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Institutional Presentation
2
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.
Index
4 Company Fundamentals
11 Our Portfolio
15 Growth Strategy
7 Market and Sector Fundamentals
21 Operational and Financial Indicators
Parque D. Pedro Shopping ‘s Food Court (Campinas) 3
25 Recent Events
Expansion / Greenfield
Announced GLA Growth (2011 – 2013)(1)
(‘000 sqm)(2)
Owned GLA Growth (%)
Sonae Sierra Brasil at a glance
One of the leading developers, owners and operators of top quality and regionally dominant shopping centers in Brazil
► Defined Growth strategy: focus on low served cities’ middle class
► Largest secured growth in the sector: 2 greenfields under
construction, 1 greenfield and 3 expansions recently concluded
almost doubling our owned GLA
► 3 other expansions already defined
► 11 shopping centers owned and managed (403k sqm total GLA)
► Occupancy rate of 98.5%(3)
► Solid margins (EBITDA = 76.8% and FFO = 77.4%)
► Greenfield Expertise (62.4% of GLA)
Note: (1) As of March 31, 2012 (2) Referrers to shopping center’s GLA only. .(3) Excluding Uberlândia Shopping
► Leverage on the expertise, tenant relationships and market
recognition of our shareholders: Sonae Sierra SGPS and DDR
Corp (NYSE: DDR)
► Best-in-class controlling shareholders with significant experience in
the sector
► 33.35% free float
Secured Growth
Operating Expertise
Shareholders: solid base
4
141
135
104
122
181
+42.9%
+86.9%
+45.2%
+32.2%
+17.5%
Sierra Brazil 1
BV66.65%
Free Float33.35%
Ownership Structure
Post-IPO Ownership Breakdown Controlling Shareholders
► Over 21 years of history
► One of the largest developers and operators of shopping centers in Europe
► Over 2.0 mm sq m in total GLA
► 50/50 joint-venture between Sonae and Grosvenor
► NAV: €1.1 billion(2)
► Over 45 years of history
► One of the largest developers and operators of shopping centers in US
► 12 mm sq m in total GLA
► NYSE listed, SOx Compliant
► Equity value of US$3.9 billion(1)
Sierra Brazil 1 BV
Note: (1) as of March 7, 2012
(2) as of December 31, 2011
Sonae Sierra Brasil benefits from best-in-class corporate governance and globally recognized sector expertise, arising from a solid and engaged controlling shareholders
5
Index
6 Manauara Shopping (Manaus)
4 Company Fundamentals
11 Our Portfolio
15 Growth Strategy
7 Market and Sector Fundamentals
21 Operational and Financial Indicators
25 Recent Events
3.2%3.9%
6.1%
5.2%
-0.3%
7.5%
2.7%3.2%
3.9%4.5% 4.4%
2005 2006 2007 2008 2009 2010 2011 2012e 2013e 2014e 2015e
18.00%
13.25%
11.25%
13.75%
8.75%
10.75% 11.00%9.50%
10.50% 10.50% 10.00%
2005 2006 2007 2008 2009 2010 2011 2012e 2013e 2014e 2015e
4.8%
6.2%
9.8%9.1%
5.9%
10.9%
6.7%
2005 2006 2007 2008 2009 2010 2011
5.7%
3.1%
4.5%
5.9%
4.3%
5.9%
6.5%
5.2%5.6%
5.2%4.8%
2005 2006 2007 2008 2009 2010 2011 2012e 2013e 2014e 2015e
7
Despite uncertainties in the global macro economic scenario, perspectives are compelling for Brazil
Macro Economic Scenario
IPCA Rate (%) Retail Sales Growth (%)
Selic Rate (%) GDP Growth Rate (%)
Source: MCM
Source: MCM Source: MCM
Source: IBGE
Shopping centers in Brazil
Brazilian Shopping centers growth by region: 2014e
Shopping centers sales - CAGR (08-11): 16%
Source: IBOPE Source: IBOPE
Low shopping center market penetration
Source: ABRASCE and IBGE.
