Brasil Brokers Investor`s Meeting New York, 2017

Transcription

1 Brasil Brokers Investor`s Meeting New York, 2017

2 Disclaimer This presentation does not constitute an offer, or invitation, or solicitation of an offer to subscribe or purchase shares or any other financial instrument, nor does any information herein form the basis to any contract or commitment whatsoever. The material that follows contains general business information about Brasil Brokers Participações S.A. and its subsidiaries. It is not intended to be relied upon as advice to potential investors. The information does not purport to be complete and is in summary form. No reliance should be placed on the accuracy of the information presented herein and no representation or warranty is made concerning the accuracy of the information presented herein. This presentation contains statements that are forward-looking and are only predictions, not guarantees of future performance. Investors are warned that these forward-looking statements are and will be subject to many risks, uncertainties, and factors related to the operations and business environments of Brasil Brokers, such as competitive pressures, the performance of the Brazilian economy and the industry, changes on market conditions, among other factors disclosed in Brasil Brokers filed disclosure documents. Such risks may cause the Company s actual results to be materially different from any future results expressed or implied in such forward-looking statements. Brasil Brokers believes that based on information currently available to Brasil Brokers management, the expectations and assumptions reflected in the forward-looking statements are reasonable. Lastly, Brasil Brokers expressly refuses any duty to update any of the forward looking statements contained herein. 2

3 Overview 04 Strategic Plan 09 Business Cycle 13 People & Management Model 16 Goals and Bonus 22 Results 25 Appendix 33

4 Highlights of the Group Brasil Brokers joined several companies in the market, consolidating its position as one of the largest and most complete real estate brokerage in the country. SalesTeam t h o u s a n d Associated Brokers funcionários Footprint 16 Subsidiaries 9 States 43 Stores Partnerships 121 Real State Agencies 662 Points of sale 43 thsd units in inventorie Highlights 4Q16 Present in Real Estate Launches, Inventories, Secondary Market, Corporate Businesses, Rental and Mortgages; 16 subsidiaries presents in 9 states (43 physical stores); More than 8.3 thsd associated brokers; 672 employees; R$ 10.1 billion in launches; R$ 4.9 billion in contracted sales; 11.2 thousand units sold; R$ million in net revenue; 4

5 Homebuilders as Partners Almost 500 clients that Brasil Brokers has a relevant penetration as main business partner Partnership with all Listed Developers Revenue Breakdown 28% 72% and more than 450 that are not listed. 5

6 Management Committed to the Highest Standards of Corporate Governance Directors and Governance Board of Directors Sidney Breyer Interim President of the Board Independent Member Luis Moura Member of the Board Squadra Investimentos Guilherme Aché Member of the Board Squadra Investimentos Felipe Gottlieb Member of the Board BTG Pactual Total Alignment of the Directors and Officers Boards Structure Composed of 5 members, 1 of them Independent; Term valid until April 2018, reelection permitted; Assisted by the Internal Control Department; Shareholders that represent 27,9%¹ of capital. TBD Member of the Board Administration Claudio Hermolin CEO Andreas Yamagatta CFO and IRO Arnaldo Faissol Management Director (1) Shareholders positions on 03/31/2017. Board and Operational Committees Monthly Board of Directors Meetings; Establishment of Operational Committees to support management with the participation of directors; Operational Committees: Finance, People, Technology. 6

7 New Executives CEO Mr. Claudio Hermolin has an executive career built by working in large companies in the segments of construction, development and distribution of electric power, such as Calçada Incorporadora e Construtora, PDG Realty, Even, CEMAR and Agenco. Mr. Claudio Hermolin has a degree in civil engineering from PUC-RJ, with postgraduations and extension courses from FGV and PUC-RJ. CFO andiro Mr. Andreas Yamagata works in the real estate market for over 20 years, having worked for some of the most important companies in the segment, such as Gafisa and Cyrela, where he occupied the position Finance Director, Business Director and Regional Director of the Midwest. Mr. Andreas Yamagata has a degree in civil engineering from UFRJ, with post-graduations and extension courses from FIA, Kellog and USC Sol Price. Management Director Mr. Arnaldo Faissol has an executive career in finance positions in large companies of Oil&Gas, Infrastucture, Retail and Distribution of electric power, such as Bravante, Invepar, Inbrands, BR Home Centers, Ponto Frio e Equatorial Energia. Mr. Arnaldo has a degree in Economy and Finances from IBMEC-RJ. 7

