Presentation
HeritageSão Paulo - SP
Cyrela
Ø Overview;
Ø History;
Ø Strategic focus;
Ø Operational figures;
Ø Financial indicators;
Ø Portfolio.
AGENDA
2
Cyrela
Ø Overview;
Ø History;
Ø Strategic focus;
Ø Operational figures;
Ø Financial indicators;
Ø Portfolio.
AGENDA
3
CYRELA AT A GLANCE
Ø Leadership position in the industry
Ø More than 50 years of history
Ø ~ 2.500 employees (construction + administrative)
Ø More than 200,000 clients
Ø Receivables – R$ 3.8 billion (As of March, 2019)
70% 12%*30%
Free-float Founders Top Shareholders
26.0%36.9%
4
• National Scale: brAAA• 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) of 1Q19 Rating
* Free-float includes Top Shareholders
83,7%
16,3%
São Paulo
Others
Cyrela
Ø Overview;
Ø History;
Ø Strategic focus;
Ø Operational figures;
Ø Financial indicators;
Ø Portfolio.
AGENDA
5
SOLID TRACK RECORD
ØCyrela is foundedas a land brokerin São Paulo; ØExpansion to Rio de
Janeiro and other states;ØCyrela’s IPO;
ØSpin-off of Properties Division ( Cyrela Commercial Properties);
Ø1st debenture offering (out of a serie of 6 debentures);
Ø1st receivables back securities (CRI’s) offering (out of a serieof 8 CRI’s);
ØLaunch of facebook sales channel;
Ø8th CRI’s emission.Ø10th debenture offering;
60’s 80’s and 90’s ´00-’10 ´11-´18
ØVertical integration;
ØLand brokerØDeveloper
ØCyrela becomes listed company.
Foundation Integration Expansion Consolidation
6
ØDividend payout: approximately 25% of its adjusted net income
Ø Internal committees in line with the best corporate governance and risk mitigation practices
ØCorporate governance practices, based on principles that privilege transparency
Ø Business management. Follow-up and accountability models are based on strict ethical principles
Ø Board of directors made up of at least 5 members
ØAt least 20% should be independent members
Ø Ensure at least 25% of the total stock is available for trading
ØAdopt public offer procedures that favor the shareholding dispersion
ØMinimum standards for quarterly disclosure of information
Ø Stock option programØAllow 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 deepindustry
Solid balance sheet (largest real estate company in Brazilby market cap)
Expertise in designing innovative projects
Strong Brand: prize Top Imobiliário 2018 (Real estateDevelopment and Construction), Brazilian leaders 2017
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1
3
4
5
6
7
8
2
RECENTS AWARDS
The Customer Relationship area won the "Best Companies in Customer Satisfaction Award" in 2018 - Instituto Mesc
Mr. Elie Horn was honored at the 24th “Prêmio Master Imobiliário” of 2018 in the "Hors Concours" category for his workwith the “Instituto Cyrela” for Early Childhood and TeenageEducation.
The company got the Most Respect to Consumers Award 2018 -Modern Consumer.
Cyrela was recognized as one of the 100 Most InnovativeCompanies in IT Use by “IT Mídia 2018”. The winning projectwas CashMe, our Home Equity’s Fintech.
In 2018, Cyrela won the 3rd place for Incorporation category and6th place in Construction category for the “Prêmio Top Imobiliário”.
Cyrela is in Valor Econômico newspaper’s as 100 most innovative companies of “Anuário Inovação Brasil” Ranking. 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.
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
Ø Sustainable Production
Ø Environmental policy for suppliers
Ø Benchmark in waste management
Ø Recycling Program
Ø 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 PRACTICESENVIRONMENTAL INITIATIVES
11
Distinctive environmentally-friendly practices
Cyrela
Ø Overview;
Ø History;
Ø Strategic focus;
Ø Operational figures;
Ø Financial indicators;
Ø Portfolio.
