powerpoint presentation - globalri...psv of r$ 39 bn (100%) and r$ 35.3 bn (%cbr) in 1q19. 75% of...
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Presentation
HeritageSão Paulo - SP
Cyrela
Overview;
History;
Strategic focus;
Operational figures;
Financial indicators;
Portfolio.
AGENDA
2
Cyrela
Overview;
History;
Strategic focus;
Operational figures;
Financial indicators;
Portfolio.
AGENDA
3
CYRELA AT A GLANCE
Leadership position in the industry More than 50 years of history ~ 2.500 employees (construction + administrative) More than 200,000 clients Receivables – R$ 4.2 billion (As of June 2019)
66% 5%*30%
Free-float Founders Top Shareholders
26.0%36.9%
4
• National Scale: brAAA• Global Scale: BB-• Outlook: Stable.
• National Scale: Aa3.br• Global Scale: Ba2• Outlook: Stable.
Solid group with extensive experience in the industry Shareholders’ structure
Geographical footprint (Launches) of 6M19 Rating
* Free-float includes Top Shareholders
12.1%
75.5%
2.4%
São Paulo
Rio de Janeiro
São Paulo - Other
5.2%
South
4.9%
Others
Cyrela
Overview;
History;
Strategic focus;
Operational figures;
Financial indicators;
Portfolio.
AGENDA
5
SOLID TRACK RECORD
Cyrela is foundedas a land brokerin São Paulo; Expansion to Rio de
Janeiro and other states;
Cyrela’s IPO;
Spin-off of Properties Division ( Cyrela Commercial Properties);
1st debenture offering (out of a serie of 6 debentures);
1st receivables back securities (CRI’s) offering (out of a serieof 8 CRI’s);
Launch of facebook sales channel;
8th CRI’s emission.
10th debenture offering;
60’s 80’s and 90’s ´00-’10 ´11-´18
Vertical integration;
Land broker
Developer
Cyrela becomes listed company.
Foundation Integration Expansion Consolidation
6
Dividend payout: approximately 25% of its adjusted net income
Internal committees in line with the best corporate governance and risk mitigation practices
Corporate governance practices, based on principles that privilege transparency
Business management. Follow-up and accountability models are based on strict ethical principles
Board of directors made up of at least 5 members
At least 20% should be independent members
Ensure at least 25% of the total stock is available for trading
Adopt public offer procedures that favor the shareholding dispersion
Minimum standards for quarterly disclosure of information
Stock option programAllow the company and its subsidiaries to
attract and retain Eligible Persons
Transparency
Independent and strong board of directors
1st
homebuilder listed on Novo
Mercado
Clear internal politics
Well defined key business
process
Align shareholder
interests
Organic growth
Key internal process control
Focus on key segments (income profile)
Solid financial discipline
Focus on profitability over growth
CORPORATE GOVERNANCE & STRATEGY
1 Source: Cyrela
7
Strategy
Corporate Governance
Nationwide presence in Brazil
CYRELA HIGHLIGHTS
Leadership position in the industry and key markets
Fully integrated real estate company(from land acquisition to selling)
Exposure to all customer segments
Fully professionalized management team with deepindustry
Solid balance sheet (largest real estate company in Brazilby market cap)
Expertise in designing innovative projects
Strong Brand: prize Top Imobiliário 2018 (Real estateDevelopment and Construction), Brazilian leaders 2017
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1
3
4
5
6
7
8
2
RECENTS AWARDS
The Customer Relationship area won the "Best Companies in Customer Satisfaction Award" in 2018 - Instituto Mesc
Mr. Elie Horn was honored at the 24th “Prêmio Master Imobiliário” of 2018 in the "Hors Concours" category for his workwith the “Instituto Cyrela” for Early Childhood and TeenageEducation.
The company got the Most Respect to Consumers Award 2018 -Modern Consumer.
Cyrela was recognized as one of the 100 Most InnovativeCompanies in IT Use by “IT Mídia 2018”. The winning projectwas CashMe, our Home Equity’s Fintech.
In 2018, Cyrela won the 3rd place for Incorporation category and6th place in Construction category for the “Prêmio Top Imobiliário”.
