Post on 25-Dec-2019
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$ 3.5 billion (As of June, 2018)
64% 15%*32%
Free-float FoundersTop
Shareholders
26.0%36.9%
4
South16%
São Paulo – Other cities6%
63%
Rio de Janeiro
15%
São Paulo
• National Scale: brAA-• 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) – 2Q18 Rating
* Free-float includes Top Shareholders
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 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
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 deep
industry
Solid balance sheet (largest real estate company in Brazil
by market cap)
Expertise in designing innovative projects
Strong Brand: prize Top Imobiliário 2018 (Real estateDevelopment and Construction), Brazilian leaders 2017
8
1
3
4
5
6
7
8
2
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
Winner in the category of Brand Communication with the“Identidade Cyrela” [Cyrela Identity] case, about the brandingproject the Company launched in 2013
In 2018, Cyrela won the 3rd place for Incorporating category and 6th place in Construction category for the “Prêmio Top Imobiliário”.
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 PRACTICES
ENVIRONMENTAL 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
Partnerships
Startups
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 THE
ONES THAT ARE 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’s15
100%80%60%40%20%0%
81%
2013 91%
2014 94%
2015 95%
2016 93%
2017 96%
2T18 96%
2008 28%
2009 34%
2010 47%
2011 60%
2012
+100.0%0% +20.0% +40.0% +60.0% +80.0%
79%
6M18 64%
68%
2009 78%
2010 77%
2011 79%
2012 69%
2013 70%
2014 83%
2015 81%
2016 75%
2017
2008
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
Gross Margin Gross Margin EX Ret / Riserva Golf
32.8%
29.9% 29.9%
39.8%
24.6%
26.8%
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%
+20%
ExampleAssumptions: Loan-to-Value 80% (LTV)
25.0% 25.0%
17
Income Comitment
2017
R$400,000
9.5% p.a
35 years
R$ 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
18
Financial strenght, credibility and entrepreneurship
JV’s
SPRJSUL
THE WAY CYRELA PLAYS IN THE REAL ESTATE MARKET
USING AN INTEGRATED BUSINESS PLATFORM
19
Luxury / High End
Middle Income
Economic
Cyrela
Overview;
History;
Strategic focus;
Operational figures;
Financial indicators;
Portfolio.
AGENDA
20
PSV of R$ 43.0 bn (100%) and R$ 39.0 bn (%CBR) in 2Q18.
75% of landbank acquired through swaps.
(R$ billion)
LANDBANK
1329
São Paulo
14
Total
14
9
Rio de Janeiro
2
South Others
43 23
5
Swap agreement
21
Cyrela – Landbank (100%) – 2Q18
Direct employees
OPERATIONAL HISTORY
22
20142008 20122009 2010 20132011 2015 2016 6M18
2.9
5.7
7.7 8.0
5.66.6
5.8
2.9 3.1
1.4
+40%
-61%
2012
9.0
20092008 2010 2011 2013 2014 2015 2016 6M18
27.626.4 26.123.4
9.7
27.9
13.1
8.45.2
+5%
-68%
2008 201220102009 2011 2013 2014 2015 2016 6M18
5.26.2 6.5
6.0
7.2
5.7
3.42.8
3.3
1.7
+38%-54%
514
946 984820 740
2010 20152008 20112009 20142012 2013 2016 2017
1,3731,512
1,728
1,4601,264
+236%-53%
Launches - PSV (R$ billion) Launched units (thd.)
Pre Sales - PSV (R$ billion)
CYRELA
OPERATING RESULTS
18 projects launched in 6M18, 39 in 2017, 32 in 2016 and 91 in 2015;
5.5 thd units sold in 6M18, 10.2 thd in 2017, 8.7 thd in 2016 and 9.0 thd in 2015.