Total GLA (m²) / 1,000 inhabitants (2010)
2,180
USA Canada
1,290
SP
91
PR
53
MG
31
GO
34
AM
42
DF
143
Other BR states
34
Average: 49
Mexico
81
Source: IBOPE
Southeast 2010 205
South 2010 73
Northeast 2010 55
Mid West 2010 37
North 2010 11
+29%
+15%
+20%
+16%
+72%
Southeast 2014 265
South 2014 84
Northeast 2014 66
Mid West 2014 43
North 2014 19
70.1 78.889.5
109.1
13.7%14.0% 14.0%
15.4%
2008 2009 2010 2011eSales (R$ billion) % of Total Retail Sales
Attractive shopping center industry fundamentals Despite recent growth, decreasing vacancy rates and low penetration vis-à-vis developed markets indicate significant room for new shopping centers in Brazil
8
342359
381
419
2008 2009 2010 2011e
Fast growing middle class Over 40 million people have moved upwards into the middle class, while middle class disposable income has tripled
Middle class: disposable income(1) (R$/month)
Note: (1) Income available for spending and saving Source: Cetelem “O Observador 2012”, IBGE and Itau Securities
122
363
2005 2011
+198%
R$ 30 billion increase in monthly disposable income
Total credit to individuals outstanding (R$ bn)
Source: Cetelem “O Observador 2012”
Increasing middle class
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
Upp
er c
lass
M
iddl
e cl
ass
Low
er c
lass
Sonae Sierra Brazil is strategically positioned to capture the middle class consumption growth, as it entails over 80% of its target audience
6.8x
-
200
400
600
Jan-01 May-02 Sep-03 Jan-05 May-06 Sep-07 Jan-09 May-10
- 48 mm people
9
Index
Shopping Penha (São Paulo) 10
4 Company Fundamentals
11 Our Portfolio
15 Growth Strategy
7 Market and Sector Fundamentals
21 Operational and Financial Indicators
25 Recent Events
Focus on dominant malls in underserved medium and large cities, targeting middle class customers Sonae Sierra Brasil has an established footprint in the State of São Paulo and its growth strategy is based on offering high quality, market dominant developments in underserved regions
Core portfolio: 9 properties Development strategy: 2 opened and 2 greenfields
Core Portfolio of Assets
Strong track record in Brazil’s most dynamic region Growth strategy focused on underserved regions
Parque D. Pedro
► Campinas (SP) ► Population: 1,089k ► GLA: 121.1k sq m ► Occupancy rate: 98.8% ► Over 20 mm visits in 2010
Total GLA 2010: 298k sq m
Owned GLA 2010: 151k sq m
Greenfield
Manauara Shopping
► Manaus (AM) ► Population: 1,832k ► GLA: 46.8k sq m ► Occupancy rate: 98.8%
# of competitors in area of influence
Parque D. Pedro 2
Boavista 2
Penha 2
Franca 1
Tivoli 1
Metrópole 2
Pátio Brasil 2
Plaza Sul 1
Campo Limpo 2
Total GLA 2013: 552k sq m
Owned GLA 2013: 389k sq m
# of cities with more than 300k inhabitants in Brazil
+ 81
Owned GLA concentration
Shopping centers
Recently opened mall
Shopping centers
Manaus
Uberlândia
Goiânia
Londrina
11
São Paulo Other States
54.9% 45.1%
Portfolio
Greenfield
Shopping centers
4
5
1 8
9 3 2
6
7
11 13
12
10
1. Parque D. Pedro ► Campinas (SP) ► GLA (sqm): 121.0
► Stores : 402 ► 98.4% of GLA leased
2. Boavista Shopping ► São Paulo (SP) ► GLA (sqm): 16.0
► Stores : 148 ► 94.7% of GLA leased
3. Shopping Penha ► São Paulo (SP) ► GLA (sqm): 29.7
► Stores : 198 ► 98.2% of GLA leased
4. Franca Shopping ► Franca (SP) ► GLA (sqm): 18.5
► Stores : 106 ► 99.5% of GLA leased