Cyrela is in Valor Econômico newspaper’s as 100 most innovative companies of “Anuário Inovação Brasil” Ranking. It ranks 4th in the Engineering, infrastructure and Logistics category, standing out for the implementation of processes to shorten deadlines, cut down on waste and increase productivity at work.
Internal
SUSTAINABILITY PRACTICES – SOCIAL INITIATIVES
External
Improvement of well beingof Cyrela workers and
their families
Eliminate illiteracy among Cyrelaworkers
Increase family income throughprofessional training for worker’s
wives
Professional training for youngrelatives of workers
Positive impact in local communities
Cyrela institute (vehicle for workingwith NGOs and developing
programs)
First professional experience for young adults from low income
communities
10
Objectives Examples os initiatives
Objectives Examples os initiatives
Sustainability and acessibility handbook
Sustainable Production
Environmental policy for suppliers
Benchmark in waste management
Recycling Program
CarboboNeutro® Program
Eco-efficiency guidelines for projects:
Selective waste collection
Water-saving devices
Collection of used batteries
Individual water and gas meters
Power-saving devices
Oil collection for recycling
Optimization of resources
Acessibility
Bicycle parking lot
Waste management
Technological development
Nature-friendly construction
Cyrela moves foward in defining integrated eco-efficient actions.
SUSTAINABILITY PRACTICESENVIRONMENTAL INITIATIVES
11
Distinctive environmentally-friendly practices
Cyrela
Overview;
History;
Strategic focus;
Operational figures;
Financial indicators;
Portfolio.
AGENDA
12
Execution Cost control Systems and process improvement Corporate Engineering Bonus – focus on deliveries
Company Longevity Leader’s development Meritocracy Cyrela’s cultura
Financial Discipline Focus on margin “Cost Culture” Leverage Reduction
Back to Cyrela “DNA” Focus on mid to high-end products Living as a brand MCMV through Cury
BACK TO BASICS...PROCESS THAT STARTED IN 2010
Governance Commitees Processes and policies
Back to Basics
13
Back to Basics
PartnershipsStartups
Closing / Acquisition
Final Position
2006 2007 2008 2009 2010 2011 ... 2017 2018
5 11 11 9 7 4 ... 5 5
REDUCTION IN THE NUMBER OF JV’S, KEEPING THEONES THAT ARE IN LINE WITH CYRELA’S STRATEGY
SHIFT IN STRATEGY HAS ALREADY TRANSLATED INTOMORE ORGANIC OPERATIONS
Cyrela’s share in projects (%) Cyrela’s share in construction site management (%)1 2
1 Share in projects launched 2 Cyrela + JV’s15
92%
96%
96%
93%
95%
81%
60%
47%
34%
28%
0.0% 100.0%20.0% 40.0% 60.0% 80.0%
2014
2018
6M19
2017
2016
2015
2013
2012
2011
2010
+80.0%+60.0%0% +20.0% +40.0% +100.0%
2016
6M19
2018
2017
2015
2014
2013
2012
2011
2010
75%
83%
68%
70%
81%
83%
70%
69%
79%
77%
Company should keep working with partners on development
Cyrela has been focusing on using own engineering
GROSS MARGIN
Cyrela expects the gross margin to grow in a sustainable pacegoing foward
16
32,8%34,7%
39,8%
28,7%
24,6%
28,3%
25,1%
31,3%
Gross Margin Gross Margin EX Ret / Riserva Golf
ECONOMIC CYCLES
Fonte: Banco Central do Brasil
Interest
Unemployment
Trust
Mortgage
Deliveries
Cancellations
Savings
Inventories
Mortgage
Availability
Prices
2014 - 2017
2018-2019
Slowly Recovering
Cancellations Inventories Prices
Interest
Mortgage
Trust
Unemployment
Deliveries
Launches
2014
MORTGAGE RATE INCREASE BRINGS MORE SALES CANCELLATION
2016
Unit value
Interest Rate (TR+)
Loan term
1st installment - SAC
Monthly Income
R$400,000
9% p.y
35 years
R$ 3,068
R$ 12,273
R$400,000
11.5% p.y
35 years
R$ 3,678
R$ 14,712
+2.5%
+20%
ExampleAssumptions: Loan-to-Value 80% (LTV)
25.0% 25.0%
18
Income Comitment
2018
R$400,000
9% p.y
35 years
R$ 3,126
R$ 12,505
25.0%
For each 1% increase (decrease) in interest rate, the monthly income must rise (fall) by
aproximately 8%.
