Roadshow Presentation September Company Presentation. July 2017

Transcription

1 Roadshow Presentation September 2016 Company Presentation July

2 Disclaimer This presentation contains certain statements related to the comprehensive overview of Vinte Viviendas Integrales, S.A.B. de C.V. " ( Vinte ) " regarding its activities to the present day. The information included in this presentation is a summary of information regarding Vinte which is not intended to cover all related information about Vinte. The information contained in this presentation has not been included in order to provide specific advice to investors. This presentation shall not be reproduced or distributed by any individual and you hereby agree that the information provided through this is kept confidential. The statements contained herein reflect the current views of Vinte with respect to future events and are subject to certain risks, uncertainties and assumptions. Many factors could cause future results, performance or achievements of Vinte be different from those expressed or implied by such forward looking statements, including among others, economic or political changes and global business conditions, changes in exchange rates, the overall level of the industry, changes in housing demand, prices of raw materials, etc. If one or more of these risks occur, or should the underlying assumptions prove to be incorrect, actual results may vary materially from those described herein as anticipated, believed, estimated or expected. Vinte does not pretend, nor assume any obligation to update the statements presented below. According to the Ley del Mercado de Valores, only securities registered in the Registro Nacional de Valores and containing prior authorization from the Comisión Nacional Bancaria y de Valores may be a matter of public offering, even if by this date its procedure is still ongoing. Any public offering to be held in the United Mexican States shall comply with the requirements of the Ley del Mercado de Valores, which should include the submission of a prospectus that contains, among other things, a description regarding Vinte s financial, administrative, economic, accounting and legal situation, in addition to relevant information about Vinte that can contribute to the proper decision-making process of a public investor. This presentation does not substitute the information that needs to be provided in the previous mentioned corresponding prospectus. This presentation does not constitute an offer nor an invitation or solicitation of an offer, to subscribe for or purchase any securities. The contents of this presentation do not constitute any obligation by Vinte. This presentation is exclusively for informational purposes. Certain financial ratios herein included may differ from those included in the final prospectus and from the financial information disclosed periodically by Vinte due to rounding of numbers. 1

3 Vinte is a company that builds communities through a diversified, replicable and institutional business model, with a vision of profitability and transcendence 1 Builds communities that increase in value over time More than 28k homes in 22 developments / communities Vinte develops integral communities: homes with controlled access, equipped parks, recreational areas, schools, medical facilities, water treatment plants and roads Avg. historical annual home price appreciation between 5.0% and 9.3% 2 3 Diversification and flexibility Replicable business model Presence in 6 Mexican states (Estado de Mexico, Hidalgo, Queretaro, Puebla, Quintana Roo y Nuevo Leon), houses between Ps. 350k and more than 3,000k, with healthy mortgage source diversification (Fovissste, Infonavit and banks) Dynamic portfolio with flexibility to adapt to potential government and economic policies, which Vinte has transformed into opportunities Growth plan aligned to existing land bank and authorizations, and operating experience in current developments under operation Established methodologies, processes and systems to execute business plan 19.8% sales CAGR (approx. 50% of sales come from word of mouth references) 4 Focus on profitability Higher EBITDA margin than other companies in the sector trading in the BMV (last 5 years avg.) ~20% ROE in the last eight years 9 consecutive years paying dividends in a cash flow generating vision 5 Institutionalization Founded and led by a management team with an average of 25 years in the sector More than 5 years with independent board members and 3 of them conform Audit and Corporate Practices Committees World Bank (IFC) and IBD (IIC) have been shareholders during and 2013-actual respectively 2

4 Vinte 1 builds communities that increase in value over time

5 Vinte's Business Model Proven business model that seeks to combine different market segments in each location, creating operational flexibility towards changes in government policies and market environment. Affordable Ps.340k Ps.550k Middle Income Ps.550k Ps.1,100k Residential Ps.1,100k more thanps.3,000k Design, amenities and a community lifestyle in an ample offering of products Mexican Banks Co-Financing Vinte's customer base has access to different sources of financing 4

6 Vinte creates communities that increase in value over time 2...with diversification and flexibility

7 Business Model Based on Product Diversification Avg. Price vs. Competitors (1) (Ps., 2016, Price per unit) 624, , % 551, % 69.5% 374, % 332,000 Higher average price per home than competitors mitigating the impact of potential changes in government policies 2.1% ARA RUBA JAVER CADU "Average Price" "% of sales coming from homes under $350,000 Products with high quality design, desirable location and post sale services in all types of homes allows strong segment diversification Sales Distribution by Segment (Avg. price and %, Ps. 000s, LTM Jun. 2017) Higher than a Ps.1 mm ,061 1,311 1,486 1,802 2,228 2,451 2,546 2,569 Ps.700k Ps.1 mm Ps.500k Ps.700k 52% 71% Ps.350k Ps.500k Up to Ps.350k 48% 29% LTM Jun'2017 Source: Company information Notes: 1 Only companies with public information available in

