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Company Presentation November 2013
Disclaimer
► The material that follows is a presentation of general background information about Sonae Sierra Brasil S.A. and
its subsidiaries (the “Company”) as of the date of the presentation. It is information in summary form and does
not purport to be complete. It is not intended to be relied upon as advice to potential investors and does not form
the basis for an informed investment decision. This presentation is strictly confidential and may not be disclosed
to any other person. No representation or warranty, express or implied, is made concerning, and no reliance
should be placed on, the accuracy, fairness or completeness of the information presented herein.
► This presentation may contain statements that are forward-looking within the meaning of Section 27A of the U.S.
Securities Act of 1933, as amended (the “Securities Act”) and Section 21E of the U.S. Securities Exchange Act of
1934. Such forward-looking statements are only predictions and are not guarantees of future performance.
Investors are cautioned that any such forward-looking statements are and will be, as the case may be, subject to
many risks, uncertainties and factors relating to the operations and business environments of the Company and its
subsidiaries that may cause the actual results of the Company to be materially different from any future results
expressed or implied in such forward-looking statements. No person has any responsibility to update any such
information.
► This presentation does not constitute an offer, or invitation, or solicitation or an offer, to subscribe for or purchase
any securities. Neither this presentation nor anything contained herein shall form the basis of any contract or
commitment.
2
3
Parque D. Pedro Shopping
Shopping Metrópole Manauara Shopping
Uberlândia Shopping
Index
4
4 Company Fundamentals
11 Our Portfolio
14 Growth Strategy
7 Market and Sector Fundamentals
17 Operational and Financial Indicators
• Leverage on the expertise, tenant relationships and market
recognition of our majority shareholders: Sonae Sierra SGPS and
DDR Corp (NYSE: DDR)
• Best-in-class controlling shareholders with significant experience
in the sector
• 33.4% free float
• Defined growth strategy: focus on underserved markets’ middle
class
• Secured growth: 3 recently opened greenfield projects and 3
expansions concluded almost doubling our owned GLA
• 3 other expansions already defined
• 10 shopping centers owned and managed (450k sqm total GLA)
• Occupancy rate of 97.2%(1)
• Best-in-class margins (Adj. EBITDA = 73.7% and Adj. FFO =
55.4%)
• Greenfield Expertise (84% of GLA)
• 2 third-party managed malls
5
Operating Expertise
Strong Shareholders Base
Secured Growth
• Parque D. Pedro Shopping is our main
asset, with 121 thousand sqm of GLA
(Gross Leaseble Area) is one of the
largest shopping malls in Brazil and
Latin America
• The mall is located in the city of
Campinas, in the São Paulo State, 100
km from the city of São Paulo
• Sonae Sierra Brasil holds a 51%
ownership interest in this mall
Sonae Sierra Brasil at a glance
One of the leading developers, owners and operators of top quality and regionally dominant
shopping centers in Brazil
(1) Excluding Uberlândia, Boulevard Londrina and Passeio das Águas shopping centers
Ownership Structure
6
Sonae Sierra Brasil benefits from best-in-class corporate governance and globally recognized
sector expertise, arising from a solid and engaged controlling shareholders
Free Float Sierra Brazil 1
B.V.
66.65% 33.35%
50.0%
• Over 45 years of history
• One of the largest developers and operators of shopping centers in US
• 12 million of sqm in total GLA
• NYSE listed and Sox Compliant
• Market value of US$6.3 billion (1)
50.0%
• Over 21 years of history
• One of the largest developers and operators of shopping centers in Europe
• Over 2 million of sqm in total GLA
• NAV: €1.1 billion (1)
• The largest business group of Portugal, with operations in over 40 countries
• Operations in retail, properties, shopping centers and telecommunications
• Market value: €2.2 billion(1)
• British company with over 300 years of history in the properties market
• Over 1,000 properties under management with a total value of £10.9 billion
• Properties in retail, commercial and residential segments
Sonae Sierra Brasil S.A.