5. Tivoli Shopping ► Santa Barbara d'Oeste (SP)
► GLA (sqm): 22.1
► Stores : 144 ► 99.3% of GLA leased
7 Pátio Brasil ► Cidade: Brasília (DF) ► GLA (sqm): 29.0 ► Stores : 235 ► 97.2% of GLA leased
8. Shopping Plaza Sul ► São Paulo (SP) ► GLA (sqm): 23.2
► Stores : 221 ► 99.4% of GLA leased
9. Shopping Campo Limpo ► São Paulo (SP) ► GLA (sqm): 22.3
► Stores : 148 ► 99.2% of GLA leased
10. Manauara Shopping ► Manaus (AM) ► GLA (sqm): 46.8
► Stores : 231 ► 99.5% of GLA leased
12 Boulevard Londrina Shopping
► Londrina (PR) ► GLA (sqm): 47.8
► Opening; 1Q13
13 Passeio das Águas Shopping
► Goiânia (GO) ► GLA (sqm): 78.1
► Opening: 2H13
Data on March 31, 2012
Our portfolio is composed by 11 operating shopping malls, totaling 2,215 stores, 403 thousand sqm of total GLA and 254 thousand sqm of owned GLA. Until 2013 there will be more 2 new malls, adding 118 thousand sqm of owned GLA to the portfolio
12
11. Uberlândia Shopping ► Uberlândia (MG) ► GLA (sqm): 45.3
► Stores : 201 ► 93.0% of GLA leased
6. Shopping Metrópole ► São Bernardo do Campo (SP) ► GLA (sqm): 28.6
► Stores : 181 ► 99.6% of GLA leased
Controlling interests in most shopping centers Sonae Sierra Brasil average ownership stake is 63% in its 11 operating properties. It will reach 70% when all three greenfield developments are completed
Rationale Percentage of the Company’s interest Shopping Center City State GLA
(‘000 sqm) Stake Management
Parque D. Pedro(1) Campinas SP 121.0 51.0% Penha São Paulo SP 29.7 51.0% Metrópole São Bernardo SP 28.6 100.0% Tivoli Santa Bárbara
d’Oeste SP 22.1 30.0% Pátio Brasil Brasília DF 29.0 10.4% Boavista São Paulo SP 15.9 100.0% Franca Franca SP 18.5 67.4% Plaza Sul São Paulo SP 23.2 60.0% Campo Limpo São Paulo SP 22.3 20.0% Manauara Manaus AM 46.8 100.0% Uberlândia Uberlândia MG 45.3 100.0% Weighted Average 63.1%
Londrina Londrina PR 47.8 84.5%(2) Goiânia Goiânia GO 78.1 100.0% Weighted Average 70.5%
Note: (1) Sonae Sierra and DDR hold an additional 25.9% indirect ownership in Parque D. Pedro through another structure. (2) Ownership considering partner will fully exercise its rights in the project
Ability to expand and adapt to market trends
Control the management services of 100% of the malls
Strategic control of the malls
13
Index
Uberlândia Shopping’s façade (Uberlândia) 14
4 Company Fundamentals
11 Our Portfolio
15 Growth Strategy
7 Market and Sector Fundamentals
21 Operational and Financial Indicators
25 Recent Events
Secured Growth
Owned GLA growth (‘000 sqm)
15
Sonae Sierra Brasil has a solid new development and expansion pipeline which will almost double the Company’s owned GLA until 2013
209
390
1745
118
1
2011 2012 2013 Total
M&A GreenfieldsExpansion
Uberlândia
Londrina and Goiânia
PDP (II), Metrópole (II) and Tívoli
+87%
Plaza Sul and Penha
Opening March 27th, 2012
Total GLA (‘000 sqm) 45.3
SSB’s ownership 100%
Occupancy rate 93.0%
Number of stores 201
Anchor stores 15
Parking spaces 2,400
Gross Investment R$201 million
16
With Uberlândia Shopping, Sonae Sierra Brasil reaches 11 malls owned and managed, totaling 410 thousand sqm of total GLA and 254 sqm of owned GLA. Uberlândia Shopping is the 3rd largest mall in the Company’s portfolio, just behind Parque D. Pedro Shopping and Manauara Shopping. Sonae Sierra Brasil’s average ownership interest increased to 63.1%.
