2 Q07 Earnings Presentation

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2 Q07 Earnings Presentation

  1. 1. Presentation – 2Q07 Results August 8 2007 A t
  2. 2. Company Overview Carlos Medeiros - CEO 2
  3. 3. Who we are The largest shopping mall company in Brazil present in all of the five regions in the country and operating malls in all income segments Company Overview C O i Our Portfolio O P tf li ► Largest regional mall owner in Brazil 7% 13% – 27 regional malls (1 under construction) – Total GLA: 787,858 m² – Owned GLA: 353,084 m² ► Largest service company in Brazil g p y – Provides management and leasing services 1 – 34 malls + 4 business/commercial centers = 38 13% – Total GLA: 956,430 m² 956 430 ► Highly efficient with solid growth 56% – Adjusted EBITDA 2Q 2007¹: R$27.5 million (125.4% growth over 2Q06) – N tR Net Revenues 2Q 2007 R$ 41 2 million (117 5% growth over 2Q06) 2007: 41.2 illi (117.5% th Ownership in regional malls Ownership and Management and leasing of regional malls 11% – Unaudited Proforma Adjusted EBITDA 1H07: R$ 94 million % of BR Malls’ total GLA 1 Regional Mall under construction 1Calculated excluding the effects of non recurring expenses related to the IPO, to new acquisitions and to corporate restructuring. Adjusted EBITDA also includes the proceeds from the debentures of Shopping Araguaia 3
  4. 4. Highlights-2Q07 Carlos Medeiros - CEO
  5. 5. Highlights g g Consolidated net revenue reached R$ 41.2 million in 2Q07 and R$ 72.2 million in 1H07 117.5% increase when compared to 2Q06 and 94.0% growth when compared to 1H06 Adjusted EBITDA1 was equal to R$ 27.5 million in the 2Q07 and R$ 49.9 million in the 1H07 125.4% increase when compared to 2Q06 and 107.0% growth when compared to 1H06 C l i f Conclusion of our fi t public d b t first bli debenture i issuance on J l 23rd 2007 July Issuing R$ 320 million in two series reducing significantly our cost of debt During the 2Q07 BRMalls concluded 12 transactions (15 since March 31st), adding 9 news malls (16 since March 31st) to its ownership portfolio Largest M&A transaction this year in the shopping mall industry with the acquisition of a portfolio of four malls located in the state of Rio de Janeiro Our consistent focus on the improvement of our internal processes, systems and controls have already started demonstrating positive effects on our margins NOI margin grew from 77.8% in the 2Q2006 to 86.2% in the 2Q2007 Since the IPO in April, our stock ( p (BRML3) appreciated 72% compared to an increase of 17% of ) pp p Ibovespa 1 Calculated excluding the effects of non recurring expenses related to the IPO, to new acquisitions and to corporate restructuring. Adjusted EBITDA also includes the proceeds from the debentures of Shopping Araguaia 5
  6. 6. Acquisitions Carlos Medeiros - CEO
  7. 7. Acquisitions 2Q07 Highlights of 2Q07 787,858 759,860 Addition of 9 new malls to our portfolio 623,545 641,688 548,135 Additional total GLA: 244,777 m² Additional owned GLA: 76,032 m² Marginal additional NOI 2006: R$32.4mm 145,422 146,101 13,892 76,032 64,572 Average IRR: 14.9%, nominal, unleveraged 206,983 206,983 206,983 206,983 206,983 Highlights subsequent to 2Q07 Apr-07 May-07 Jun-07 Jul-07 Aug-07 Addition of 7 new malls to our portfolio Additional total GLA:146,170 m² Additional owned GLA:70,069 m² Marginal additional NOI 2006: R$51.3mm l dd l $ Average IRR: 14.8%, nominal, unleveraged + = Owned GLA + + = Total GLA 12
  8. 8. Case Study - Shopping Estação The acquisition of Shopping Estacao in the beginning of 2007 is a great turnaround case story Better results for the 1H2007 than those projected by BRMALLS in its acquisition model BRMalls was quick in implementing operational efficiencies, gains of scale and management intelligence in the mall Actual NOI of Shopping Estação in the 1H2007 over performed the projected NOI by 73% Actual NOI margin increased from 66.2% in 2006 to 81.0% in the 1H07 1H07- NOI O 72.5% 7,840 38.7% 38 7% 4,544 3,276 2006 2007 Projected 2007 Actual 7
