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Presentation
Cyrela byPininfarinaSão Paulo - SP
Cyrela
Overview;
History;
Strategic focus;
Operational figures;
Financial indicators;
Portfolio.
AGENDA
2
AGENDA
Cyrela
Overview;
History;
Strategic focus;
Operational figures;
Financial indicators;
Portfolio.
3
CYRELA AT A GLANCE
Leadership position in the industry
50 years of history
~ 15,000 employees
More than 200,000 clients
Receivables – R$ 5.8 billion (As of September, 2016)
The “Most Admired Company in Brazil” in “Construction, Homebuilding and Real Estate Development Companies” category for the tenth consecutive year
45% 21%34%
Free-float FoundersTop
Shareholders
Solid group with extensive experience in the industry
Geographical footprint (Launches) Rating
Shareholders’ structure
26.0%36.9%
Source: Cyrela Note: (1) Including third parties
1
4
South
Minas Gerais
Rio de Janeiro
São Paulo - Other Cities
São Paulo17%
49%
12%
12%
10%
• National Scale: AA-(bra)• Foreign Currency: BB• Outlook: Stable.
• National Scale: brAA-• Global Scale: BB• Outlook: Negative.
• National Scale: Aa3.br• Global Scale: Ba2• Outlook: Negative.
AGENDA
Cyrela
Overview;
History;
Strategic focus;
Operational figures;
Financial indicators;
Portfolio.
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 ( CyrelaCommercial Properties)
1st debenture offering (out of a serie of 6 debentures)
1st receivables back securities (CRI’s) offering (out of a serieof 2 CRI’s)
Launch of facebook sales channel
6st debenture offering
60’s 80’s and 90’s ´00-’10 ´11-´13
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 program
Allow 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
Oreganic
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
Strategy
Corporate governance
7
CYRELA HIGHLIGHTS
1Leadership position in the industry and key markets
2Fully integrated real estate company
(from land acquisition to selling)
3Exposure to all customer segments
4Fully professionalized management team with deep
industry
Solid balance sheet (largest real estate company in Brazil
by market cap)5
Expertise in designing innovative projects 6
Strong Brand: The most admired Real estate company 7
8
RECENTS AWARDS
Cyrela by Pininfarina was the winner of the 2016 iF DesignAward in the Architecture and Interiors category. With 60 years oftradition, this german award is one of the most respected in thesector.
The 2nd best developer and homebuilder - 2016.
Cyrela received the Top Employer Certification, given to the world’s best employers, in 2015.
Cyrela is in Valor Econômico newspaper’s Anuário Inovação BrasilRanking of Brazil’s 100 most innovative companies. 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.
9
The “Most admired Company in Brazil” in “Construction and Real Estate Development Companies” category. – 2015.
Winner in the category of Brand Communication with the“Identidade Cyrela” [Cyrela Identity] case, about the brandingproject the Company launched in 2013
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
Objectives
Objectives
Examples of initiatives
Examples of initiatives
10
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 PRACTICES
ENVIRONMENTAL INITIATIVES
Distinctive environmentally-friendly practices
11
AGENDA
Cyrela
Overview;
History;
Strategic focus;
Operational figures;
Financial indicators;
Portfolio.
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
Partnerships
Startups
Closing / Acquisition
Final Position
2006 2007 2008 2009 2010 2011 2012 ... 2016
5 11 11 9 7 4 4 ... 4
REDUCTION IN THE NUMBER OF JV’S, KEEPING THE
ONES THAT ATE IN LINE WITH CYRELA’S STRATEGY
SHIFT IN STRATEGY HAS ALREADY TRANSLATED INTO
MORE ORGANIC OPERATIONS
Cyrela’s share in projects (%) Cyrela’s share in construction site management (%)1 2
1 Share in projects launched 2 Cyrela + JV’s
Company should keep working with partners on development
Cyrela has been focusing on using own engineering
15100%80%60%40%20%0%
2012 87%
2006 44%
2007 28%
2008 34%
2009 47%
2010 60%
2011 81%
2013 91%
2014 94%
2015 95%
2016 97%
+100.0%+80.0%+60.0%+40.0%+20.0%0%
2006 73%
2007 65%
2008 59%
2009 76%
2010 77%
2011 81%
2012 73%
2013 71%
2014 82%
2015 78%
2016 76%
GROSS MARGIN
Cyrela expects the gross margin to grow in a sustainable pacegoing foward
16
29,9%
27.4%
31,7%
Gross Margin Gross Margin EX Ret / Riserva Golf
2014
MORTGAGE RATE INCREASE BRINGS MORE SALES CANCELLATION
2016
Unit value
Interest Rate (TR+)
Loan term
1st installment - SAC
Monthly Income
R$400,000
9% p.a
35 years
R$ 3,068
R$ 12,273
R$400,000
11,5% p.a
35 years
R$ 3,678
R$ 14,712
+ 2.5 p.p.