8 Overview 04 Strategic Plan 09 Business Cycle 13 People & Management Model 16 Goals and Bonus 22 Results 25 Appendix 33

9 Company History Start-Up & Acquisitions Organic Growth Resumption of Acquisitions Restructuring Transformation The Company was established on January, 2007; Acquisition of 16 companies and consolidation of Brasil Brokers as manager; IPO in October 2007; Acquisition of 10 more companies in Despite the crisis, Brasil Brokers has grown significantly in the period; CAGR revenue of 28% between 2008 and 2010; Expansion of credit supply in the economy, buying urgency, large volume of launches; Start of the partnership with HSBC to promote and offer mortgages on the secondary market Acquisition of 7 companies between 2011 and 2012; More mature real estate market, giving its first signs of slowdown in Reduction in the number of launches and sales pace; Adequacy of operational leverage for the sector s momentum; Restructuring to capture administrative synergies and reduce costs. Assumption of the partnership with HSBC by Bradesco to promote and offer mortgages. First signs of potential recovery of the market with increased customers confidence; Need for institutional repositioning for the Company to conclude the turnaround; Big transformation on the business model to capture the new client : more demanding, selective and connected to new technologies (ebusiness); Transformation will be supported by the collaboration and commitment of all involved to realize the Great Dream

10 To guide this transformation from the point A to point B we are changing the strategic plan and the management model of the Company The selected Strategic Planning Methodology is simple, being adopted by some of the best Brazilian companies (AMBEV, Equatorial Energia, etc...) It helps to establish the path from "A" to "B", through the collaboration and commitment of all involved to realize the Great Dream. Point B Where do we want to be? Vision Great Dream Enviroment Opportunities (O) Threats (T) Point A Where are we? Strenghts (S) Weaknesses (W) 10

11 After completing our SWOT analysis, we have set the Group's top priorities for the next few years We will implement higher coordination to have control and effectiveness in the execution of BBRK`s transformation, directed by the PDCA model Priorities Operational Turnaround Transformation Process Well-succeded Implementation Cash Position Strengthening Productivity increase Institutional Repositioning People Management Technology Businesses Diversification Transformation Management 11

12 Overview 04 Strategic Plan 09 Business Cycle 13 People & Management Model 16 Goals and Bonus 22 Results 25 Appendix 33

13 Services Portfolio We have a broad portfolio of services to provide a unique and complete experience for real estate transactions Launches Partnerships with 490 developers Inventories 1 Fully dedicated and specialized Board and commercial structure Others Services Corporate Sales, Real Estate Consulting and Franchising Home Services Platform Used Properties We offer greater security, dedication and commitment of professionals for those who are selling and buying Rental More than 4,000 units under our adminstration Mortgages Commercial partnership with Bradesco Bank (1) Real estate sale segment launched over 180 days, with lower marketing effort of developers 13

14 Leading us to the Great Dream We want to be the leading business platform in the real estate market, generating significant compounded return to our partners and shareholders. A Complete Home Services Platform will allow Brasil Brokers to diversify their sources of revenue generation and cash in to improve it`s profitability and/or face a bear market. Full Real State Businesses Platform Increase in the Potential Sales This position boosts sales and increase the relationship with our clients. It also allow us to increase our perception of value and increase the satisfaction and earnings of our partners. Retention of Sales Team and Partners 14

15 Overview 04 Strategic Plan 09 Business Cycle 13 People & Management Model 16 Goals and Bonus 22 Results 25 Appendix 33

16 The new management model seeks to link the Great Dream to bonus and career, creating a strong culture of results The benefit of creating goals measurable and replicable in to generate a strong culture of results, adding value to all Stakeholders. Great Dream Strategies Values / Culture Direction, Budget, Goals Behavior / Skills Routine and Projects Management Performance Evaluation Recruitment and Development Bonus and Carrer 16

17 New Routine of follow up and presentation This New Routine of presentation of defined KPI`s and the achievement percentage ending in follow ups at Director`s Meeting allows us to define Tatical Plans in a high speed. KPI`s Results Detailing Deviations Tatical Plan Routine and Projects Mng. Performance and Recruitment 17