8 and Mortgage Sources Flexibility Mortgage Sources for Vinte's Customers (%, Ps. 000 s) ,311 1,802 2,546 2,569 Other Without mortgage ovissste 'Infonavit Tradicional' Banks (Sofoles up to 2009) 15% 8% 10% 3% 11% 14% 14% 7% 5% 5% 12% 13% 13% 26% 50% 42% 25% 23% 22% 2% 2% 25% 12% 14% 32% 35% 45% 13% 13% 20% 19% 7% 15% 14% 13% LTM Jun'2017 Other Without mortgage Fovissste Infonavit Total (1) 'Infonavit Tradicional' Banks (Sofoles up to 2009) Mortgage supply from Sofoles before the crisis Fovissste increases mortgages and payment cycle 'Infonavit Total' promotes financing for middle income and residential housing Fovissste increases mortgages and reduces payment cycle Banks reduce rates seeking to increase their participation in mortgages 'Infonavit Tradicional' increases loans up to Ps.1.66mm (April 17) Historically ~5% to 13% (2) of Vinte's sales come from homes with subsidies, which are classified in 3 types: Infonavit, Fovissste and 'Desarrollo Certificado' (3) Source: Company information Notas: 1 Infonavit Total: Infonavit, but with majority of funds coming from commercial banks 2 ~5% for the period from 2011 to 2015, 3M as of Mar was ~1% as a result of changes in 2017 policies where housing subsidies were reduced by 30% 3 'Desarrollos Certificados' have priority access to subsidies 7

9 Vinte s Business Model vs. Comparables in Mexico Due to an important reduction in housing subsidies granted in Mexico during 1Q 17, the homebuilding sector was able to grow significantly its unsubsidized sales partially or totally making up for the decrease in sales with subsidies Houses (1Q 17, # of houses) Sales growth (1Q 17 vs 1Q 16, %) EBITDA growth (1Q 17 vs 1Q 16, %) Net Income growth (1Q 17 vs 1Q 16, %) Market capitalization (Ps. mm) As of May 17 th, 2017 With subsidies Without subsidies 2,654 1,620 21% 75% 79% 25% IQ'16 IQ'17 4,613 4,224 51% 20% 49% 80% IQ'16 IQ'17 2,934 2,142 IQ'16 IQ'17 2,729 2,311 37% 7% 63% 93% IQ'16 IQ' % 2% 70% 98% (29.6%) (4.0%) (10.4%) 3.4% 3.1% (22.7%) (32.4%) (27.3%) 2.1% 0.2% (21.1%) % / Sales from houses titled IQ'16 From losses to earnings (40.7%) (7.1%) 3.2% 3,464 3,359 N/A 8,025 4,975 IQ'17 Source: Company information and reported information from each public Company 8

10 Vinte builds communities that increase in value over time with diversification, flexibility and a 3... replicable business model

11 Continued Housing Deficit Effective Demand Build-up 2016 vs. Supply 2016 (for new homes) ('000s) 609 Demand Analysis Supply Analysis Potential Demand with Access to Mortgages (1) ('000s) Current housing deficit is estimated at 8.9 million homes (268) (44%) (270) (44%) 158 (312) Reduction in inventories (262) (in addition to the 268k) Household formation 2015 Enter deficit for lack of access to mortgages financing (informal) Household formation with access to mortgages Entering Deficit Families exiting deficit that can acquire a home Secondary and others (1) Acquisition /out mortgage Effective Demand 2015 Source: SHF 2010, SHF 2015 'Demanda de Vivienda 2015' and Strategy& Note: 1 includes housing mobility and secondary uses Supply 2015 Supply 2015 Demand 2015 Entering deficit due to insufficient supply E 2030E Household Formation Exiting Deficit Secondary Acquisition w/out mortgage 10