- 15%
-2.0%
RECOGNIZED BRANDS AND DIVERSIFIED PROTFOLIO
19
Financial strenght, credibility and entrepreneurship
JV’s
SPRJSUL
THE WAY CYRELA PLAYS IN THE REAL ESTATE MARKETUSING AN INTEGRATED BUSINESS PLATFORM
20
Luxury / High End
Middle Income
Economic
Cyrela
Overview;
History;
Strategic focus;
Operational figures;
Financial indicators;
Portfolio.
AGENDA
21
PSV of R$ 39 bn (100%) and R$ 35.3 bn (%CBR) in 1Q19.
75% of landbank acquired through swaps.
(R$ billion)
LANDBANK
São PauloRio de Janeiro Others
14
8
25
Total
11
14
51
South
39 22
CH Swap agreement
22
Cyrela – Landbank (100%)
Direct employees
OPERATIONAL HISTORY
23
2010 20122011
4.8
2017
3.1
2013 2014 2015 2016 2018 6M19
8.07.7
5.66.6
5.8
2.9 2.9 2.6
+5%-11%
13.1
20162010
27.9
20122011 2013 2014 2015
8.4
2017 2018 6M19
26.4 27.6
7.3
26.1
9.0
23.4
9.7
+1%
-25%
20152010 20172011 2012 20162013 2014
5.1
2018
6.0
6M19
7.26.2 6.5
5.7
3.42.8 3.3 3.0
-2% -3%
984820 740 745
201720112010 2013 2014
1,264
20182012
1,512
2015 2016
1,7281,460 1,373
+14%
-11%
Launches - PSV (R$ billion) Launched units (thd.)
Pre Sales - PSV (R$ billion)
CYRELAOPERATING RESULTS
21 projects launched in 2Q19, 09 projects launched in 1Q19 and 65 in 2018.
5.2 thd units sold in 2Q19, 3.3 thd units sold in 1Q19 and 14.5 thd in 2018.
24
6.6
7.9
4.64.5
5.6
20112010
5.7
1.7
6.0
1.6
0.76.3
1.7
3.9
2013 20182017
2.0
2014
2.2
2.9
1.0
4.9
2012 2015
0.5
1.2
2016
2.2
6M19
0.9
2.12.4
7.6
5.8
2.9 3.12.60.5
Partners CBR
2010
5.3
2011
5.11.6
1.2
2.6
4.4
2.2
2012
2.1
2.1
5.1
2013
1.0
20152014
0.80.6
2016
4.70.9
2.4
5.7
2017
1.4
6.5
1.6
3.54.8
2.80.8
6M19
6.2
2018
7.2
3.4 3.33.0
6.0
Launches - R$ Billion Pre-Sales - R$ Billion
SALES
(R$ billion)
25
Rio de Janeiro
57.7%
São Paulo - Other Cities
São Paulo 7.0%
11.2%
14.0%
South
10.1%
North and Other
20172015 20182011
3.3
2010 2012 20162014
3.0
7.2
2013 6M19
6.2 6.5 6.0 5.7
3.42.8
5.1
-2%-3%
2Q18
52.7%
2Q193Q18
45.1%
4Q18 1Q18
37.9% 39.4%
49.6%
Pre Sales - PSV (R$ billion) Sales per Region
Sales Speed - 12M
SALES SPEED The SOS12M of 2Q19 attained 57%.