50.0% 50.0%
Note: (1) As of November, 2013 Source: Reuters
Index
7
4 Company Fundamentals
11 Our Portfolio
7 Market and Sector Fundamentals
14 Growth Strategy
17 Operational and Financial Indicators
Fast growing middle class
8
Over 40 million people have moved upwards into the middle class, while middle class disposable income has tripled
Increasing middle class Middle class: disposable income(1) (R$/month)
Consumer credit still underpenetrated in Brazil
Source: Cetelem “O Observador 2012”
51%
24%
34%
54%
22% 15%
2005 2011
Population: 182 mm Population: 191 mm
+16 mm people
+40 mm people
A+B
C
D+E
Up
per c
lass
Mid
dle
cla
ss
Lo
wer c
lass
- 48 mm people
R$ 30 billion increase in monthly disposable income
Note: (1) Income available for spending and savings Source: Cetelem “O Observador 2012”, Euromonitor and Raymond James
Sonae Sierra Brasil is strategically positioned to capture the middle class consumption growth, as it entails over 80% of its
target audience
122
363
2005 2011
25%26%
16%15%
11%
6%
4%
28%
26%
16%
14%
10% 10%
4%
Chile USA Spain Germany Argentina Brazil Mexico
2006 2011
31.735.9
41.645.5
50.058.0
64.674.0
91.0
108.0
121.0
2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012
CAGR 2002-2012: 14.3%
Source: ABRASCE; SSB
5.5 5.66.2 6.3
7.58.3 8.6
9.19.5
10.3
11.2
0 .0
2 .0
4 .0
6 .0
8 .0
1 0 .0
1 2 .0
2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012
CAGR 2002-2012: 7.4%
Source: ABRASCE; SSB
303 317 326 335351 363 376
392408
430457
0
5 0
1 0 0
1 5 0
2 0 0
2 5 0
3 0 0
3 5 0
4 0 0
4 5 0
5 0 0
2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012
CAGR 2002-2012: 4.2%
Source: ABRASCE; SSB
-
500
1,000
1,500
2,000
2,500
USA
Canada
Euro
pe
Chile
Mexic
o
Colo
mbia
Peru
Bra
zil
DF
SP
PR
AM
GO
MG
GLA/1,000 inhabitants (2011)
Brazilian shopping center industry fundamentals
9
The Brazilian mall industry had a significant growth in recent years but it is still significantly
underpenetrated when compared to other countries
Number of shopping centers in Brazil GLA (million sqm)
Low shopping center market penetration
Source: ABRASCE, IBGE, BTG, SSB.
Brazil Average: 58
Shopping Center Sales (R$ billion)
Brazilian shopping center industry fundamentals (cont’d)
According to Abrasce, 79 greenfield projects were announced for 2013 and 2014 in Brazil, which,
if concluded, should add more than 2.4 million sqm of GLA
Source: Abrasce 10
North • Malls: 8 • GLA: 274k sqm
Mid-West • Malls: 4 • GLA: 166k sqm
Northeast • Malls: 14 • GLA: 398k sqm
Southeast • Malls: 44 • GLA: 1,340k sqm
South • Malls: 9 • GLA: 247k sqm
Brazil • Malls: 79 • GLA: 2,425k sqm
Index
11
4 Company Fundamentals
11 Our Portfolio
7 Market and Sector Fundamentals
14 Growth Strategy
17 Operational and Financial Indicators
Portfolio
12
Our portfolio is composed of 10 operating shopping malls, totaling 2,150 stores, 450 thousand sqm of total GLA and 354
thousand sqm of owned GLA. We recently opened Passeio das Águas Shopping, our 10th mall, which added 78 thousand
sqm of owned GLA to the portfolio. The Company also manages 2 third party malls totaling 341 stores and 52 thousand
sqm of GLA.
