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Presentation – 1Q07 Results May 11, 2007
Presentation – 1Q07 ResultsMay 11, 2007
Company OverviewCarlos Medeiros - CEO
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► Largest regional mall owner in Brazil
– 16 regional malls (1 under construction)
– Total GLA: 548,111 m²
– Owned GLA: 225,228 m²
► Largest Service Company in Brazil
– Provides management and leasing services
– 33 regional malls + 2 strip malls + 2 business center = 37
– Total GLA: 1,008,496 m²
► Highly efficient and solid growth
– Adjusted EBITDA 1Q 2007¹: R$22.3 million (growth: 88.6%); EBITDA Pro Forma 06: R$61.4 million (CAGR: 04-06: 35%)
– Net revenue 1Q 2007: R$30.0 million (growth: 69.7%); Net revenuePro Forma 06: R$95.2 (CAGR 04-06: 20.4%)
1 Calculated excluding the effects of non recurring expenses related to IPO, to new acquisitions and to corporate restructuring
NorteShopping
Shopping Recife
Shopping Villa-Lobos
Who we are
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One of the largest construction, management and leasing company in Brazil
October 2006January 2007Acquired 36.8%
Acquired 0.68%
Acquired 100.0%
Acquired 10.0%
Acquired 50.0%
1949
October 2006Acquired 30.0%
February 2007
Acquired 100.0%
March 2007 April 2007
Acquired 6.9%Acquired 8.5%
Acquired 12.2%
Acquired 11.1%
Acquired 16.6%
MALL OWNERSHIP:
# of malls:
Total GLA:
Owned GLA:
SERVICE BUSINESS:
# of malls:
Total GLA:
7 7 8 9 11 16 16
235,829 235,829 252,612 337,820 396,911 548,111 548,111
90,201 101,434 107,923 193,131 206,983 220,873 225,228
24 24 24 24 37 37 37
691,027 691,027 691,027 691,027 1,008,496 1,008,496 1,008,496
May 2007
Acquired 17.6%IPO
What we have done
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Our Portfolio
Note: 1 Regional Mall under construction
BR Malls’ Portfolio – Total GLA (m2) and Total NOI 2006 (R$ million)
19%
44%
12%
16%9%
Ownership in regional malls
Management and leasing of regional malls
% of BR Malls’ total GLA
17.934,125
NOI (06)GLA
% BR Malls 11.1%
16.117,968
NOI (06)GLA
% BR Malls 12.2%
NOI (06) 9.3GLA 24,667
% BR Malls 34.2%NOI (06) 56.9GLA 61,205
% BR Malls 31.1%
16.937,444
NOI (06)GLA
% BR Malls 65.0%N/A
23,052
1
NOI (06)GLA
% BR Malls 8.0%
8.127,624
NOI (06)GLA
% BR Malls 8.5%
41.977,066
NOI (06)GLA*
% BR Malls 74.1%
26.827,337
NOI (06)GLA
% BR Malls 26.9%
24.046,875
NOI (06)GLA
% BR Malls 0.7%
6.852,010
NOI (o6)GLA
% BR Malls 100.0%6.4
14,755NOI (o6)GLA
% BR Malls 45.5%
12.339,234
NOI (06)GLA
% BR Malls 10.0%12.2
28,169NOI (06)GLA
% BR Malls 65.1%
3.619,857
NOI (06)GLA
% BR Malls 50.0%6.2
16,783NOI (o6)
GLA
% BR Malls 45.6%
* After 33,000 m² expansion opened in January 07
BR Malls’ Portfolio – Total GLA (m2) and Total NOI 2006 (R$ million)
19%
44%
12%
16%9%
Ownership in regional malls
Management and leasing of regional malls
% of BR Malls’ total GLA
17.934,125
NOI (06)GLA
% BR Malls 11.1%
16.117,968
NOI (06)GLA
% BR Malls 12.2%
NOI (06) 9.3GLA 24,667
% BR Malls 34.2%NOI (06) 56.9GLA 61,205
% BR Malls 31.1%
16.937,444
NOI (06)GLA
% BR Malls 65.0%N/A
23,052
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NOI (06)GLA
% BR Malls 8.0%
8.127,624
NOI (06)GLA
% BR Malls 8.5%
41.977,066
NOI (06)GLA*
% BR Malls 74.1%
26.827,337
NOI (06)GLA
% BR Malls 26.9%
24.046,875
NOI (06)GLA
% BR Malls 0.7%
6.852,010
NOI (o6)GLA
% BR Malls 100.0%6.4
14,755NOI (o6)GLA
% BR Malls 45.5%
12.339,234
NOI (06)GLA
% BR Malls 10.0%12.2
28,169NOI (06)GLA
% BR Malls 65.1%
3.619,857
NOI (06)GLA
% BR Malls 50.0%6.2
16,783NOI (o6)
GLA
% BR Malls 45.6%
* After 33,000 m² expansion opened in January 07
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Highlights-1Q 07Carlos Medeiros - CEO
6
Consolidated net revenue reached R$ 31.0 million69.7% increase when compared to the same period last year
Adjusted EBITDA equal to R$ 22.3 million88.6% increase when compared to the same period last yearEBITDA Margin reaching 71.8%
Conclusion of our IPO (Initial Public Offer) on April 5th 2007 Issuing 43,807,916 shares at the BOVESPA stock