Pre – Sales(R$ million)
Sales Speed
391 499 695 878487 313
726459
931 666
1.357
2Q192Q18 6M18 6M19
1.061
211
1.9171.674
2.961
+80,7%
+76,9%
57%
5%
51%
3Q18
3%
77%
6%
82%6%49%
2Q18
4Q18
6%14%
51%
8%20%
2Q19
9%
26%
66%
1Q19
57%
81%
79%
In 15 monthsIn 6 monthsIn 3 months In 9 months
In 12 monthsHigh endMiddleMCMV 2 and 3
INVENTORIES
27
Inventories – Market value (R$ MM) Inventories – Delivery date
992962 906
2Q18 3Q18 2Q19
4,536
4Q18 1Q19
% CBR
5,789 5,574 5,6645,019 5,211
1,128
4,769
1,020
4,582 4,057 4,305
• R$ 5,211 billion in inventories (R$ 4,305 billion %CBR) in 2Q19.
28
TOTAL INVENTORY
Inventory under construction Finished inventory
Change in Inventory Inventory Breakdown – 1Q19
(R$ million)
Launches 2Q19
-242
Inventory 1Q19
2,087
Sales of inventories
-486 -1,189
Sales of launches
2Q19
22
Price change
5,211
Inventory 2Q19
5,019
-728
+3.8% South
São Paulo
Rio de Janeiro
São Paulo - Other Cities
12.8%
Others
47.8%
20.7%
11.7%
7.0%
Increase of 3.8% in total inventory, from 5,019 million in 1Q19 to 5,211 million in 2Q19
R$2,216 million of finished units inventories (vs. R$2,493 million in 4Q18).
Finished Units(R$ million)
Breakdown
FINISHED UNITS
Price change
Finished Units 4Q18
-275
Sales of finished
units
58
PSV Delivered
-59 2,216
Finished Units 1Q19
2,493-11.1% São Paulo
São Paulo - Other CitiesRio de Janeiro
South
24.6%
Others
38.5%
16.2%13.8%
6.9%
3,015 units delivered in 2Q19, in 12 projects, all are from the High End, Middle + MCMV segments.
The units delivered in the quarter represent launches PSV of R$832 million.
DELIVERED UNITS
11.6
2016
13.2
2013
2.7
6.5
10.2
5.3
0.6
6.5
2014
9.1
6.6
8.3
2015
4.3
6.8
6.5
4.1
9.0
2017
19.5
2.13.3
8.9
2018
3.9
6M19
25.0
20.8
24.021.3
14.3
High endMiddleMCMV
357
174
46183
2Q19
466 640270
1,587
287
2Q18 6M18
832
521
2,145
1,189
6M19
3,150
755
1,875
229320
1Q19
+133% -61%
-62%
Delivered PSV
(R$ million)
Delivered Units
(thd units)
AGENDA
Cyrela
Overview;
History;
Strategic focus;
Operational figures;
Financial indicators;
Portfolio.
31
(R$ million)
171293 249 296
542
26,8%31,3%
30,1%
27,2%
2Q18 2Q19 6M196M18
30,7%
+71,0% +9,0%+83,0%
Gross Profit and Gross MarginNet RevenueMargin
11448
-80
162
1Q19-7.3%
12.2%
-4.4%
-28
2Q18 2Q19
5.9%
6M18
9.2%
6M19
Net Income and Net Margin
640937 826
1.090
1.763
6M182Q18 2Q19 1Q19 6M19
+46,5% +13,4%
+61,7%
FINANCIAL RESULTS
COVENANTS
<= 0,80TOTAL DEBT+ PROPERTIES PAYABLE - SFH DEBT - DISPOSALS
EQUITY
RECEIVABLES + PROPERTY FOR SALE
NET DEBT - PROPERTIES PAYABLE - UNRECOGNIZED COSTS AND EXPENSE>= 1.5 or <0
0,16
0,05
-0,08
-0,02
0,09
0,07
4,245,45
9,0710,64
8,90
5,22
4,93
RETURN ON EQUITY
Return on Equity (net income LTM / Average Shareholders’ Equity LTM ex - minorities) attained 2.9% 2Q19.
34
3Q182Q18
-0.7%
1Q194Q18 2Q19
-1.6%
-2.7%
0.3%
2.9%
LIQUIDITY AND DEBT Net Debt / Equity attained 8.3%.
Debt(R$ billion)
1.1
1.3
1.5
Gross Debt 2Q18
Gross Debt 1Q19
1.5
0.6 0.5
Gross Debt 2Q19
0.3
1.7
Term
1.5
2.0
Cash and Cash
Equivalents
Net Debt
2.42.1 2.0
0.5
Corp.Corp. Corp.
