash flow method. All the calculations are based on the analysis of the physical qualifications of the properties under study coupled to a range of information researched in the market, used to determine the fair value of the projects. The following assumptions were used for the valuation: (i) real discount rate of 7.8% to 10.2% p.a.; and (ii) real perpetuity growth rate: 2.0% to 3.0% p.a. 8,287 3,340 5, % Base date for the Market Cap: 12/31/2015. Market Cap EV NAV 21

22 INVESTMENTS Investments (R$ mn) Estimated Acquisitions N/A Other investments N/A Total (1) Includes capex for (i) maintenance/reinvestment, (ii) expansions (Iguatemi Porto Alegre mall and tower), (iii) outlets, and (iv) the 2 nd installment of the acquisition of Pátio Higienópolis mall (~R$ 50 mn). In 2015 Iguatemi invested R$ 360 million, in which R$ 133 million were used for acquisitions. For 2016 we estimate investments in the order of R$ million, already contemplating the second installment of the Pátio Higienópolis acquisition (R$ 50 million - updated by 100% of the CDI rate - paid on a subsequent event on February 25 th ). PROJECTS IN PROGRESS GREENFIELD PROJECTS AND EXPANSIONS The figures below refer to 100% of each project. Greenfields Expansions I Fashion Outlet Santa Catarina I Fashion Outlet Paraná I Fashion Outlet Nova Lima Iguatemi Porto Alegre Torre Iguatemi Porto Alegre Planned opening Out/ Apr/16 Jun/16 Total GLA (sqm) 30,000 30,000 30,300 20,376 10,692 Iguatemi stake 54% 42% 54% 36% 36% % Contracted N/A N/A N/A 90% N/A % Built N/A N/A N/A 94% 60% 22

23 LANDBANK In the medium/long term, we expect Iguatemi to continue growing in a robust fashion. Our landbank of approximately 1.0 million square meters (281,000 sqm of GLA and 757,000 sqm of potential floor area) demonstrates the growth potential that can be captured by Iguatemi (in addition to the new opportunities of greenfields and outlets that we expect to be announcing over the coming years). Mall Mall (GLA sqm) Real Estate (PA sqm) % Iguatemi Iguatemi São Paulo 5, % Iguatemi Campinas - Site annex (2) - 501, % Iguatemi Campinas - Boulevard - 19, % Iguatemi Porto Alegre - 32, % Iguatemi Porto Alegre - Site annex (1) 22,000 29, % Iguatemi Esplanada 28,500 27, % Praia de Belas 5, % Galleria 28,200 17, % Market Place % Iguatemi São Carlos 20,000 15, % Iguatemi Brasília 10, % Iguatemi Alphaville 12, % Iguatemi Ribeirão Preto 20,500 35, % Platinum Outlet 12,000 6, % Iguatemi Rio Preto 21, % Iguatemi Rio Preto - Site annex (3) - 23, % Subtotal, malls in operation 185, , % I Fashion Outlet Santa Catarina (1) 15,034 8, % I Fashion Outlet Nova Lima (1) 15,000 8, % Jundiaí (1) 50,000 20, % I Fashion Outlet Paraná (1) 15,000 15, % Subtotal, malls under development 95,034 51, % Total 280, , % (1) Sites exchanged. (2) Exchange option + preference. (3) Exchange option. Note: Figures are indicative. Projects may be altered, changing the coefficients of use, and usage of the construction potential. 23