Greenfield Projects – Uberlândia Shopping
Greenfield Projects – Boulevard Londrina Shopping
Construction pictures
Project Illustration
Boulevard Londrina Shopping
City Londrina
State PR
Opening 1Q13
GLA (sqm) 47.8
SSB’s stake* 84.5%
Committed GLA 70%
Gross Capex Incurred (R$ MM) 122.9
Scheduled to open in 1Q13, the shopping mall is part of a big renovation project of an old industrial region in downtown Londrina
Data as of March 31, 2012 * Ownership considering partner will fully exercise its rights in the project 17
Greenfield Projects – Passeio das Águas Shopping
Project Illustration and Construction Site
Passeio das Águas Shopping
City Goiânia
State GO
Opening 2H13
GLA (sqm) 78.1
SSB’s stake 100%
Committed GLA 43%
Gross Capex Incurred (R$ MM) 91.6
Scheduled to open in 2H13, the biggest project of our portfolio and is located within the growth sector of Goiânia
Data as of March 31, 2012 18
Expansions
Metrópole (Expansion I)
São Bernardo (SP)
100%
9.0
Nov 2011
1H2010
100%
Campo Limpo
São Paulo (SP)
20%
3.0
Sep 2011
1H2011
100%
Parque D. Pedro (Expansion I)
Campinas (SP)
51%
5.0
Nov 2010
1H2010
100%
Parque D. Pedro (Expansion II)
Campinas (SP)
51%
5.0
2013
1H2013
n.a.
Metrópole (Expansion II)
São Bernardo (SP)
100%
12.0
2013
2H2012
n.a.
Tivoli
Sta. Bárbara D’Oeste (SP)
30%
7.0
2013
1H2012
n.a.
*Data as of March 31, 2012
Location
Sonae Sierra Brasil Stake
Additional Total GLA (‘000 sq m)
Expected Opening
Construction Start Date
% of GLA already committed*:
Future expansions Concluded expansion
19
Shopping Campo Limpo’s façade (São Paulo) 20
Index
4 Company Fundamentals
11 Our Portfolio
15 Growth Strategy
7 Market and Sector Fundamentals
21 Operational and Financial Indicators
25 Recent Events
21 21
Operational and Financial Indicators
98.3% 98.5% 98.4%98.0% 97.7% 97.5% 97.4%
98.8% 98.5%
1Q10 2Q10 3Q10 4Q10 1Q11 2Q11 3Q11 4Q11 1Q12
Occupancy Rate (% of GLA)
111
Sales (R$ million)
111
SSS/sqm
111
SSR/sqm
841 936
3,545 3,969
1Q11 1Q12 2010 2011
11.4%
12.0%
856 940 958 1,039
1Q11 1Q12 2010 2011
9.8%8.5%
49
55 51
57
1Q11 1Q12 2010 2011
12.1%
11.5%
34.4 34.6
123.4 170.2
1Q11 1Q12 2010 2011
0.5%
37.9%
38.0 41.9
140.3 168.9
1Q11 1Q12 2010 2011
10.4%
20.4%
49.7 56.6
185.0 219.2
1Q11 1Q12 2010 2011
13.9%18.5%
Adjusted EBITDA and Margin (R$ million)
22
Operational and Financial Indicators
Net Revenue (R$ million)
Adjusted FFO and Margin (R$ million) Net Operating Income - NOI (R$ million)
76.3% 74.0% 75.8% 77.1%
69.2% 61.0% 66.7% 77.7%
47.7 54.9
174.4 211.5
1Q11 1Q12 2010 2011
15.1%
21.3%
Fixed19%
CDI19%
TR33%
IPCA29%
23
Net Cash Position and Modest Leverage
Data on March 31st, 2012
Net Cash Position (R$ million) Debt Profile
Debt Amortization Schedule (R$ million)
30.0 35.2 48.6 49.5 92.8
453.9
