Discussion Material - 2016 March, 2017
Disclaimer This document may contain prospective statements, which are subject to risks and uncertainties as they were based on expectations of the Company s management and on the information available. The Company has no obligation to update said statements. The words "anticipate, wish, "expect, foresee, intend, "plan, "predict, forecast, aim" and similar words are intended to identify statements. Forward-looking statements refer to future events which may or may not occur. Our future financial situation, operating results, market share and competitive positioning may differ substantially from those expressed or suggested by said forward-looking statements. Many factors and values that can establish these results are outside the Company s control or expectation. The reader/investor should not make the decision to invest in Multiplan shares based exclusively on the data disclosed on this report. This document also contains information on future projects which could differ materially due to market conditions, changes in law or government policies, changes in operational conditions and costs, changes in project schedules, operating performance, demand by tenants and consumers, commercial negotiations or other technical and economic factors. These projects may be altered in part or totally by the company with no previous warning. For more detailed information, please check our Financial Statements, Reference Form (Formulário de Referência) and other relevant information on our investor relations website ir.multiplan.com.br. Note: All financial figures presented are in Brazilian Reais (R$). 2
Multiplan at a Glance High Productivity Portfolio Recognized developer of top-of-mind shopping centers in regions with the largest GDP in Brazil; Full service Company that plans, develops, owns and manages one of the most efficient shopping center portfolios in the country; Long-term planning including expansions and mixed-use projects; Top line growth and efficiency gains leading to a strong 5-year CAGR 1 of 13.6% in NOI and 12.4% in EBITDA. A Seasoned 42-year Company Proven track record in the real estate industry; Management and control of its shopping centers, allowing great flexibility to implement improvements; 18 shopping centers with an average interest of 75.9% and 775,575 sq.m. of total GLA 2, besides 2 office towers for lease. Historical growth strategy breakdown (% of total GLA 2 ) Acquisitions 5% Offices for lease 10% Greenfields 65% Expansions 20% Interest, management and control in properties Value Creation Market capitalization of R$11.3 billion 3, the largest among publicy traded real estate companies in Brazil; 97.5% of average occupancy rate; 5-year contracts, adjusted by inflation; Development DNA: developed 95% of total GLA; Potential mall expansion pipeline of over 150,000 sq.m. of GLA; Landbank of 820,519 sq.m. to develop mixed-use projects. 19/20 19/20 Managed properties 4 Properties with interest of 4 50% or more 77.6% Portfolio ownership 1 CAGR: Compound Annual Growth Rate. 3 GLA: Gross Leasable Area. 2 Share price of R$59.38 on December 31 th, 2016 (Bloomberg). 4 Over Company s properties (18 shopping centers and 2 office towers). 5 % of Gross Leasable Area of shopping centers and office towers. Source: Multiplan 3 5