AGENDA
12
ExecutionØ Cost controlØ Systems and process improvementØ Corporate EngineeringØ Bonus – focus on deliveries
Company LongevityØ Leader’s developmentØ MeritocracyØ Cyrela’s cultura
Financial DisciplineØ Focus on marginØ “Cost Culture”Ø Leverage Reduction
Back to Cyrela “DNA”Ø Focus on mid to high-end productsØ Living as a brandØ MCMV through Cury
BACK TO BASICS...PROCESS THAT STARTED IN 2010
GovernanceØ CommiteesØ Processes and policies
Back to Basics
13
Back to Basics
PartnershipsStartups
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 THEONES THAT ARE IN LINE WITH CYRELA’S STRATEGY
SHIFT IN STRATEGY HAS ALREADY TRANSLATED INTOMORE 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
89%
96%
96%
93%
95%
81%
60%
47%
34%
28%
20.0%0.0% 40.0% 100.0%60.0% 80.0%
2017
1Q19
2018
2016
2010
2015
2013
2014
2012
2011
0% +100.0%+20.0% +80.0%+60.0%+40.0%
2018
2012
79%
68%
1Q19
2017
2016
2015
2014
2013
83%
2011
2010
78%
70%
75%
81%
70%
77%
69%
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
29,9%
32,8%35,1%
39,8%
30,7% 30,9%
25,1%
30,1%
3Q13
4Q13
1Q14
1Q15
2Q15
3Q15
4Q15
1Q16
2Q16
3Q16
4Q16
1Q17
2Q17
3Q17
4Q17
1Q18
2Q18
3Q18
4Q18
1Q19
Gross Margin Gross Margin EX Ret / Riserva Golf
ECONOMIC CYCLES
Fonte: Banco Central do Brasil
Interest
Unemployment
Trust
Mortgage
Deliveries
Cancellations
Savings
Inventories
Mortgage
Availability
Prices
2014 - 2017
2018-2019
Slowly Recovering
Cancellations Inventories Prices
Interest
Mortgage
Trust
Unemployment
Deliveries
Launches
2014
MORTGAGE RATE INCREASE BRINGS MORE SALES CANCELLATION
2016
Unit value
Interest Rate (TR+)
Loan term
1st installment - SAC
Monthly Income
R$400,000
9% p.y
35 years
R$ 3,068
R$ 12,273
R$400,000
11.5% p.y
35 years
R$ 3,678
R$ 14,712
+2.5%
+20%
ExampleAssumptions: Loan-to-Value 80% (LTV)
25.0% 25.0%
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Income Comitment
2018
R$400,000
9% p.y
35 years
R$ 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
19
Financial strenght, credibility and entrepreneurship
JV’s
ØSPØRJØSUL
THE WAY CYRELA PLAYS IN THE REAL ESTATE MARKETUSING AN INTEGRATED BUSINESS PLATFORM
20
Luxury / High End
Middle Income
Economic
Cyrela
Ø Overview;
Ø History;
Ø Strategic focus;
Ø Operational figures;
Ø Financial indicators;
Ø Portfolio.
AGENDA
21
Ø PSV of R$ 41 bn (100%) and R$ 36.9 bn (%CBR) in 1Q19.
Ø 75% of landbank acquired through swaps.
(R$ billion)
LANDBANK
27
14
5
Total
14
8
22
Rio de Janeiro
13
São Paulo
1
South Others
41
CH Swap agreement
22
Cyrela – Landbank (100%)
Direct employees
OPERATIONAL HISTORY
23
3.1
2010 2011 2012 201520142013 2016 2017 2018 1T19
4.85.6
8.07.76.6
2.9
5.8
2.9
0.5
+5%-11%
2015 201720142010 2011 20162012 2013 2018 1T19
27.626.4 27.926.123.4
13.18.4 9.7 9.0
2.2
+1%
-25%
20132010 2011 2012
5.1
2014 2016
7.2
2015 2017 2018 1T19
3.4
6.2 6.5
2.8
6.0 5.7
3.3
1.0
-2%-3%
984820 740 745
20152011 20162010 2012 2013 2014 2017
1,460
2018
1,7281,512
1,2641,373
+14%
-11%
Launches - PSV (R$ billion) Launched units (thd.)
Pre Sales - PSV (R$ billion)
CYRELAOPERATING RESULTS
Ø 9 projects launched in 1Q19, 60 projects launched in 2018 and 39 in 2017.
Ø 3.3 thd units sold in 1Q19, 14.5 thd units sold in 2018 and 10.2 thd in 2017.
24
2.2
4.9
1.2
4.5
5.7
2010
6.0
1.6
2.0
6.3
2012 2014
4.63.9
2013
5.6
2.9
1.0
7.6
2015 2017
1.7
0.5
0.12.4
2016
0.7
2011
2.9
2.1
2018
1.7
0.4
0.9
7.9
6.6
5.8
3.1
0.5
1T19
CBRPartners
5.3
1T192014
1.2 5.7
4.8
2010 2011
1.6
4.4
2012 2017
7.2
2013
3.5
1.0
2.1
0.32.1
0.8
2.6
4.7
2015
0.6
2016
2.8
5.1
5.1
1.4
0.9
2.4
1.6
2018
0.8
6.26.5
6.0
3.4 3.3
1.0
Launches - R$ Billion Pre-Sales - R$ Billion
SALES
(R$ billion)
25
São Paulo South
11.2%
Rio de Janeiro
São Paulo - Other Cities
North and Other
57.7%
14.0%
7.0%
10.1%
201220112010 2013 2014 2015 2016 2017 2018 1T19
6.56.27.2
6.0 5.7
3.42.8 3.3
5.1
1.0
-2%-3%
1Q192Q181Q18 3Q18
39.4%37.9%
4Q18
35.2%
45.1%49.6%
Pre Sales - PSV (R$ billion) Sales per Region
Sales Speed - 12M
SALES SPEED§ The SOS12M of 1Q19 attained 49.6%.