2012 2013 2014 2015 2016 2017 and
beyond
731,3
21,3
710,0
Cash and Cash Equivalents
Debt Net Cash
Contracted Debt Financing Committed Amount (R$
MM)
Term (Years)
Interest Rate
Balance as of
03/31/12 (R$ MM)
Working Capital 20 5 CDI + 2.85% 16
Working Capital 27 6 CDI + 3.30% 24
Manauara Shopping 112 12 8.5% 132
Metrópole Shopping – Expansion I 53 8 TR + 10.3% 55
Uberlândia Shopping 81 15 TR + 11.30% 78
Boulevard Londrina Shopping 120 15 TR + 10.90% 53
Passeio das Águas Shopping 200 12 TR + 11.00% 49
Debentures – first series 95 5 CDI + 0.96% 97
Debentures – second series 205 7 IPCA + 6.25% 207
Total 914 710
Average 10.2 11.40%
Índice
Shopping Metrópole (São Bernardo do Campo) 24
4 Company Fundamentals
11 Our Portfolio
15 Growth Strategy
7 Market and Sector Fundamentals
21 Operational and Financial Indicators
25 Recent Events
25
Recent Events – First Issuance of Debentures
The net funds raised by the Company with the Issue will be allocated (i) to the acquisition of new plots of land; (ii) to the increase of the Company’s participation in shopping malls; (iii) to the acquisition of new shopping malls; (iv) to the development of new shopping malls; and (v) to constitute cash reserve for the Company.
Emission details Total amount of the issue R$300 million Number of debentures 30,000 Unit par value R$10,000
Characteristics Simple, unsecured, non convertible, 2 series (1st: CDI and 2nd: IPCA)
Banks Coordinators Itaú BBA (leader), BTG and Bradesco 1st series term 5 years 1st series remuneration CDI + 0.96% 2nd series term 7 years 2nd series remuneration IPCA + 6.25%
26
Recent Events – SSB obtains Plaza Sul control
Transaction overview SSB receives:
• 30.00% of Shopping Plaza Sul, valued at R$102.9 million
CSHG receives: • 17.12% of Shopping Penha, valued at R$39.0 million and • R$63.9 million in cash
Transaction IRR: 16.9% (nominal, unleveraged and after taxes)
Cap rates: • 9.4% for Plaza Sul transaction and • 9.5% for Penha transaction
Opening 1994 1992
Total GLA (‘000 sqm) 23.0 29.6
SSB’s ownership 30.00% → 60.00% 73.18% → 56.06%
Occupancy rate 99.4% 99.0%
Sales/sqm (2011 monthly avg.) R$ 1,436 R$ 990
Rent/sqm (2011 monthly avg.) R$ 98.4 R$ 60.9
The transaction rational was to reinforce Sonae Sierra Brasil’s strategy to pursue opportunistic M&A activities, adding to the portfolio the controlling ownership of a high-quality mall located in the city of São Paulo while maintaining the controlling ownership stake in another asset. Additionally, Sonae Sierra Brasil sold a 5.1% additional minority stake on Shopping Penha to CSHG for R$11 million. After these transactions, SSB’s stake on this mall is 51.0%, maintaining the controlling ownership interest in this asset.
Shopping Plaza Sul
Shopping Penha