Properties Portfolio Multiplan s Portfolio Footprint: Portfolio s Market Share: Total GLA (2016) Tenants Sales (2016) AL Other Shopping Centers 94.9% 5.1% Other Shopping Centers 91.3% 8.7% DF MG SP PR RJ Multiplan s Portfolio Size: States Exposed to: RS 18 Shopping Centers 776 thousand sq.m. of GLA 54% of country s population 72% of country s GDP Source: Multiplan,IBGE (2010) and ABRASCE 4
1 Operating Efficiency Tenants sales: Multiplan & USA malls Tenants sales USD/sq.f. ³ (satellite stores only) - 2016 Operating efficiency: Multiplan & Brazilian malls Tenants sales USD/sq.f.³ (anchor + satellite stores) - 2016 Rental Revenue USD/sq.f.³ (anchor + satellite stores) Sep-16 (LTM) 472 +53% 723 295 +92% 566 24 +73% 41 USA malls¹ Multiplan's malls Brazilian malls² Multiplan's malls Brazilian malls² Multiplan's malls Multiplan (Dec-2016) Store Segment GLA Distribution USA (Sep-2016) 4 Food Court & Gourmet Area 11.2% Home & Office 8.5% Apparel 35.9% Food Court, Gourmet Area and Minimarkets 21.0% Home & Office 7.0% Apparel 50.0% Miscellaneous 21.3% Miscellaneous 11.0% Services 1 Source: ICSC International Council of Shopping Centers 23.1% 2 Source: Abrasce Associação Brasileira de Shopping Centers. 3 2016 final Exchange rate of R$3.2585 / US$ (Bloomberg). 4 Source: ICSC International Council of Shopping Centers and JLL Jones Lang LaSalle. Services 11.0% 5
7.2 B 6.2 B 5.2 B 4.2 B 3.2 B 2.2 B 17. 0 B 16. 0 B 15. 0 B 14. 0 B 13. 0 B 12. 0 B 11. 0 B 10. 0 B 98.0% 97.9% 97.6% 97.4% 2016 Preliminary Operating Performance Tenants Sales and Shopping Center Occupancy Rate Total tenants sales (R$) Same Area and Same Store Sales (year/year) 12.0% 12.0% 9.7% 9.5% 9.4% +2.9% 9.7% 9.5% 9.4% +3.0% 13.7 B 7.4% 8.8% 7.7% 8.0% 9.3% 8.8% 7.4% 8.8% 7.7% 8.0% 9.3% 8.9% 8.8% 9.0% 6.7% 13.3 B 6.7% 7 5.7% 5.7% 5.7% 5 4.2 B 4.4 B 3.9% 8.2% 8.1% 8.5% 6.8% 8.1% 8.4% 7.6% 8.3% 2.8% 9.4% 2.7% 3.9% 4.2% 8.2% 8.1% 8.5% 6.8% 8.1% 8.4% 7.6% 8.3% 9.4% 4.2% 4.1% 8.4% 7.4% 7.9% 5.8% 6.1% 7.9% 5.8% 6.1% 7.9% 3.2% 2.5% 3.3% 3.3% 4.3% 1.2% 0.6% 2.1% 1.6% 2.1% 1.6% 2.3% 2.8% 1Q12 4Q15 2Q12 3Q12 4Q12 2015 1Q13 2016 1Q12 2Q132Q12 3Q133Q12 4Q134Q12 1Q14 4Q15 1Q13 2Q14 1Q16 2Q13 3Q14 2Q16 3Q13 2012 4Q14 3Q16 4Q13 2013 1Q15 1Q14 2Q15 20142Q14 3Q15 20153Q14 4Q15 2016 4Q14 1Q161 1.5% 1.8% 1.9% Same Area Sales Same Area Sales Same Store Sales Satellite stores sales/sq.m. (R$) Shopping center occupancy rate +1,675 +777 +716 27,106 97.3% 23,938 +13.2% 2013 2014 2015 2016 2016 4Q15 1Q16 2Q16 3Q16 Source: Multiplan 6