3
1
5
6 2 4
8
10
9
7
1. Parque D. Pedro Shopping
• Campinas (SP)
• GLA tsd sqm: 121.3
• Stores: 400
2. Boavista Shopping
• São Paulo (SP)
• GLA tsd sqm: 15.9
• Stores: 146
3. Franca Shopping
• Franca (SP)
• GLA tsd sqm: 18.5
• Stores: 106
5. Shopping Plaza Sul
• São Paulo (SP)
• GLA tsd sqm: 23.4
• Stores: 221
6. Shopping Campo Limpo
• São Paulo (SP)
• GLA tsd sqm: 22.3
• Stores: 148
4. Shopping Metrópole
• São Bernardo do Campo (SP)
• GLA tsd sqm: 30.0
• Stores: 192
7. Manauara Shopping
• Manaus (AM)
• GLA tsd sqm: 46.5
• Stores: 231
9. Boulevard Londrina Shopping
• Londrina (PR)
• GLA tsd sqm: 48.4
• Stores: 224
10. Passeio das Águas Shopping
• Goiânia (GO)
• GLA tsd sqm: 78.1
• Stores: 267
8. Uberlândia Shopping
• Uberlândia (MG)
• GLA tsd sqm: 45.8
• Stores: 215
12. Tivoli Shopping
• Sta. Bárbara d’Oeste (SP)
• GLA tsd sqm: 22.1
• Stores: 146
11
Malls in operation
Third party managed malls
11. Shopping Penha
• São Paulo (SP)
• GLA tsd sqm: 29.7
• Stores: 195
12
Controlling interests in most of shopping centers
13
Sonae Sierra Brasil’s average ownership stake is 78.6% in its 10 operating properties.
Note: (1) Sonae Sierra and DDR hold an additional 25.9% indirect ownership in Parque D. Pedro through another structure.
Rationale
Ability to expand and adapt to market trends
Controls the management
services of 100% of owned malls
Strategic control of the malls
Shopping Center City State GLA
(‘000 sqm) % SSB Management
Parque D. Pedro(1) Campinas SP 121.3 51.0%
Metrópole São Bernardo SP 30.0 100.0%
Boavista São Paulo SP 15.9 100.0%
Franca Franca SP 18.6 76.9%
Plaza Sul São Paulo SP 23.4 60.0%
Campo Limpo São Paulo SP 22.3 20.0%
Manauara Manaus AM 46.5 100.0%
Uberlândia Uberlândia MG 45.8 100.0%
Londrina Londrina PR 48.4 88.6%
Passeio das Águas Goiânia GO 78.1 100.0%
Average 78.6%
Third party malls under management
Penha São Paulo SP 29.7
Tivoli Santa Bárbara
d’Oeste SP 22.1
Index
14
4 Company Fundamentals
11 Our Portfolio
14 Growth Strategy
7 Market and Sector Fundamentals
17 Operational and Financial Indicators
Growth Vectors
Sonae Sierra Brasil’s growth will be driven by the following vectors, with the focus on the
return to the shareholders, by a disciplined investment strategy:
Return to the shareholder
Greenfields:
• Uberlândia (delivered)
•Boulevard Londrina (delivered)
• Passeio das Águas
• Projects yet to be announced
Expansion of existing malls:
• Metrópole
• Parque D. Pedro
• Franca
• Expansions yet to be announced
M&A opportunities:
• Actively searching for new acquisition opportunities of shopping centers that add value to the portfolio
15
16 Data on 10/30/13
Opening of Passeio das Águas Shopping
Passeio das Águas Shopping
Location Goiânia (GO)
Opening 10/30/2013
GLA ('000 sqm) 78.1
SSB's stake 100%
Number of stores 267
Occupancy 83%
Gross investment R$ 466.6 million
Parking Spaces 4,000
On October 30th, 2013 Sonae Sierra Brasil
announced the opening of Passeio das
Águas Shopping, the largest mall in Brazil’s
Mid-West region.