+20%
ExampleAssumptions: Loan-to-Value 80% (LTV)
25.0% 25.0%Income Commitment
17
RECOGNIZED BRANDS AND DIVERSIFIED PROTFOLIO
SPRJSOUTHMIDDLE WEST
JV’sNew Businesses
Financial strength, credibility and entrepreunership
18
THE WAY CYRELA PLAYS IN THE REAL ESTATE MARKET
USING AN INTEGRATED BUSINESS PLATFORM
Luxury / High
Middle
Economic
19
AGENDA
Cyrela
Overview;
History;
Strategic focus;
Operational figures;
Financial indicators;
Portfolio.
20
PSV of R$ 52.3 bn (100%) and R$ 45.3 bn (%CBR).
76% of landbank acquired through swaps.
(R$ billion)
LANDBANK
Others
7.6
South
4.2
São Paulo
15.0
Rio de Janeiro
25.5
11.2
14.3
Total
52.3
38.0
14.3 Swap agreement
Cyrela – Landbank (100%)
21
OPERATIONAL HISTORY
Launches – PSV (billion)
Pre-Sales – PSV (billion) Direct employees
Launched units (thousands)
22
-22%
+10%
9M16
1.7
2015
2.9
2014
5.8
2013
6.6
2012
5.6
2011
7.9
2010
7.6
2009
5.7
2008
5.5
2007
5.4
-45%
+9%
9M16
5.0
2015
8.4
2014
13.1
2013
27.9
2012
23.4
2011
26.1
2010
27.6
2009
26.4
2008
18.3
2007
16.9
-15%+10%
9M16
1.7
2015
3.4
2014
5.7
2013
7.2
2012
6.0
2011
6.5
2010
6.2
2009
5.2
2008
5.1
2007
4.4984946
514529
-13%
+34%
20152014
1,264
2013
1,373
2012
1,460
2011
1,728
2010
1,512
200920082007
CYRELA
OPERATING RESULTS
17 projects launched in 6M16, 91 in 2015, 53 in 2014 and 74 in 2013;
4.9 thd units sold in 9M16, 9 thd in 2015, 14.6 thd in 2014 and 30.0 thd in 2013.
Launches – R$ Billion Pre-Sales – R$ Billion
23
0.5
7.6
6.0
1.6
2010
7.9
6.3
1.7
2011
5.6
3.9
2009
1.7
5.5
1.2
2013
5.7
4.5
3.4 3.8
5.4
1.7
2007
2.0
2.0
1.7
9M16
4.6
2.4
2015
0.5
2.9
6.6
2008
4.9
1.0
2012
5.8
2014
1.2
Partners CBR
1.7
9M16
1.3
0.4
2015
6.2
1.34.4
2.9
20082007
2.1
4.0
5.2
1.5
3.1
5.1
4.8
2009
1.4
6.5
4.4
1.26.0
5.3
2010 2011
1.6
0.8
2014
2.6
3.4
1.0
2013
4.7
5.72.1
2012
5.1
7.2
SALES
* Considering the sales LTM
(R$ billion)
Sales – PSV (billion) Sales 2016– Region
Sales speed* – 12M
24
North
-1.6%
Espírito Santo
0.8%Minas Gerais 3.3%
Rio de Janeiro
21.8%
São Paulo - Other Cities
13.0%
São Paulo43.1%
0.1%
Northeast
3.3%
South
11.2%Middle West
1.9%-31%
+9%
9M16
1.7
2015
3.4
2014
5.7
2013
7.2
2012
6.0
2011
6.5
2010
6.2
2009
5.2
2008
5.1
2007
4.4
32.2%
4Q15
33.1%
33.1%
3Q15
39.2%
38.6%
3Q16
27.2%
27.2%SOS LTM ex-”Faixa 1”
2Q15
30.1%
30.1%
1Q15
32.2%
SALES BY VINTAGE
(R$ million)
Sales by vintage of launching
25
Sales Speed of the last 12 months attained 27.2% in 3Q15.
Sales by vintage of launchings
474
1.442 1.293
285
277
277
191
105
105
818
250
285
9M15
-43,2%
3Q16
573
3Q15
1.009
9M16
2.546
1.675
-34%
47%
37%
38%
42%
61%
10%
5%
17%
10%
6%
5%
8%
2%
6%
3Q16
2Q16 52%
1Q16 63%
4Q15 49%
3Q15 71%2%
In 15 months
In 12 months
In 9 months
In 6 months
In 3 months
Previous Years Launches
Quarter’s Launches
Previous Quarters Launches
INVENTORIES
Finished units represent 33% of inventories.