2016 Preliminary Operating Performance Tenant Mix Management Turnover in GLA and as % of total GLA (%) 5.2% 5.1% 4.8% 4.3% 4.3% 35,438 34,001 31,003 35,438 34,001 30,727 31,003 2.1% 1.9% 30,727 1.7% 1.3% 5.1% 3.9% 36,491 27,613 2.4% 6.0% 5.0% 4.0% 3.0% 2.0% 1.0% 2012 2013 2014 2015 9M16 2012 2013 2014 2015 2016 Turnover GLA (m²) Turnover (%) Vacancy (%) SAS and SSS spread (%) 1.5% 1.1% 1.4% 0.5% 0.1% 2012 2013 2014 2015 2016 SAS and SSS Spread (%) 38,8% 37,1% 48.6% 22,4% 22,6% 33.1% Breakdown of the mall GLA turnover by retail segment 2016 38,8% 37,1% 2007 2015 38,8% 37,1% 22,4% 22,6% 20,9% 21,1% 15.5% 2007 2015 2007 2015 18.8% Out In 20,9% 21,1% 22,4% 22,6% 20,9% 21,1% 10,7% 8,0% 10,7% 10,0% 8,0% 25.3% 8,6% 10,7% 8,0% 30.3% Apparel Services Miscellaneous Food Court & Apparel Services Miscellaneous Food Court & Home & Office Gourmet Area Apparel Services Gourmet Area Miscellaneous Food Court & Gourmet Area 10,0% 8,6% 10,0% 8,6% Home & Office Home & Office 5.7% 38,8% 37,1% 11.4% 5.5% 5.8% 22,4% 22,6% 2007 2015 20,9% 21,1% Source: Multiplan Apparel Food Court & Gourmet Area Miscellaneous Services Home & Office 7 8,0%
% of Rental Revenues Diversified Revenues Gross revenue breakdown in 2016 Rental revenue diversification: Top retail chains in 2016 Parking 15.2% Key Money 1.1% Services 9.5% Others 0.3% Rental Revenue 73.9% Merchandising 7.1% Base Rent 89.7% Overage 3.2% 23% 21% 19% 17% 15% 13% 11% 9% 7% 5% 3% 1% Top 10: 12.2% Top 25: 21.9% 1 3 5 7 9 11 13 15 17 19 21 23 25 Number of Retail Chains Same Store Rent growth (YoY) Average Real SSR 9.6% 10.6% 9.4% 6.9% 14.1% 10.4% 9.6% 8.8% 5 years: 1.9% Since IPO: 3.0% 7.4% 7.1% 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 Real SSR growth 1 2.5% 1.5% 5.7% 3.0% 5.7% 5.0% 4.0% 2.5% 2.4% (2.2%) 1 Real SSR considering the IGP-DI adjustment effect in each period. Source: Multiplan 8
Strong and Predictable Revenues Rental revenue breakdown (R$) 97.4% 96.6% 96.9% 98.6% 98.2% 97.9% 98.1% 98.7% 98.3% 97.5% 929.5 M 861.6 M 801.3 M 679.0 M 561.9 M 486.3 M 416.1 M 360.2 M 88.7% 88.9% 89.7% 295.3 M 239.4 M 88.6% 84.2% 83.2% 85.8% 84.7% 86.2% 87.3% 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 Base Rent (and as % of total) Merchandising Overage Average Occupancy Rate (%) Evolution of rent loss (%) 0.7% 0.9% 0.9% 0.9% 1.3% 0.4% 0.7% 0.8% 0.7% 1.3% 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 Source: Multiplan 9
CAPEX and Net Debt/EBITDA 1,344.4 M 3.03x 3.04x 2.36x 2.44x 2.44x 952.1 M 775.0 M 301.7 M 297.2 M 2012 2013 2014 2015 2016 CAPEX Net Debt/EBITDA Debt and Cash Debt indexes on December 31, 2016 Financial Position Analysis ¹ Dec. 31, 2016 Net Debt/EBITDA 3.04x Gross Debt/EBITDA 3.62x EBITDA/ Net Financial Expenses 3.82x Net Debt/Fair Value 15.0% Total Debt/Shareholders Equity 0.67x Net Debt/Market Cap 22.0% Weighted Average Maturity (Months) 49 Debt breakdown on December 31, 2016 Others 8.1% TR 40.4% CDI 51.5% Dec-15 Others 4.3% TR 33.0% CDI 62.7% Dec-16 All of Multiplan s debt is in local currency Brazilian Reais Weighted average cost of funding vs. Selic rate (% p.a.) 12.75% 13.75% 14.25% 14.25% 14.25% 14.25% 14.25% 13.75% 11.75% 10.75% 11.00% 11.00% 13.09% 13.22% 12.81% 13.23% 13.50% 13.18% 10.00% 9.87% 10.41% 10.50% 10.54% 10.96% 11.53% 12.29% : -57 b.p. Dec-13 Mar-14 Jun-14 Sep-14 Dec-14 Mar-15 Jun-15 Sep-15 Dec-15 Mar-16 Jun-16 Sep-16 Dec-16 Multiplan Cost of Funding (gross debt) ¹ EBITDA and Net Financial Expenses are the sum of the last 12 months Source: Multiplan and BCB (Banco Central do Brasil) Selic Rate 10