Aerial View External and Internal Pictures
Index
17
4 Company Fundamentals
11 Our Portfolio
14 Growth Strategy
7 Market and Sector Fundamentals
17 Operational and Financial Indicators
Shopping Center Sales
18
733 868 971
2,114 2,498
2,727
3Q11 3Q12 3Q13 9M11 9M12 9M13
Shopping Center Tenant Sales (R$ million)
11.9%
9.2%
Operating Performance
19
1,078.7
1,154.3
1,067.7
1,138.8
3Q12 3Q13 9M12 9M13
SSS/sqm (month)
7.0% 6.7%
63.0
71.1
63.4
70.8
3Q12 3Q13 9M12 9M13
SSR/sqm (month)
12.8% 11.6%
Operating Performance
Occupancy (% of GLA) Occupancy Cost (%)
Delinquency Rate (25 days)
20
97.4%98.8% 98.5% 98.5% 97.7% 97.4% 97.2%
94.7% 95.1%97.2%
3Q11 4Q11 1Q12 2Q12 3Q12 4Q12 1Q13 2Q13 3Q13 3Q13 w/o
Uberlândia and
Londrina
Occupancy (% GLA)
9.5%
8.7%
9.1% 9.2% 9.2% 9.1%9.3% 9.3% 9.4%
3Q11 4Q11 1Q12 2Q12 3Q12 4Q12 1Q13 2Q13 3Q13
Occupancy Cost (%)
2.92%
2.11%
2.61%
2.86%2.75%
2.38%
3.08%2.96%
3.09%2.91%
3Q11 4Q11 1Q12 2Q12 3Q12 4Q12 1Q13 2Q13 3Q13 3Q13 w/o
Uberlândia
and Londrina
Delinquency Rate (25 days)
Revenue Breakdown
21
77%
1%7%
9%
5%
1%
Gross Revenue Breakdown in the quarter
Rent
Rent contract straight-lining
Service revenue
Parking revenue
Key Money
Other revenue
81%
7%
12% Fixed Rent Revenue
Turnover Rent
Revenue
Kiosks and
Merchandising
Costs and Expenses
22
10.6 14.6
31.6 40.4
4.6
7.5
15.9
17.1
3Q12 3Q13 9M12 9M13
Cost and Expenses (R$ million)
Cost of rentals and services Operating expenses
37.8%
28.1%62.0%
7.8%
Financial Performance
23
64.3 67.0
186.2 197.5
3Q12 3Q13 9M12 9M13
Net Revenue (R$ million)
4.2%
6.0%
63.8 65.2
181.6 193.6
3Q12 3Q13 9M12 9M13
NOI (R$ million)
2.1%
6.6%
50.2 49.4
141.9 149.1
78.0%
73.7%76.2% 75.5%
0.0%
10.0%
20.0%
30.0%
40.0%
50.0%
60.0%
70.0%
80.0%
0.0
50.0
100.0
150.0
200.0
3Q12 3Q13 9M12 9M13
Adjusted EBITDA (R$ million) and Margin
5.1%
-1.5%
39.8 37.1
115.3 109.6
62.0%
55.4%
61.9%
55.5%
0.0%
10.0%
20.0%
30.0%
40.0%
50.0%
60.0%
0.0
20.0
40.0
60.0
80.0
100.0
120.0
140.0
160.0
3Q12 3Q13 9M12 9M13
Adjusted FFO (R$ million) and Margin
-6.8%
-4.9%
9.7%
Comparable malls NOI
Financial Performance (51% PDP)
24
52.5 53.7
150.2 159.8
3Q12 3Q13 9M12 9M13
Net Revenue (R$ million)
2.2%
6.4%
39.0 37.3
110.2 113.8
74.3%
69.4%
73.4%71.2%
40.0%
45.0%
50.0%
55.0%
60.0%
65.0%
70.0%
75.0%
0.0
20.0
40.0
60.0
80.0
100.0
120.0
140.0
160.0
3Q12 3Q13 9M12 9M13
Adjusted EBITDA(R$ million) and Margin
3.3%
-4.5%
28.5 24.8
82.873.7
54.3%
46.2%
55.2%
46.1%
0.0%
10.0%
20.0%
30.0%
40.0%
50.0%
0.0
20.0
40.0
60.0
80.0
100.0
120.0
3Q12 3Q13 9M12 9M13
Adjusted FFO(R$ million) and Margin
-13.1%
-11.0%
29.3 19.6
157.4 151.3
3Q12 3Q13 9M12 9M13
Net Income (R$ million)
-3.8%
-33.2%
Cash Position and Leverage
25 Data on 9/30/13
886.5
419.2
467.3
Total Debt Cash and cash
equivalents
Net Debt
Net Financial Debt (R$ million)
Fixed
14%
CDI
13%
TR
47%
IPCA
26%
Debt Profile
24.6 74.5 66.6 109.8 106.1
504.8
2013 2014 2015 2016 2017 2018 and
beyond
Financial Debt Amortization (R$ million)
Does not consider debt related to asset acquisitions
Thank you!
Investor Relations Website: www.sonaesierrabrasil.com.br/ir Email: [email protected] Phone: +55 (11) 3371 3692