  9. 9. Case Study –In Mont Consolidation of our position as the largest integrated Shopping Mall company in Rio de Janeiro The mall has currently redefined its Largest mall in the neighborhood strategy and became the largest First mall in the neighborhood gastronomic center of Rio responsible for bringing well-known Rio Plaza presented low NOI margins retail stores in 2006 (35.0%) when compared to our Improvement of its occupancy rate in average of 86% Improvement the past year h opportunity Currently being aggressively anchored to improve its tenant mix Most profitable mall M t Most t diti traditionall high hi h income i Planned expansion of 4.5 thousand m2 shopping mall in Rio de Janeiro expected to be inaugurated in 2009 Suffered from competition of other increasing its current GLA by 13% premium malls Commercial tower with 3,840 m2 of private area and an estimated $23 million of VGV Further improvement of current NOI margin IRR (unleveraged, nominal):14.8% 50% increase in Proforma NOI 8
  10. 10. New Developments and Expansions Carlos Medeiros - CEO
  11. 11. New Developments BRMalls launched its first development after conducting an in depth market research and currently has a very good pipeline for new developments… Mooca Location: São Paulo, Neighborhood of Mooca Size of the mall: 38 000 m² of GLA (places the mall 38,000 the position of one of the largest in the region) Land bank: 70,000 m² (ability to double its size with future expansions) BRMalls ownership interest: 60% Expected Investment: 129 million Life Style Concept: open air spaces with areas destined to restaurants and entertainment spaces, Unleveraged Nominal IRR: can reach 24% p.y. Little Competition: The primary, secondary and third zones of influence of the Mooca region have only 3 medium scale shopping malls 10
  12. 12. Expansions Our growing portfolio multiplies our expansion opportunities. Expansions have an excellent risk x return profile Expansions expected for 2007: 329 m2; 2008: 26,908 m2; and 2009: 28,331 m2 408,653 Owned GLA: 353,084 379,992 55,569 27,237 353,413 329 August/07 YE2007 YE2008 YE2009 11
  13. 13. 2nd Quarter Financial and Operational Results R lt Leandro Bousquet - CFO
  14. 14. Financial Highlights 2Q07 Gross Revenue (R$ 000) Gross Profit (R$ 000) 147.2% % 115.0% 115 0% 43,824 31,696 20,381 , 12,824 12 824 2Q06 2Q07 2Q06 2Q07 Gross Revenue Breakdown Net Income (R$ 000) Others Services 0,5% 14,3% 201.2% Transfer fee 18,359 0,2% % sales 8 5% 8,5% Parking 11,7% Minimum 78,0% Mall& 6,094 Key money Rents Merhandising 9,5% 63,7% 13,6% 3,6% 2Q2006 2Q2007 14
  15. 15. Financial Highlights 2Q07 EBITDA (R$ 000) 125.4% 499 27,526 2,244 2,446 22,338 66.8% 12,214 12 214 64.4% Unaudited EBITDA Proforma (R$ 000) 2Q06 2Q07 IPO Expenses Restructuring and Debentures - Adjusted 2Q07 Acquisition Expenses Araguaia EBITDA Margin 79.5% 38.2% 12.3% 45.1% 45 1% 49,418 49 418 27,526 17,724 19,909 12,214 Proforma a EBITDA for Adjusted d 7 EBITDA 2007 EBITDA 2006 6 EBITDA 2007 7 s acquisitions g recurring Adjusted EBITDA of existing expense Adjusted portfolio 2007 non w/ 15
  16. 16. Operational Highlights 2Q07 NOI (R$ 000) NOI/m² Same Store Sales/m² 109.8% 5.0% 9.5% 32,370 830.7 58.1 61.0 15,425 758.5 758 5 2Q2006 2Q2007 2Q2006 2Q2007 2Q2006 2Q2007 Rent Revenue (R$ 000) Occupancy Rate 82.7% (0.9%) (0 9%) 27.923 96.4% 15.286 95.5% 2Q2006 2Q2007 2Q2006 2Q2007 16
  17. 17. This document may contain future considerations on BRMALLS’s business prospects. These are mere projections and, therefore, based entirely on BRMALLS’s management expectations regarding the future of the business. Such forward-looking statements are subject to risks and t i ti uncertainties which d hi h depend on f t d including economic, political, fi factors i l di i liti l financial and commercial i l d i l conditions in the markets where we operate. Investors are hereby advised that these forecasts are no guarantee of future performance since they involve risks and uncertainties

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