exchange, raising approximately R$ 657 million
Acquisition of 4 shopping centers during the 1Q07 adding approximately 127.9 thousand m² in total GLA or 83.6 thousand m² in owned GLA
Highlights
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24.0
12.2
77.2%
66.8%
1Q 06 1Q 07
18.3
31.0
1Q 06 1Q 07
Strong Financial Results Net Revenue (R$mm)
69.7%
Adjusted EBITDA & Margin (R$mm)
88.6%
Growth Drivers
Service bussinessAcquisitionsNorteShopping expansionOrganic growth
Increase in NOI margin and gross marginGains of scale and operational leverageCost efficiency gains
Growth Drivers
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Successful IPO
100% Primary Offering
Successful IPO priced at the top of the range
IPO Offered Shares R$
40,351,928 605,278,920Base OfferOver –allotment shares 3,455,988 51,839,820
Total
Market Capitalization*43,807,916 657,000,000
2,243 billion
* Closing Price on 05/10/07 = R$ 15,60/share
Ownership StructurePre IPO Post IPO
Institutional - USA
Institutional - Brazil
Institutional - Europe
Institutional - OthersIndividuals
Equity International
28%
Founding Partners44%
GP Investments28%
Free Float30%
Equity International
19%
Founding Partners32%
GP Investments19%
33%
7%
28%
31%
2%
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Consistent and focused strategy
BR Malls has done more than any other competitor during the last 7 months
Regional Mall Acquisitions under new management (EI and GP) and since October 2006
83% growth
Oct/06 May/07
7 months
Total acquisition: R$298 millionTotal acquisition: R$298 million
123.4
225.2
101.8
Owned GLA Acquisitions Current owned GLA
Additional total NOI 2006: R$ 28.2mm1
Additional total NOI 2006: R$ 28.2mm1
# malls owned: 129%Total GLA: 132%Service business: 54%
# malls owned: 129%Total GLA: 132%Service business: 54%
Growth:Growth:
1 Includes Net Income from DEICO
Acquisitions
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Acq
uisi
tions
1Q
’07
Goiânia Shopping – January, 2007 Shopping Estação – February, 2007
Pantanal Shopping – March, 2007Araguaia Shopping– March, 2007
Deico – March, 2007
► GLA: 6,488 m² (39% acquired)► NOI 06: R$2.4 mm
► Goiânia (GO)► Consumption Profile: mid-high
income
► GLA: 52,010 m² (100% acquired)► NOI 06: R$6.8 mm
► Curitiba (PR)► Consumption Profile: mid-high
income
► GLA: 3,923 m2 (10% acquired)
► NOI 06: R$1.2 mm► Cuiabá (MT)► Consumption Profile: mid-high
income
► GLA: 9,928 m² (50% acquired)► NOI 06: R$1.8 mm
► Goiânia (GO)► Consumption Profile: mid-low
income
► Second largest service company in Brazil
► 9 malls under management ► 13 malls with leasing services
• Total investment in the first quarter was of approximately R$156 mm
• Total GLA added: 127.9 thousand m2
• Owned GLA added: 72.4 thousand m2
Acquisitions – 1Q‘07
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Goiânia Shopping – April/2007
Shopping Piracicaba – April/2007
Shopping ABC – April/2007
Amazonas Shopping – April/2007
Acq
uisi
tions
afte
r 1Q
’07
► GLA: 317 m² (1% acquired)► NOI 06: R$162,000
► ABC Paulista region (SP)► Consumption profile: mid-high
income
► GLA: 1,158 m² (7% acquired)► NOI 06: R$429,000
► Goiânia (GO)► Consumption profile: mid-high
income
► GLA: 3,785 m² (11% acquired)
► NOI 06: R$2.0 mm► Manaus (AM)► Consumption profile: mid-
low income
► GLA: 2,346 m2 (9% acquired)► NOI 06: R$692,000
► Piracicaba (SP)► Consumption profile: mid-high
income
► GLA: 2,184 m² (12% acquired)
► NOI 06: R$2,0 mm► Belém (PA)► Consumption profile: : mid-
low income
► GLA: 8,455 m² (34% acquired)
► NOI 06: R$3,2 mm► Maceió (AL)► Consumption profile: mid-low
income
• Total investment after the first quarter was of approximately R$106 mm
• Total GLA added: 151.2 thousand m2
• Owned GLA added: 18.2 thousand m2
Acquisitions – post 1Q‘07
Shopping Iguatemi Belém – April/2007
Shopping Iguatemi Maceió – April/2007
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Internal Organization
Preparing BRMALLS for an accelerated growth.....