12 Land Reserve Management Titled Homes and Land Reserve for homes Titled Homes Land reserve T 17 Monterrey 825 Analysis Committee for Land Reserve Acquisition ( CAART ) 1 Structured acquisition process that takes approximately 90 days More than 20 people involved in the purchase decision Zone Description Puebla 34 4,388 Cancun ,864 2 Market Analysis Tula ,411 Queretaro ,920 Playa del Carmen ,818 Pachuca ,437 State of Mexico , ,275 1,299 1,520 1,365 1,630 1,985 1,618 1,522 5,084 Total ,107 1,150 1,797 2,018 2,359 2,698 3,165 3,881 4,265 4,236 31,747 3 Technical Analysis 4 Judicial Analysis 5 Financial Analysis / Business Plan All of Vinte's land reserves are recorded at cost in the Balance Sheet and does not include JV's with third parties (1). Part of Vinte's reserves' market value are estimated at 2.6x (2) book value Source: Company information Note: 1 Excludes JV in Ciudad Mayakoba for 3,600 homes 2 Based on appraisals of significant sample sizes of actual land 11

13 Total Debt Undrawn Available Credit Lines Financing Strengths: Long term, 45% at fixed rate and 100% from solid and diversified sources Total Debt $1,270 mm* ($ mm as of June 30 th, 2017) Vinte 14 Public Debt Issuance Access to Committed Lines of Credit $2, ($ mm as of June 30 th 2017) Other Commercial Banks (BanBajio, Invex & Actinver) Vinte 17-1 Public Debt Issuance Debt Maturity Schedule 185 Vinte 17-2 Public Debt Issuance Avg. debt maturity of 6.2 years 45% of net debt is fixed rate, minimizing impact on potential rate hikes 100% of debt is denominated in pesos Debt balance as of June 30 th, 2017 is Ps.1,270.0mm and Ps. 1,307.9mm including factoring. Debt balance on Balance Sheet discounting issuance costs under IFRS is Ps.1,236.9mm $1,270 2Q 2017 $20 $80 $360 $60 $60 $315 $0 $ % of signed undrawn credit lines are long term Undrawn available lines/ signed lines = 44% Source: Company Information 12

14 2 nd Semester Estimates in line with our Guidance for 2017 Income Statement (Ps. mm.) 2017 Budget 1S 17 2S 17e Houses (units) 4,550 1,943 2,607 Avg. Price (MXN 000) Revenues 3,165 1,269 1,896 Subsidies represented 13% of the Company s revenues in 2S2016 vs. 26% in 1S2016 Vinte will launch 6 new projects in the mid-to-high income segments during the 2S2017. EBITDA Net Income Vinte 2017 Focus Generating positive Cash-flow (post-ipo proceeds investment) Prioritizing profitability over volume growth Focusing on selling homes with a price range from Ps. 500k to 2.0 million Maintaining moderate leverage levels (<2.0x Total Debt / EBITDA) Ensuring access to long term financing with an important part with fixed rate Net Income expected growth of 15% YoY Expected ROE levels ranging 18%-19% 13

15 Vinte builds communities that increase in value over time with diversification, flexibility and a replicable business model 4... focused on profitability

16 Stable Financial Position and Profitability for Shareholders Leverage (2008 LTM 2Q16) 2.67x Net Debt / EBITDA 2.67x Net Debt / Shareholders' Equity 1.87x 1.90x 1.90x 1.88x 1.90x 1.88x 1.87x 1.58x 1.65x 1.58x 1.35x 1.18x 1.35x 1.08x 0.96x 0.96x 1.21x 0.86x 0.86x 0.78x 0.69x 0.69x 0.78x 0.71x 0.71x 0.63x 0.63x 0.50x 0.50x 0.46x 0.46x 0.46x 0.29x LTM Jun'17 Working Capital Turnover (including long-term real estate inventories) 1.31x 1.22x 1.07x 1.06x 1.04x 1.03x 0.97x 1.02x 0.83x 0.76x ROE & ROIC (%) 22.4% 22.1% ROE & ROIC ~20% since % 27.5% 26.2% 27.3% 24.7% 23.6% 22.1% 20.0% % 22.9% % 23.4% 23.3% 21.7% % % 21.4% 18.7% LTM Dividends / Net Income: ROE ROIC Jun'17 Free Cash Flow from Operations (Ps. mm) IFC Investment: 108 mdp 2016 Dividend Yield = 3.3% 0.0% 7.4% 6.0% 6.2% 7.9% 19.0% 25.0% 50.0% 45.0% CII Investment: 108 mdp IPO IPO: 610 mm primary proceeds (119) (44) (41) Includes ADOCSA / La Vista acquisition for 300mdp in IVQ 16 and 154mdp in IQ 17 with IPO proceeds (188) LTM Jun'17 Working Capital Turnover= Revenues / (Accounts Receivable + Real Estate Inventories Accounts Payable & Advances from customers Notes: 1 Working Capital Turnover = Sales/ (Accts. Receivable + Total Inventories Acct. Payable and Client Prepayments) 2 Operating Free Cash Flow excludes net financial costs, taxes and dividends (264) M Mar' , negative Free Cash Flow due to investments/ipo 15