Inventories – Market value (R$ MM) Inventories – Delivery date
26
2Q15
6,558
4,450
2,108
1Q15
6,480
4,523
1,957
4Q15
6,563
4,936
1,627
3Q15
6,853
5,110
1,743
3Q16
6,412
4,271
2,142
Em AndamentoConcluído
Inventory to be
deliveredTotal Consolidation Equity Method
Finished Units 2,142 1,775 364
12 Months 1,784 1,599 187
24 Months 1,541 1,382 158
36 Months 932 772 160
48 Months 14 - 14
Total 6,412 5,529 883
27
TOTAL INVENTORY
-175.6
Sales of
inventories
-296.5
Launches
3Q16
451.9
Sales of
launches
3Q16
-276.8
Price
change
-24.7
Inventory
3Q16
6,412.3
-2.2%
-120.9
Inventory
2Q16
6,558.4
Inventory under construction Finished inventory
Minas Gerais
0.5%
Espírito Santo
1.0%
Middle West
2.0%
North
2.6%South
8.5%
Northeast8.0%
Rio de Janeiro
28.2%
São Paulo - Other Cities
18.9%
São Paulo
30.3%
Changes in Inventory Inventory Breakdown
R$ 6.4 billions in inventory (R$ 5.2 billion %CBR);
R$ 2,142 million of finished units inventory (vs. R$ 2,108 million in 2Q15).
(R$ million)
FINISHED UNITS INVENTORY
Finished Units Finished Units Breakdown
28
2,108.3
VendasEstoquePronto
2,141.5
+2%
-175.6
Estoque Pronto 2Q15
Var. Preço Estoque Pronto 3Q16
-33.1
Entrega Estoque Pronto
241.9 14.3%
São Paulo
15.7% São Paulo -Other Cities
24.5%
Rio de Janeiro
1.0%
Minas Gerais
5.5%
North
1.8%
Middle West
14.3%South
21.2%
Northeast1.7%
Espírito Santo
-41.8%-16.9% +15.2%
9M16
13.9
6.5
7.4
2015
24.0
14.8
9.1
2014
20.8
9.2
11.6
2013
25.0
11.8
13.2
7.5
2.1
5.4
23.8
13.2
10.6
2011
15.4
7.1
8.3
2010 2012
3.7 thousand units delivered in 3Q16, in 15 projects. In the year, 13.9 thousand units delivered, in 51 projects;
Middle + MCMV: 1.3 thousand units delivered in 5 projects in 3Q16.
The units delivered in 3Q16 represent launches PSV of R$ 1,4 billion. In the semester, the PSV delivered
represented R$ 5,5 billion.
(Units thd)
DELIVERED UNITS
Middle+MCMV
High End
29
2,132
570
1,562
+0.2%-35.2%
3Q15
1,379
811
569
3Q16
1,381
392
990
2Q16
AGENDA
Cyrela
Overview;
History;
Strategic focus;
Operational figures;
Financial indicators;
Portfolio.
30
571
120
448
661719
498
600
2015201420132012
660
20112010 9M16
FINANCIAL RESULTS - YTD
Gross Margin EBTIDA Margin
(R$ million)
Net Margin
* Data before “CPC” (IFRS 10 and 11) “Ex-RET” 31
EBTIDA Margin
Net income
Ex RET
31.4%
30.3%32.3%
32.7% 32.1%
34.6%35.0%
2010 2011 2012 2013 2014 2015 9M16
5.3%
12.3%
8.8%
11.7% 13.4%
11.4%10.3%
2010 2011 2012 2013 2014 2015 9M16
16.5%
15.2%
19.4% 20.5%18.0%
17.2%
10,9%
2010 2011 2012 2013 2014 2015 9M16
FINANCIAL RESULTS
(R$ million)
Margin
Gross revenue Gross profit and Gross Margin
EBITDA and EBITDA Margin Net Income and Net Margin
32
847662
-31%
-28%+28%
9M16
2,343
9M15
3,407
3Q15
1,173
3Q162Q16
261
798
395254
-31%
-34%+3%
9M16
35.0%
9M15
1,154
34.9%
3Q15
34.7%
3Q16
31.7%
2Q16
39.6%
214
605
249
9.8%
-59%
-68%+9%
9M16
10.9%
9M15
18.3%
3Q15
18.8%
3Q16
69
8.3%
2Q16
63131
350
45120
-66%
-89%-68%
9M16
5.3%
9M15
10.6%
3Q15
11.5%
3Q16
14
1.8%
2Q16
7.0%
RETURN ON EQUITY
Return on Equity (net income LTM / Average Equity LTM ex - minorities) attained 3.7%
* ROE: Net income / Average shareholders’ equity, excluding minorities
33
Ex-RET
3Q16
3.7%
2Q16
5.7%
1Q16
10.6%
4Q15
11.9%
3Q15
12.3%
HEALTHY LIQUIDITY AND DEBT INDICATORS
(R$ million)
* Data before “CPC” (IFRS 10 and 11)
2011
27.4%22.2%
32.8%
39.6%41.5%
55.1%
2015 9M162013 20142012
Debt
Net debt / Equity
34
Net Debt
1.85
Cash and Cash Equivalents
1.59
Term
3.44
2.18
1.25
Gross Debt 3Q16
3.44
2.28
1.16
Gross Debt 2Q16
3.51
2.39
1.13
Gross Debt 4Q15
3.71
2.32
1.40 IndicatorsTotal Debt
DebtEx-SFH
Net Debt/ EBITDA 12M
4.72x -1.08x
Net Debt/ Equity
27.4%
Average CostW/o SFH: 101.4% CDISFH: TR + 9.14% p.y.