Processes and Systems
Define, detail, implement new process for BR Malls and shoppings
Match process with new ERP System – Oracle
Hired INDG (Best Brazilian Process Consulting firm)
People
Hired 34 new employees
New Trainee Program: Hired 11 trainees
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1Q07 Financial and Operational Results
Leandro Bousquet - CFO
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19.8
33.0
1Q 06 1Q 07
Financial Results
66.9%
Gross Revenue (R$ mm) Gross Revenue Breakdown
Key Money3%
Parking13%
Others0%
Services provided15%
Rent69%
Minimum80%
Percentage of Sales8%
Mall & Merchandising
12%
Key Money3%
Parking13%
Others0%
Services provided15%
Rent69%
Minimum80%
Percentage of Sales8%
Mall & Merchandising
12%
7.1
6.1
1Q 06 1Q 07
Costs of Rent & Services (R$ mm)
16.5%
Gross Profit (R$mm) and gross margin (%)
96.2%
24.0
12.2
77.2%
66.8%
1Q 06 1Q 0715
Financial Results (cont’d)
EBITDA (R$mm) & EBITDA margin
64.6%
71.8%
88.6%
22.3
17.9
11.9
1.5 1.02.0
1Q06 1Q07 IPO Expenses AcquisitionExpenses
Restructuringexpenses
Adjusted 1Q07
64.6%
71.8%
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NOI (R$mm) NOI/m2 (R$)
Rent/m2 (R$)
14.8
22.7
1Q 06 1Q 07
206.4
168.6
1Q 06 1Q 07
Rent (R$mm)
175.2
165.6
1Q 06 1Q 07
53.0%22.4%
53.0%5.8%
Operational performance
22.4
14.7
1Q 06 1Q 07 17
2,607.4
2,297.6
1Q 06 1Q 07
6.5%6.0%
6.8% 6.1%
1Q 06 1Q 07
96.7% 94.9%
1Q 06 1Q 07
5.2%
3.6%
1Q 06 1Q 07
Operational performance (cont’d) Same store sales/m2 (R$) Turnover (%)
Occupancy cost as a % of Sales (%)Occupancy (%)
13.5% -30.7%
-1.8% -9.2%
Rent
Othercosts
13.3% 12.1%
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Debt and Cash Position
12%
4%
7%
77%
US$ R$ CDI IGP-M
Dec - 06 Mar - 07 ∆ %∆∆
Short-term
Long-term
Total
Cash
Net Debt
Net Debt/EBITDA1
R$ 25,188 R$ 12,211 (R$ 12,977)
R$ 39,342 R$ 174,525 R$ 134,981
R$ 122,004
(R$ 37,363)
R$ 159,367R$ 111,681
R$ 186,534
R$ 74,853
R$ 64,530
R$ 112,213
(R$ 47,686)
-0.8x 1.6x
48.5%
443.1%
289.1%
66.7%
-234.2%
Cash and Debt Balance Debt Indexation
Increase in long short debt position was due to two Real denominated loans issued in February 2007 with Banco Unibanco and Banco Itau for R$ 70 million each to financethe acquisitions transactions closed in this period
Cash position on March 31st does not reflect the proceeds from the IPO
1 Net debt/Ebitda Mar 07 uses LTM Ebitda
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CAPEX
7%2%
1%
90%
New Acquisitions
Norte Shopping’s Expansion
Maintenance
BRMalls Headquarter and Office
Total Expenditure for 1Q 2007 was equal to R$ 172.0 million compared toR$ 3.9 million for the same period in 2006
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