17 Vinte builds communities that increase in value over time with diversification, flexibility and a replicable business model focused on profitability for shareholders 5 and business institutionalization

18 Vision of Transcendence with Recognized Institutions First Company acquisition 8-year credit facility of Ps.700 mm 8-year credit facility of Ps.300 mm 7 and 5-year facilities for Ps.300 and 350mm IPO Local + Reg-S 5 founding partners with complementary experience Auditor since the beginning of operations in 2003 Short term financing through Sofoles Acquired a 10% stake and extended a 7-year credit facility 5-year credit facility ,107 1,150 $650 $116 3 to 6 year credit facilities 3 bond issuances with PCG of 2011 (1) ,797 / MX A- and A+ / HR A+ and AA+ 2,018 $988 $1,107 2,359 $1,331 CII (IDB) acquired a 5% stake 5-year bond issuance in w/ partial guarantee from: (June 2014) 10 complementary Board Members, including 4 independent ,698 $1,560 3,165 $1,881 Upgrade and Positive Outlook from HR Ratings and S&P Long term unsecured debt with ICBC 5 and 10 year bond issuance with variable and fixed interest rate totaling Ps.500 mm and with A+ credit ratings ,881 $2,307 4,265 4,236 $2,569 $2,752 $191 $227 $268 $302 $358 $480 $581 $ Titled Homes Sales EBITDA Homes Sales 3.2x EBITDA 4.4x Notes: 1 Start of coverage from rating agencies in Ratings are for current issuances (corporate and Vinte14) 2 CAGR based on Sales 17

19 Institutional and Complementary Corporate Governance Board of Directors operating for 5 consecutive years with independent directors Board of Directors Sergio Leal Aguirre Rene Jaime Mungarro Carlos Cadena Ortiz de M. Antonio Zuñiga Hernández Jose Soto Montoya Domingo Valdes Diaz Alfredo Nava Escarcega Carlos Salazar Lomelin Hector Treviño Gutierrez Ramiro Villarreal Morales Manuel Oropeza Fuentes Chairman (CEO) Board Member (COO) Board Member (Institutional Relations) Board Member (Director of Production) Board Member (Director of Design and Innovation) Board Member (CFO) Secretary of the Board (Investor Relations and Corporate Financing Officer) Independent Board Member (Femsa CEO) Independent Board Member (Coca-Cola Femsa CFO) Independent Board Member (Cemex Chief Legal Counselor) Management Team Independent Board Member Audit Committee Societal Practices Committee Institutional Relations Carlos Cadena CEO Sergio Leal Production / Construction Antonio Zuñiga Manuel Oropeza Fuentes President Hector Treviño Gutierrez Ramiro Villareal Morales Independent Independent Board Member Board Member Manuel Oropeza Fuentes President Hector Treviño Gutierrez Independent Board Member Ramiro Villareal Morales Independent Board Member Highly experienced and complementary management team Design/ Innovation Jose Soto CFO Domingo Valdes COO Rene Jaime 18

20 Vinte s integral strategy since listing on the stock exchange 1. IPO s book mainly formed with institutional investors, with a long term vision and a good understanding of the Company s profile 2. Analyst coverage Initiated and maintained analysts recommendations from Actinver, Citi y UBS Institution Analyst Target Price Recommendation Actinver Ramón Ortiz Reyes rortiz@actinver.com.mx Ps Buy Citigroup Alejandro Lavin alejandro.lavin@citi.com Ps Neutral UBS Marimar Torreblanca marimar.torreblanca@ubs.com Ps Buy 3. Creating a positive momentum Improved outlook and credit rating from S&P and HR Ratings respectively Improved credit risk and appetite from banks due to IPO capitalization 4. Share Repurchase Program Helping the share price represent its actual value 5. Improved communication with actual and potential investors and continued compliance with the National Banking and Securities Commission (CNBV) and Mexican Securities Market Law (LMV) including financial reporting, corporate presentations, conference calls and Investor Relations webpage Hired an Investor Relations Agency Continued communication with potential institutional investors with a long-term profile 19

21 Q&A 20