18 Status Report Earth Project People and Management Model Defined Timeline of implementation of the People and Management Model; Defined the Value Chain for Processes and Subprocesses of the Company; Concluded and diclosed the Goals Breakdown for the executives; Implemented New Routine of follow up and presentation at Director`s Meeting; Preparing Endomarketing strategy and materials for general disclosure of goals; Follow-up of the goals via Charts and Panels; Sponsor: Claudio Hermolin (Deadline: Jan/2018) In Progress Routine and Projects Mng. Performance and Recruitment 18

19 1 Culture Adhesion 3 5 Performance Evaluation will be a fundamental tool in the Management Model, to promote Leaders that make the difference in Brasil Brokers. Recruitment and Development Performance Evaluation Internals References for new Opportunities Careful Selection and Recruitment High Quality on Trainning Missionaries Stars Employees Satisfaction Recruitment and Development Model - Systems - Physical Structure Recovery Talents Income, Gratitude, Accountability Feedback e SLA Culture Change Mercenaries Limits and Deliverys Defined Results Delivery Routine and Projects Mng. Performance and Recruitment 19

20 Behavior/Skills Evaluation Model - 360º Helps filter and evolve group performance Highly motivational for high performers Behavior Focus on results, team spirit and ethics above all else. Skills ability, team management, excellence in customer service (internal and external), routine management and project management Routine and Projects Mng. Performance and Recruitment 20

21 Overview 04 Strategic Plan 09 Business Cycle 13 People & Management Model 16 Goals and Bonus 22 Results 25 Appendix 33

22 Goals for 2017 CEO Cash generation PSV Market Share Implementation of the People and Management Model Company Revenue Operational Directors Cash generation PSV Market Share Implementation of the People and Management Model Operations Revenue CFO Cash generation Costs and Expenses Budget Efficiency of Shared Services Center Short-term liquidity projects People Director Implementation of the People Model Reduction of Labor Litigation Reduction of Brokers Turnover Development and Training Model Implementation Efficiency of Shared Services Center Personnel and Sales Force registration Management Director Implementation of the Management Model New Business Projects Implementation IT Projects Implementation Cash generation 22

23 Bonus and Income Participation 1 st phase Current Year 2017 Program for 30 people LEVEL: Presidence and Vice-Presidences: Up to 12 salary Directors: Up to10 salary Managers: Up to 8 salary Payment based on the compound efect for FINAL GRADE and multilple per LEVEL PERFORMANCE GRADE represents 80% of the FINAL GRADE, varying from 8 to 12 depending on the achievement of Goals; BEHAVIOR GRADE represents 20% of the FINAL GRADE Timeframe Between January and December, 2017 Date of Payment Until March 15, 2018 Program aligned with best practices in the market 23

24 Overview 04 Strategic Plan 09 Business Cycle 13 People & Management Model 16 Goals and Bonus 22 Results 25 Appendix 33

25 Operational Indicators Confronting the difficult moment of the market, the Company has made important changes in its structure in order to adjust its operational leverage. Overhead Stores Employees of sold companies Stores of sold companies 1,441 1, (-53%) % (-64%) % Sales Force (Associated Brokers) Points of Sales Associated Brokers of sold companies 15,528 14,927-7,207 (-46%) 9, ,175 8,321-9% (-58%)

26 Contracted Sales Sales from complementary businesses represented 12% of the total, with São Paulo and Rio de Janeiro being the most representative states. Mercado -27% Primário 76% Annual Contracted Sales R$ billion PSV of sold companies 12.3 Mercado Secundário 21% -40% % % Breakdown per segment- Inventories 45% Others 12% Others 12% 20% Secondary 23% Launches Breakdown per state Quarterly Contracted Sales R$ billion ) PSV of Corporate Segment RJ 38% SP 50% % % Breakdown per ticket Above R$650 k 33% Up to R$ 150 k 4% 4Q15 1Q16 2Q16 3Q16 4Q16 26% 24% R$350 - R$650 k R$150 - R$350 k 26