23
0.7
2014
2.9
2.4
0.5
2013
5.9
4.9
6M18
1.4
0.9
0.5
2016
3.0
0.9
2015
2.1
2.9
7.9
6.3
1.6
2009
7.6
6.0
1.7
2008
5.7
2.2
1.21.0
2012
6.6
4.64.5
2011
5.6
3.9
1.7
2010
2.0
CBRPartners
0.6
2014
3.4
2.6
2012
7.2
5.1
2.1
2011
6.0
4.4
1.6
2010
6.5
6M18
3.3
2.4
0.9
2015
2.75.3
1.2
2009
6.2
4.8
1.4
2008
5.3
4.0
1.1
0.6
2016
1.7
2.1
1.3
0.8
2013
5.7
4.7
1.0
Launches - R$ Billion Pre-Sales - R$ Billion
SALES
(R$ billion)
24
South3,5%
North and Others
São Paulo - Other Cities 65.7%
São Paulo
8.8%
17,5%
Rio de Janeiro
2,7%
1,8%
Northeast
20092008
6.0
2015201220112010 2013 2014 6M182016
5.75.3
6.2 6.57.2
3.42.8
3.3
1.7
+38%
-54%
1Q182Q17
34.0%
3Q17 2Q184Q17
30.8% 32.7%35.2%
37.9%
Pre Sales - PSV (R$ billion) Sales per Region – 2018
Sales Speed - 12M
SALES BY VINTAGE
(R$ million)
25
Sales Speed of the last 12 months attained 37.9% in 2Q18.
559436
835 923120
245246
196
505
196
505
1
6M17
1,061
2Q17 2Q18
1,276
6M18
756
1,674
+40%
+31%
31%
50%
44%
29%
51%
16%
20%
14%
28%
9%
6%
9%
3%
7%
6%
4Q17
2Q17
1Q18
3Q17
2Q18
65%
83%
67%
57%
In 3 months
In 12 monthsIn 6 months
In 15 monthsIn 9 months
Quarter’s Launches
Previous Years Launches
Previous Quarters Launches
Sales by vintage of lauchings Sales by vintage of lauchings – SoS 12M
INVENTORIES
R$ 5.8 billion of inventory (R$ 4.8 billion %CBR) in 2Q18.
26
3,588
3,102
2,588
6,441
2,4662,656
3,9753,556
6,176
2Q17 3Q17 4Q17
2,595
3,318
1Q18
6,212
2,687
2Q18
5,913 5,789
Finished
Under Construction
Inventories – Market value (R$ MM) Inventories – Delivery date
Inventory to be
DeliveredTotal Consolidation Equity Method
Finished 3,102 2,839 263
12 Months 736 563 173
24 Months 1,229 1,043 185
36 Months 473 424 49
48 Months 248 116 133
Total 5,789 4,985 804
27
TOTAL INVENTORY
Inventory
1Q18
-373.5
-182.0
Launches
2Q18
-505.4
Price
change
Sales of
inventories
981.3
Sales of
launches
2Q18
-43.95,789.3
Inventory
2Q18
5,912.8
-555.5
-2.1%
Inventory under construction Finished inventory
São Paulo
São Paulo - Other Cities
2.3%Northeast
Rio de Janeiro
North
1.5%
12.5%
25.1%
South5.0%
Others
34.7%
18.9%
Change in Inventory Inventory Breakdown – 2Q18
(R$ million)
R$ 3,102 million of finished inventory in 2Q18 (vs. R$ 2,595 million in 1Q18).
(R$ million)
FINISHED UNITS INVENTORY
28
Price change
Finished Units 1Q18
-182
PSV Delivered
Sales of finished
units
754-65
Finished Units 2Q18
2,595
3,102
+19.6%
4.3%
Rio de Janeiro
São Paulo
São Paulo - Other Cities
Northeast
22.7%
South 1.4%
North
3.7%
Middle WestEspírito Santo
Minas Gerais
15.9%
37.4%
14.6%
Finished Inventory Finished Units Breakdown – 2Q18
5.1 thousand units delivered in 2Q18 in 17 projects. In the 6M18, 8.3 thousand units delivered in 30 projects;
Middle + MCMV: 4.0 thousand units delivered in 9 projects in 2Q18. During the first semester, 6.6 thousand units
delivered in 18 projects.
The units delivered in 2Q18 represented launches PSV of R$ 2.1 billion. In the 6M18, deliveries represented
launches PSV of R$ 3.15 billion.
DELIVERED UNITS
29
2016
13.2
9.211.8
1.7
11.6
2013
8.3
2014
9.1
14.8
2015
24.1
10.2
13.011.1
6.5
2017
5.1
6M17
6.6
3.5
6M18
8.9
2012
15.2
25.0
20.8
23.9
8.6
21.319.5
-3%
High end Middle + MCMV
763287
2,145
558
6M17
718
2Q18
1,2541,587
1Q18
491
2Q17
1,363
945
1,875
1,276
6M18
1,005
2,309
3,151
+113% +71%
+36%
PSV Delivered
(R$ billion)
Units Delivered
(thd units)
3.51.7
AGENDA
Cyrela
Overview;
History;
Strategic focus;
Operational figures;
Financial indicators;
Portfolio.