Pre – Sales by Launch Period(R$ million)
Sales Speed
126280
487
764
1Q18 1Q19
1,044
613
+70.3%
Quarter’s Launches
Previous Years Launches
78%
6%
1Q19
28% 5%7%1Q18 9%29%
3%14%51%
8%
2Q18
20%
9%
49%3Q18
66%4Q18
51%
74%
77%
74%
51%
In 3 months In 15 monthsIn 6 months In 12 months
In 9 months
INVENTORIES
27
Inventories – Market value (R$ MM) Inventories – Delivery date
4.843 4.769 4.582 4.536 4.057
1.070 1.020 992 1.128962
1Q18 4Q182Q18 3Q18
5,574 5,664
1Q19
% CBR
5,913 5,7895,019
Inventory to be delivered Total Consolidation Equity
Finished 2,216 1,918 297 12 Months 874 589 285 24 Months 1,266 853 413 36 Months 512 416 96 48 Months 152 152 - Total 5,019 3,928 1,091
• R$ 5,019 billion in inventories (R$ 4,057 billion %CBR) in 1Q19.
28
TOTAL INVENTORY
Inventory under construction Finished inventory
Change in Inventory Inventory Breakdown – 1Q19
(R$ million)
Launches 1Q19
Inventory 4Q18
547-489
Inventory 1Q19
-275
Sales of inventories
-280
Sales of launches
1Q19
-147
Price change
-764
5,019
5,664-11.4%
41,5%
16,0%
22,4%
12,4%
7,7%South
São Paulo
São Paulo - Other Cities
Rio de Janeiro
Others
Ø Decrease of 11.4% in total inventory, from 5,664 million in 4Q18 to 5,019 million in 1Q19
§ R$2,216 million of finished units inventories (vs. R$2,493 million in 4Q18).
Finished Units(R$ million)
Breakdown
FINISHED UNITS
Sales of finished
units
-275
Finished Units 4Q18
58
Price change
PSV Delivered
-59 2,216
Finished Units 1Q19
2,493-11.1%
16,2%
24,6%
38,5%
13,8%
6,9%South
São Paulo
Rio de Janeiro São Paulo - Other Cities
Others
§ 1,445 units delivered in 1Q19, in 5 projects, all are from the Middle + MCMV segments.
§ The units delivered in the quarter represent launches PSV of R$357 million.
DELIVERED UNITS
6.5
13.2
5.3
2013
0.4
11.6
2014
6.58.9
9.1
6.6
8.3
2015
19.5
3.3
2.7
10.2
4.3
2016
6.5
4.1
9.0
2017 2018
6.8
1.0
21.3
1T19
25.0
20.8
24.0
14.32.1
High end
Middle
MCMV
287
48115
323
4Q18
183
174
1Q19
485
233
1Q18
486
357
1,005
-27% -64%
Delivered PSV
(R$ million)
Delivered Units
(thd units)
AGENDA
Cyrela
Ø Overview;
Ø History;
Ø Strategic focus;
Ø Operational figures;
Ø Financial indicators;
Ø Portfolio.
31
(R$ million)
125
249314
27,7% 30,1% 25,1%20
1Q18 1Q19 4Q18
+99.5% -25.5%
Gross Profit and Gross MarginNet RevenueMargin
-51
48116
1Q19
-11.4%
8.7%
1Q18
5.9%
4Q18
Net Income and Net Margin
451
826
1.078
254
1Q191Q18 4Q18
1,331
+83.4% -37.9%
FINANCIAL RESULTS
Provision for Cancellations Non-Recurring
0.16
0.05
-0.08
-0.02
0.09
4.245.45
9.0710.64
8.90
5.22
COVENANTS
<= 0,80TOTAL DEBT+ PROPERTIES PAYABLE - SFH DEBT - DISPOSALS
EQUITY
RECEIVABLES + PROPERTY FOR SALE
NET DEBT - PROPERTIES PAYABLE - UNRECOGNIZED COSTS AND EXPENSE
EBITFINANCE COSTS >= 1.5 or <0
>= 1.5 or <0
-43.57 -58.55
2288.90
-17.45 -3.08
-3.28
-3.93 -12.20
RETURN ON EQUITY
Ø Return on Equity (net income LTM / Average Shareholders’ Equity LTM ex - minorities) attained 0.3% 1Q19.