27 Revenues The Revenue originated in complementary businesses, that is, different from the traditional Primary and Secondary Markets, represented 29% of the total Breakdown per Segment- Mortgage Others Net Revenues (R$ million) Net Revenues of sold companies Corporate Rental 12% 10% 6% 2% 53% Primary Market % % -15% -20% Q15 3Q16 4Q16 Secondary Market Breakdown per Segment - Secondary Market 18% 19% Mortgage Others Corporate Rental 5% 8% 1% 2% 66% Primary Market 27

28 Costs and Expenses Strong reduction of 16% in total Costs and Expenses of the Company reached in. Not considering the labor suits losses, reduction would be 20%. Adjusted Costs and Expenses (R$ million) Costs and Expenses Breakdown (%) Labor Suits Losses -7% -27% -16% % % +19% Q Q Q16 2% 5% 7% 2% 21% 22% 40% Payroll and Related Charges Occupancy Outsourced Services Other Op. Income (Expenses) PDA Cost of Services Rendered Other Admin. Expenses Costs and Expenses Reductions (R$ million) -16% , % , ,1 9,8 148,9 Costs and Expenses Operational Costs and Expenses Cost of Services Payroll and Related Charges Occupa ncy Outsourced Services Other expenses Provision for Doudtful Accounts Other Operating Income (Expenses) Costs and Expenses Loss in labor lawsuits Adjusted Costs and Expenses 28

29 Labor Lawsuits One of the effects of the severe crisis affecting almost all economic sectors was the significant growth in the number of labor claims filed, in our case, by associated brokers. Scenario Labor Lawsuits Effects (R$ million) Deterioration of the real estate market and the winding up of some operations, impacted in a higher volume of labor losses; 68,5 Despite Law 6,530 and Law 13,097/ regulating the the exercise of real estate brokerage, and their independence profession, some courts has been selfless ; We are addressing this situation as an issue of relevance for the 1,1 2,7 2,5 5,5 6,2 14,4 9,9 14,1 sector and bringing the attention of highest judicial and legislative instances. Losses Payments Provisions Number of Labor Lawsuits (#) Total Amount Involved in Claims (R$ million) +34% % % 141,4 0% 141, ,6 29

30 Operational Results and Profitability Adjusted EBITDA (1) (R$ million) Adjusted Net Income (1) (R$ million) EBITDA (R$ million) Net Income (R$ million) (1) Excludes non-recurring effects and IFRS impacts 30

31 Cash Position Weight of fixed costs on the bottom line became larger due to the decrease in sales year on year, negatively affecting the cash flow. Cash Position (R$ million) Cash Flow (R$ million) Cash Begin of Period - 16/1 Oper. Activities Labor Suits Payments Net Cash from Activities Invest. Pay of Shareholders Cash End Acqusitions Act. of Period - 12/31 31

32 Overview 04 Strategic Plan 09 Business Cycle 13 People & Management Model 16 Goals and Bonus 22 Results 25 Appendix 33

33 Brazilian Real State Market (1) Opportunities: Despite the economic crises faced by the country, the Brazilian market has enormous potential. The most recent figures point to contracted sales of R$ 70 billion in the Primary Market in while the Secondary market totaled R$ 230 billion. 96 Entire Market PSV - Primary Market R$ billion Sales Over Supply Primary Market Inventories Sale Over Supply - % 27% 27% 24% 22% 18% 16% Entire Market PSV Secondary Market FIPEZAP Index National R$ billion Base (1) Sources: FIPEZAP, Geoimóvel, Geoimóvel, Companies IR Reports and Brasil Brokers Market Intelligence 33

34 Macro Scenario Some signs on the economy already showing a possibility of gradual improvement throughout Annual Evolution of Brazils GDP- % (2) Selic Rate vs Inflation % p.y. (3) (4) 7.5% 2.7% 1.0% 2.7% 0.1% -3.6% -3.4% 0.7% Selic Rate Inflation 10.8% 11.0% 5.9% 6.5% 7.3% 5.8% 10.0% 11.8% 5.9% 6.4% 14.3% 10.6% 13.0% 6.3% 8.5% 3.8% E E Consumer Confidence Index (1) SBPE Savings Account x Real Estate Credit (5) Contracted Sales Brazilian Primary Market - R$ Billions Consumer Confidence Index SBPE Savings Account Balance in R$ Billions Real Estate Credit Balance in R$ Billions March,17 (1) BACEN (2) (3) e (4) (5) 34