Debt Amortization Schedule and Covenants Evolution of Net Debt/EBITDA Financial Covenants Covenant ¹ Limit Dec-16 Debt Volume Status Net Debt/EBITDA <= 4.00x 3.04x 1,588.6 M Comply EBITDA/Net Financial Expenses >= 2.00x 3.82x 748.3 M Comply Total Debt/Total Asset <= 0.50x 0.37x 79.2 M Comply EBITDA Margin >=20.0% 72.4% 79.2 M Comply Total Debt/Shareholders Equity <= 1.00x 0.67x 41.5 M Comply Total debt w ith financial covenants 1,667.7 M Debt amortization schedule (%) Debt amortization schedule (R$) 2017 375 M 29 M 12 M 416 M 2021 7.8% ¹ EBITDA and Net Financial Expenses are the sum of the last 12 months Source: Multiplan 2018 2017 14.0% 2019 29 M 12 M 598 M 199 M 797 M > 2021 25.4% 2017 375 M 416 M 2018 2020 200 M 199 M 399 M 12.5% CRI 2018 2 - Debentures: 358 M 12 M 369 M 2021 231 M 231 M 2019 Amount: R$300.0 M 598 M 199 M 797 M 2022 109 M 290 M 400 M Issuance date: December 2020 2019 2020 200 M 199 M 399 M 29th, 2016 13.5% 26.9% 2023 109 M 109 M Term: 6 years 2021 231 M 231 M Loans and financing (banks) Interest Payment: semianmual 2024 99 M 99 M Obligations from acquisition of goods (land and minority interest) 2022 109 M 290 M 400 M Cost: 95.0% of the CDI 2025 146 M 146 M Debentures Rating: AAA (bra), by Fitch 2023 109 M 109 M Ratings Loans and financing (banks) 2024 99 M 99 M Obligations from acquisition of goods (land and minority interest) 2025 146 M 146 M Debentures 358 M 12 M 369 M 11
New R$300 Million Issuance Real Estate Certificate Issuance (CRI) Summary Amount R$300 M Type CRI - ICVM 400 Term / Amortization 6 years, Bullet Interest Payment Every 6 months Closing December 29 th, 2016 Rating "AAA (bra)" by Fitch Ratings Guaranty 40% of BarraShoppingSul (Value: R$390 M); 130% of the Issuance amount Coordinators Itaú BBA (leader), Bradesco, Banco do Brasil and XP Investimentos Initial Cost 99.50% Final Cost 95.00% Source: Multiplan 12
NOI and stock price evolution LTM NOI (1) and stock price evolution since IPO Oct 17 th, 2012 (2) LTM NOI (3) of R$570 mn R$63.18/share Dec 31 st, 2016 LTM NOI of R$965 mn R$59.38/share NOI CAGR 2007/16: 18.8% (+371%) Share price CAGR 2007/16: 10.1% (+138%) 100 Jul-07 Jul-08 Jul-09 Jul-10 Jul-11 Jul-12 Jul-13 Jul-14 Jul-15 Jul-16 Source: Multiplan and Bloomberg as of December 31 st, 2016. Note: Multiplan s IPO was on July 2007. (1) Considers the 90 days moving average of LTM NOI. (2) The October 17 th, 2012 closing price was the highest until June 30 th, 2016. (3) NOI from Oct/11 to Sep/12. 13
10-Year CAPEX and Interest Rate Evolution Acquisition Development Capex Capex Development Acquisition and other Capex Capex Interest Rate (Selic) (% Selic rate) 16% 16% 1,600 1,200 16.00% 1,400 1,000 1,344 M 14.00% 14% 14% 1,200 1,000 800 986 M 800 600 12.00% 951 M 10.00% 12% 12% 600 400 400 664 M 689 M 725 M 8.00% (2) 10% 10% 200 200 437 M 477 M 442 M 6.00% 8% 8% - - 2006 2007 2008 2006 2009 2007 2010 2008 2011 2009 2010 2012 2011 2013 2012 2014 2013 2015 2014 9M16 2015 2017E 9M16 253 M 229 M 4.00% 6% 6% 91 M (2) 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017E 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 9M16 2017E 4% 4% 1 2017E data consider Brazil Central Bank s Mar-17 FOCUS report projection of 9.25% interest rate at the end of 2017. 2 2017E CAPEX is only considering the R$91.0 million acquisition announced in Jan/17. Source: Multiplan. 14