30
FINANCIAL RESULTS
(R$ million)
Margin
31
Gross Revenue Gross Profit and Gross Margin
Net Income and Net Margin
(R$ million)
Margin
(R$ million)
Margin
* Previous periods are presented in pro forma way, considering MAC thru Equity Results.
591 658464
2Q17 2Q18
1,248
1Q18 6M17
1,122
6M18
+11% +42%
-10%
154 125
351 296171
26.7%
2Q17 6M17
26.8% 27.7%
2Q18 1Q18
28.9% 27.2%
6M18
+12% +37%
-16%
-141
-51
-137
-80
1Q18
-24.5%
2Q17
-4.4% -11.4%
2Q18
-11.3%
6M17
-7.3%
6M18
-28
COVENANTS
<= 0,80TOTAL DEBT+ PROPERTIES PAYABLE - SFH DEBT - DISPOSALS
EQUITY
RECEIVABLES + PROPERTY FOR SALE
NET DEBT - PROPERTIES PAYABLE - UNRECOGNIZED COSTS AND EXPENSE
EBIT
FINANCE COSTS>= 1.5 or <0
>= 1.5 or <0
0.07
-0.08
0.16
-0.06
0.07
0.004
3.58
0.00
4.24
7.329.33
11.66
8.90
12.70
-17.81
0.00-43.57
2288.90
-205.88
-3.32 -2.67 -3.93
-2.78
6.09
RETURN ON EQUITY
Return on Equity (net income LTM / Average Shareholders’ Equity LTM ex - minorities) attained -0.7% 2Q18.
33
-1.5%
2Q17 3Q17 4Q17
-1.6%
1Q18 2Q18
-1.9%
-2.6%
-0.7%
HEALTHY LIQUIDITY AND DEBT INDICATORS
(R$ billion)
2Q18
14.4%
2017
19.4%
2016
25.1%
2015
22.2%
2014
32.8%
2013
39.6%
34
SFH1.2
Corp.1.0
Gross Debt 2Q17
3.4
SFH2.1
Corp.1.2
Net Debt
0.8
Cash and Cash Equivalents
1.5
Term
2.4
1.3Long
1.1Short
Gross Debt 2Q18
2.4
SFH1.1
Corp1.3
Gross Debt 1Q18
2.1 IndicatorsTotal Debt
DebtEx-SFH
Net Debt/ Equity
14.4%
Average CostW/o SFH: 100% CDISFH: TR + 9.1% p.a.
Duration 1.8 year 1.6 year
Short Term 45% 52%
Long Term 55% 48%
Debt
Net Debt / Equity
TRANSFERS, PAYOFFS AND TRUST OF DEEDS
In 2Q18, the volume of transfers, payoffs and trust of deeds attained R$ 940 million, 27% higher than 1Q18 and 2Q17.
(R$ million)
UnitsVolume
(Thd. units)
461
651552
226
223
158
+27%+27%
1Q18
743
33
2Q18
940
66
2Q17
740
53
TransfersTrust of DeedsPayoffs
1Q18
3.5
2.7
0.1
0.7
2Q18
4.3
3.3
0.2
0.8
2Q17
3.1
+39% +23%
2.2
0.1
0.8
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
36
CASH GENERATION*
(R$ million)
* Ex dividends, buyback and stake acquisition37
Cash generation of R$ 181 million in 2Q18 and R$ 363 million in 6M18.
64
181 184
202
6M17
84
2Q182Q17
20
6M181Q18
181 182
363
+115% -0.5%
+80%
Stake Acquisition
2
** Previous periods are presented in pro forma way, considering MAC thru Equity Results.
Cyrela
Overview;
History;
Strategic focus;
Operational figures;
Financial indicators;;
Portfolio.
AGENDA
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)
HERITAGE
SÃO PAULO(2017)
CONTACT IR
Cyrela Brazil Realty S.A. Empreendimentos e Participações
Av. Brigadeiro Faria Lima, 3.600 – 12th Floor
São Paulo - SP – Brasil
Zip Code 04538-132
Investor Relations
Phone: (55 11) 4502-3153
ri@cyrela.com.br
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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