Short
Financ
Long
201720162014
32.8%
18.8%22.2%
2015
25.1%
14.8%
2018
8.3%
6M19
Net Debt / Equity
Indicators Total Debt
CorporateDebt
Net Debt/ Equity 8.3%
Average Cost Corporate: 108.6% CDIFinancing: TR + 8.1% p.y.
Duration 2.8 y 2.7 y
Short Term 14% 15%
Long Term 86% 85%
FinancFinanc
CASH GENERATION*(R$ million)
Cash generation of R$ 196 million in 2Q19.
*Ex dividend payment, buyback program and stake acquisition.
181
(R$ million)
2Q182Q191Q19 2Q19
181
150
196 196
31% 8%
BUSINESS, CASH FLOW AND ACCOUNTING CYCLES
1 Source: Cyrela 2 Note: (1) Cycle I: In terms of % VGV of one project; Cycle II in terms of % revenues related to one project
Land swap or acquisition
Development12-24 months
Sales & Construction36 months
Consuption of 15% in case of acquisition
Low cash comsuption 5% cash recovery Recovery of 25%
- - -Revenues as percentage of completion method
Delivery3 – 12 months
Final 70% of VGV
100% of revenues recognized
Launch
3% consumption due to marketing
3% of revenue recognition
Cash Flow
Accounting
70%
(15%)
0%
100%
Cash flow
Accounting
Business cycle
37
Cyrela
Overview;
History;
Strategic focus;
Operational figures;
Financial indicators;;
Portfolio.
AGENDA
38
MANDARIMSÃO PAULO (2006)
The tallest residentialbuilding in latin america (2006);
Ballroom on the 41st floor;
First project with differenttypologies in the same building;
CIRAGANSÃO PAULO (2007)
First project to aggregate a residencial and a commercial
tower in the same project
PARQUE ALFREDO VOLPISÃO PAULO (2007)
Very luxury product, with unit prices over US$ 5 mi
JK 1455SÃO PAULO (2009)
LE PALAISRIO DE JANEIRO (2010)
Architecture inspired by two historical buildings in thecomplex;
The historical buildings were restored and adapted for the leisure areas;
CENTRAL PARK MOOCASÃO PAULO (2010)
First mover in a industrial area of São Paulo (Mooca) Innovative product, creating a park inside the project
All of its 560 units were sold in 10 days
LE PARCSALVADOR / BAHIA (2012)
Largest Cyrela’s project; 18 towers, 1.138 units; PSV of R$ 1 billion (2013 value);In the middle of the project, there is a 10,000 sqmt leisure facility.
RISERVA GOLFRIO DE JANEIRO (2014)
Unique project in Barra da Tijuca; 2016 Olympics golf course; Average sqm. Price: from R$ 25 thd to R$ 30 thd.
CYRELA BY PININFARINASÃO PAULO(2014)
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Unique project in São Paulo (Vila Olímpia); Price per sqm.: R$ 25 thd
ONE SIXTYSÃO PAULO(2015)
HERITAGESÃO PAULO(2017)
RIO BY YOORIO DE JANEIRO
IBIRAPUERA BY YOOSÃO PAULO
CONTACT IR
Cyrela Brazil Realty S.A. Empreendimentos e ParticipaçõesAv. Brigadeiro Faria Lima, 3.600 – 12th FloorSão Paulo - SP – BrasilZip Code 04538-132
Investor RelationsPhone: (55 11) 4502-3153 [email protected]
www.cyrela.com.br/ir
Statements contained in this press release may contain information which is forward-looking and reflects management'scurrent view and estimates of future economic circumstances, industry conditions, company performance and thefinancial results of Cyrela Brazil Realty. These are just projections and, as such, exclusively based on management'sexpectations of Cyrela Brazil Realty regarding future business and continuous access to capital to finance the Company'sbusiness plan. Such future considerations rely substantially on changes in market conditions, government rules,competitor's pressure, segment performance and the Brazilian economy, among other factors, in addition to the riskspresented on the released documents filed by Cyrela Brazil Realty, and therefore can be modified without prior notice.
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