24 PROJECTS IN PROGRESS - STATUS IGUATEMI PORTO ALEGRE (EXPANSION) FEBRUARY

25 IGUATEMI PORTO ALEGRE TOWER FEBRUARY 2016 I FASHION OUTLET SANTA CATARINA JANUARY

26 STRATEGY AND GUIDANCE Iguatemi continues to focus on the South and Southeast regions of Brazil, and Brasília, the areas with the highest purchasing power and potential per capita consumption in the country, with a target public predominantly in the A and B income groups this public is less susceptible to adverse macroeconomic situations, and more demanding in terms of quality of products and services offered. Since 2009, Iguatemi has consistently met or exceeded its guidance for profit and growth published to the market. It wasn t different in 2015: we met the implicit EBITDA associated with the guidance released in 2014, despite the challenging macroeconomic scenario and the postponement of the expansion of the Iguatemi Porto Alegre Mall. In 2016, despite a more adverse scenario, Iguatemi expects to continue to grow its net revenues by 5-10% as indicated below in our new short-term guidance Guidance Real Guidance Real Guidance Real Guidance Real Guidance Real Guidance Real Guidance Real Guidance Net Revenues Growth EBITDA Margin EBITDA (R$ mn) Dividends (R$/share) PSV swaps (R$ mn) 9 12% 14.5% 15-17% 21.2% 25 30% 25.0% 25-30% 24.6% (1) 15 20% 13.0% (3) N/A 27.1% 12-15% 8.1% (5) 5-10% ~70% 69.7% 70-72% 70.1% 70-72% 71.3% ~70% 72.5% (2) 70-72% 75% 72-75% 77% 76-79% 79% 73-77% N/A 151 N/A 203 N/A 235 N/A 298 N/A (4) 504 N/A N/A 0.32 N/A 0.37 N/A 0.38 N/A 0.40 N/A N/A 0.34 N/A N/A N/A N/A N/A N/A N/A N/A 19.2 N/A (1) Iguatemi s Net Revenues would have grown 27.7% in 2012 if Boulevard Rio Iguatemi had not been sold. Alternatively, Iguatemi s Net Revenues grew 28.7% in 2012 if we exclude the Net Revenues of Boulevard Iguatemi in 2011 and (2) Adjusted EBITDA margin (and growth in adjusted EBITDA) leave out of account other operational revenues of R$ 108.2mn, relating to the sale of Boulevard Rio Iguatemi. (3) Iguatemi met the implicit EBITDA figure indicated by the guidance given for net revenues growth and EBITDA margin (implicit guidance of R$ mn vs. actual EBITDA of R$ 347.8mn). (4) Implicit EBITDA associated with the guidance of Net Revenues growth and EBITDA Margin. (5) Net revenues growth was 8.1% as per the postponement of Iguatemi Porto Alegre expansion to Apr/2016 (original date: Sep/2015). We find important to highlight that this year the Other Operating Revenues (Expenses) line should be well below the numbers reported in the past years once we believe 2016 will not be the best moment to conduct PSV negotiations. Growth in the Company s GLA: We have almost tripled the size of the Company since its IPO, in early Today we have 443 thousand sqm of owned GLA. With the three Premium Outlet projects announced, one expansion and the construction of one commercial tower in progress, our owned GLA will increase to approximately 500,000 sqm in

27 Owned GLA ('000 m²) (Pre IPO) Additional GLA Sale of Boulevard Rio Current GLA Total Announced GLA until 2019 CAPITAL MARKETS Iguatemi shares are listed on Novo Mercado of the BM&F Bovespa, under the ticker IGTA3. The Company is in the portfolio of the IBx-100 Index. This table shows principal stockholders and the free float: Stockholding structure Number of shares ( 000) % of total Jereissati Participações 90,801, % La Fonte Telecom 1,441, % Petros 18,021, % Treasury 172, % Outros 66,174, % Total 176,611, % Iguatemi stock price closed the fourth quarter of 2015 at R$ According to Bloomberg, on December 31, 2015 thirteen sell side analysts had coverage on Iguatemi shares. IGTA3 (1) Iguatemi x Ibovespa Closing Price (12/30/2015) R$ Higher / Lower Price - 4Q15 R$ / R$ Higher / Lower Price R$ / R$ Depreciation in 4Q15-8.0% Depreciation in % 100 Number of shares 176,611,578 Market Cap R$ 3.34 bn 50 IGUATEMI IBOVESPA Average daily liquidity 11,947,137 0 fev-07 fev-08 jan-09 jan-10 jan-11 jan-12 jan-13 jan-14 jan-15 dez-15 (1) Source: Bloomberg. Base date: 12/30/