34
-2.6%
1Q18 1Q193Q182Q18 4Q18
-2.7%
-0.7%
-1.6%
0.3%
LIQUIDITY AND DEBT§ Net Debt / Equity attained 12.0%.
Debt
(R$ billion) Indicators Total Debt
DebtEx-SFH
Net Debt/ Equity 12.0%
Average Cost W/o SFH: 113.4% CDISFH: TR + 8.2% p.y.
Duration 2.8 y 2.7 y
Short Term 10% 13%
Long Term 90% 87%
1.2
1.0
Gross Debt 4Q18
0.6
Gross Debt 1Q18
1.61.5
0.8
Gross Debt 1Q19
0.2
1.9
Term
1.4
Cash and Cash
Equivalents
Net Debt
2.12.12.4
2.1
0.7
Corp.Corp.
Corp.
Short
SFHSFH SFH
Long
20152014
32.8%
22.2%
2017
25.1%18.8%
2016
14.8%
2018
12.0%
1T19
Net Debt / Equity
TRANSFERS, PAYOFFS AND TRUST OF DEEDS
§ In 1Q19, the volume of transfers, payoffs and trust of deeds attained R$625 million, 14.6% lower than
4Q18 and 15.9% lower than 1Q18.
(R$ million)
UnitsVolume
(Thd. units)
552 497 546
158110
166
1Q19 4Q18
1833
1Q18
20
744625
732-15.9% -14.6%
Payoffs Trust of Deeds Transfers
0.70.1
2.4
0.5
2.7
1Q18
0.1
1Q19
0.70.1
3.0
4Q18
3.52.9
3.8-14.9% -21.9%
CASH GENERATION*(R$ million)
§ Cash generation of R$ 150 million in 1Q19.
*Ex dividend payment, buyback program and stake acquisition.
181
(R$ million)
137 150182
150
1Q191Q18
2
4Q18 1Q19
137150
184
150
+9.0%
-18.3%
Non Recurring
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
38
Cyrela
Ø Overview;
Ø History;
Ø Strategic focus;
Ø Operational figures;
Ø Financial indicators;;
Ø Portfolio.
AGENDA
39
MANDARIMSÃO PAULO (2006)
Ø The tallest residential
building in latin america (2006);
Ø Ballroom on the 41st floor;
Ø First project with different
typologies in the same building;
CIRAGANSÃO PAULO (2007)
Ø First project to aggregate a residencial and a commercial
tower in the same project
PARQUE ALFREDO VOLPISÃO PAULO (2007)
Ø Very luxury product, with unit prices over US$ 5 mi
JK 1455SÃO PAULO (2009)
LE PALAISRIO DE JANEIRO (2010)
Ø Architecture inspired by two historical buildings in thecomplex;
Ø The historical buildings were restored and adapted for
the leisure areas;
CENTRAL PARK MOOCASÃO PAULO (2010)
Ø First mover in a industrial area of São Paulo (Mooca)Ø Innovative product, creating a park inside the project
Ø All of its 560 units were sold in 10 days
LE PARCSALVADOR / BAHIA (2012)
Ø Largest Cyrela’s project;Ø 18 towers, 1.138 units;Ø PSV of R$ 1 billion (2013 value);ØIn the middle of the project, there is a 10,000 sqmt leisure facility.
RISERVA GOLFRIO DE JANEIRO (2014)
Ø Unique project in Barra da Tijuca;
Ø 2016 Olympics golf course;Ø Average sqm. Price: from R$ 25 thd to R$ 30 thd.
CYRELA BY PININFARINASÃO PAULO(2014)
48
Ø Unique project in São Paulo (Vila Olímpia);
Ø Price per sqm.: R$ 25 thd
ONE SIXTYSÃO PAULO(2015)
HERITAGESÃO PAULO(2017)
RIO BY YOORIO DE JANEIRO
IBIRAPUERA BY YOOSÃO PAULO
CONTACT IR
Cyrela Brazil Realty S.A. Empreendimentos e ParticipaçõesAv. Brigadeiro Faria Lima, 3.600 – 12th FloorSão Paulo - SP – BrasilZip Code 04538-132
Investor RelationsPhone: (55 11) 4502-3153 [email protected]
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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