R$731 Million Invested in Stake Acquisitions R$59 million in NOI¹ NOI Portfolio s (LTM): R$59.0M NOI BarraShopping I MorumbiShopping BarraShopping II ParkShoppingBarigüi Stake acquired: 10.3% Stake acquired: 8.0% Stake acquired: 4.5% Stake acquired: 9.3% Stake s LTM NOI¹: R$24.8 M Stake s LTM NOI¹: R$15.5 M Stake s LTM NOI¹: R$11.5 M Stake s LTM NOI¹: R$7.2 M Purchase price: R$311.2 M Purchase price: R$184.7 M Purchase price: R$143.9 M Purchase price: R$91.0 M October 2016 October 2016 December 2016 January 2017 (1) Considering the NOI for the past 12-month period ended on Jun-16 for BarraShopping (1) and MorumbiShopping, and Sep-16 for BarraShopping (2) and ParkShoppingBarigüi, weigthed by the acquired stakes Source: Multiplan 15
Greenfield Under Construction Construction Status: Structure assembly underway 48,000 sq.m. of GLA Multiplan s Stake: 80% Opening: Nov-17 Leased GLA: 76% CAPEX (1) : R$359.3M Key Money (1) : R$26.5M 3 rd year NOI (2) : R$36.0M 3 rd year NOI yield (2) : 10.8% (1) Considering Multiplan s interest in the CAPEX of 94.7% (2) Considering Multiplan s interest of 80.0% Source: Multiplan 16
RibeirãoShopping Medical Center Expansion Pátio Savassi Expansion II Construction started in Jul-16 6,200 sq.m. of GLA Multiplan s stake: 100.0% Leased GLA: 89.0% Expected opening: 2Q17 CAPEX (1) : R$35.5M Construction started in Jun-16 2,300 sq.m. of GLA Multiplan s stake: 96.5% Leased GLA: 100.0% Expected opening: 4Q17 CAPEX (2) : R$34.9M (1) Considering Multiplan s interest in the CAPEX of 100.0%. (2) Considering Multiplan s interest in the CAPEX of 96.5%. Source: Multiplan 17
Market Penetration Share of malls in retail sales 1 2 52% 53% 54% 62% 69% 52% 53% 54 10% 11% 13% 14% 16% 17% 18% 18% 18% 19% 21% 23% 25% 28% 28% 10% 11% 13% 14% 16% 17% 18% 18% 18% 19% 21% 23% 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 FR AU MX US AS CD 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 FR AU MX U Mall penetration in the world (m² of GLA per 1,000 inhabitants ratio, 2011) 1 2 2,200 Shopping centers in Brazil (Oct-16) 1 3 Municipalities with a shopping center 203 Shopping center owned GLA breakdown in Brazil 1 4 (Sep-16) 900 1,350 Public Companies 22% 68 110 180 220 360 Municipalities without a shopping center 5,358 Others 78% 1 Source: Abrasce Associação Brasileira de Shopping Centers 2 Source: ICSC International Council of Shopping Centers (ICSC) 3 Source: IBGE Brazilian Statistics Bureau 4 Source: Multiplan and reports from the following public companies: Aliansce, Brmalls, CCP, General Shopping, Iguatemi, JHSF and Sonae Sierra. 18
Notes
IR Contact Armando d Almeida Neto CFO and IRO Hans Melchers Investor Relations and Planning Director Franco Carrion Investor Relations Manager Leandro Vignero Investor Relations Analyst Daniela Mostaert Investor Relations Analyst Tel.: +55 (21) 3031-5600 Fax: +55 (21) 3031-5322 E-mail: ri@multiplan.com.br ir.multiplan.com.br