Duration 1.7 year 1.4 year
Short Term 40% 46%
Long Term 60% 54%
TRANSFERS, PAY OFFS, TRUST OF DEED
(R$ million) (units thd)
Volume Units
35
In 3Q16, the volume of transfers, payoffs and trust of deeds attained R$ 690 million, 13% lower than 2Q16 and 15%
lower than 3Q15. In the year, R$ 2,139 million, volume 16% lower than 9M15.
553 432 423
223203 308
615
718
61
5539
690
3Q163Q15
816 792
2Q16
2,549
9M15
2,139
9M16
-16%
-12.8%-15.4%
1,855
80
1,269
153
Trust of DeedsPayoffs Transfers
8.0
-23.7%
3.7
0.3
5.7
-18%
-11.1%
9.8
3.6
9M15
0.9
12.0
1.90.2
1.4
2.0
3Q15
3.11.3
2.6
3.5
2Q16
0.1
3Q16
4.0
9M16
0.5
0.2
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
36
CASH GENERATION*
(R$ million)
*Ex dividends, buyback and stake acquisition37
Cash consumption of R$ 225 million in 3Q16 (R$ 152 million ex-Tecnisa), vs. a cash consumption of R$ 29 million in 2Q16
and a cash generation of R$ 219 million in 3Q15. In the year, cash consumption of R$ 267 million, vs. a cash generation
of R$ 841 million in 9M15.
Cash generation ex- acquisition of equity interest
-152 -152 -193
-73 -73-73
-29
841
219
-225
2Q16 9M1
6
-267
9M1
5
3Q16
-225
3Q153Q16
Cash burn Acquisition % Tecnisa
AGENDA
Cyrela
Overview;
History;
Strategic focus;
Operational figures;
Financial indicators;;
Portfolio.
38
MANDARIM
SÃO PAULO (2006)
The tallest residential
building in latin america (2006);
Ballroom on the 41st floor;
First project with different
typologies in the same building;
39
CIRAGAN
SÃO PAULO (2007)
First project to
aggregate a residencial
and a commercial tower in
the same project
40
PARQUE ALFREDO VOLPI
SÃO PAULO (2007)
Very luxury
product, with unit
prices over US$ 5 mi
41
JK 1455
SÃO PAULO (2009)
42
LE PALAIS
RIO DE JANEIRO (2010)
Architecture inspired by two historical buildings in the complex;
The historical buildings were restored and adapted for the leisure
areas;
43
CENTRAL PARK MOOCA
SÃO 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
44
LE PARC
SALVADOR / 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
45
RISERVA GOLF
RIO DE JANEIRO (2014)
Unique project in Barra da Tijuca;
2016 Olympics golf course;
Average sqm. Price: from R$ 25 thd to R$ 30 thd.46
CYRELA BY PININFARINA
SÃO PAULO (2014)
Unique project in São Paulo (Vila Olímpia);
Price per sqm.: R$ 25 thd
47
ONE SIXTY
SÃO PAULO(2015)
CONTACT IR
Cyrela Brazil Realty S.A. Empreendimentos e Participações
Av. Presidente Juscelino Kubitschek, 1.455, 3rd Floor
São Paulo - SP – Brasil
CEP 04543-011
Investor Relations
Phone: (55 11) 4502-3153
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.
49