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4 q13 earnings release presentation
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- 2. 2013 Highlights • 2013net revenues totaled R$923.7 million, an increase of 46% over 2012, when net revenues came in at R$630.8 million. The significant growth resulted from additional rental revenues of properties that were previously under development or lease-up; • 2013 adjusted EBITDA of R$866.1 million, a 76% increase over 2012, and adjusted EBITDA margin of 94%; • 2013 net income reached R$81.2 million; • 2013 adjusted FFO, excluding non-cash expenses, totaled R$310.3 million, a 246% increase over 2012, and adjusted FFO margin of 34%; • The Company delivered 6 new projects throughout the year, representing a total GLA of 205 thousand sqm, and of which 84% or 173 thousand sqm are already leased; • The average net of inflation leasing spread of the portfolio reached 3.0% in 2013, which involved a total area of 347 thousand sqm of GLA; • At the end of the year financial and physical vacancy rates were at 8.6% and 4.1%, respectively. Excluding the JK Towers, currently under lease-up, stabilized financial and physical vacancy would drop to 3.9% and 2.6%, respectively; • In 2013 the Company renegotiated/pre-paid R$1,336.7 million in loans and issued R$850.0 million of non-secured debentures, which resulted in a reduction of 88 bps in its annual average cost of debt; • In line with the Company’s recycling strategy, 5 property sales were completed in 2013, totaling R$492.2 million at an average cap rate of 8.6%. The rental loss resulting from the sale of properties reached R$13.2 million; • In November the Company executed an agreement with WTGoodman for the sale of 100% of its existing industrial/logistics portfolio. According to the agreement, WTGoodman will pay to BR Properties the amount of R$3,180.0 million, subject to certain adjustments established in the agreement. The effectiveness of the acquisition of the real estate assets provided for in the agreement is subject, among other conditions, to the applicable contractual approvals, to the negotiation of the definitive agreements and to the satisfactory conclusion of the due diligence to be carried out by WTGoodman. The Company intends to use the sale proceeds in order to reduce the net leverage, for the share repurchase program and for the payment of dividends to the shareholders. 2
- 3. Portfolio Portfolio Market Value 2013Revenue Breakdown Asset sales in the amount of R$482.1 million 65% 11.715 12.968 13.552 13.840 14.031 14.096 13.759 13.423 Straight-line 3% Leasing 96% 6% Services 1% 29% 1Q12 2Q12 3Q12 4Q12 1Q13 2Q13 3Q13 Portfolio Breakdown (% market value) 4Q13 Portfolio Breakdown (% GLA) 5% 4% 18% 25% 49% 14% 63% 22% Of f ice AAA Of f ice Industrial Retail Of f ice AAA Of f ice Industrial Retail 3
- 4. Financial Highlights Net Revenues(R$ thousand) Net Income (R$ thousand) (93%) 46% 11% (187%) 1.216.400 923.670 630.825 172.064 200.666 222.953 4Q12 4Q12 4Q13 81.163 (149.132) 2012 4Q13 2012 2013 2013 4
- 5. Financial Highlights Adjusted EBITDA(R$ thousand) 95% 72% 78% 94% 76% 46% 866.147 492.679 144.371 4Q12 211.148 4Q13 2012 2013 Adjusted EBITDA Margin EBITDA Composition Net Income (loss) before Minority Interest (+) Deferred Taxes (+) Income and Social Contribution Taxes (-) Minority Interest (+) Depreciation (+) Net Financial Result EBITDA EBITDA Margin 4Q13 (156.472) (52.627) (712) 7.340 104 163.437 (38.930) -17% 4Q12 206.793 27.265 (11.692) (34.729) 69 60.002 247.708 123% var % -176% -293% -94% -121% 50% 172% -116% -141 p.p. 2013 70.312 (23.158) 50.109 10.851 378 614.004 722.496 78% 2012 1.279.349 690.414 22.702 (62.949) 279 364.311 2.294.106 364% var % -95% -103% 121% -117% 35% 69% -69% -285 p.p. Adjusted EBITDA Composition EBITDA (-) Gain (Loss) on Appraisal of Investment Properties (-) Gain (Loss) on Sale of Investment Properties (+) Other Operating Income (+) Stock options (+) Bonus Provision Adjusted EBITDA Adjusted EBITDA Margin 4Q13 (38.930) 28.872 205.366 (220) 387 15.673 211.148 95% 4Q12 247.708 (115.161) (298) (172) 716 11.577 144.371 72% var % -116% -125% -69042% 28% -46% 35% 46% 23 p.p. 2013 722.496 (104.397) 203.664 23.442 1.822 19.120 866.147 94% 2012 2.294.106 (1.824.964) 6.071 (1.070) 3.511 15.024 492.679 78% var % -69% -94% 3255% -2291% -48% 27% 76% 16 p.p. 5
- 6. Financial Highlights Adjusted FFO(R$ thousand) 30% 18% 14% 34% 246% 80% 36.815 4Q12 310.303 89.784 66.111 4Q13 2012 2013 Adjusted FFO Margin Adjusted FFO Composition Net Income (loss) (+) Deferred Taxes (+) Income Taxes on Property Sales (+) PIS/Cofins (Revenue Taxes) on Property Sales (-) Gain (Loss) on Appraisal of Investment Properties (-) Gain (Loss) on Sale of Investment Properties (+) Non-cash Losses on Exchange Rate Variation (-) Non-cash Gains on Exchange Rate Variation (+) Non-cash Variations on Derivative Instruments Adjusted FFO Adjusted FFO Margin 4Q13 (149.132) (52.627) 28.872 205.366 40.549 (7.934) 1.016 66.111 30% 4Q12 172.064 27.265 1.597 (115.161) (298) 23.946 (20.429) (52.169) 36.815 18% var % -187% -293% -100% n/a -125% -69042% 69% -61% -102% 80% 11 p.p. 2013 81.163 (23.158) 16.453 17.125 (104.397) 203.664 159.322 (72.537) 32.668 310.303 34% 2012 1.216.400 690.414 4.649 1.239 (1.824.964) 6.071 122.769 (74.624) (52.169) 89.784 14% var % -93% -103% 254% 1283% -94% 3255% 30% -3% -163% 246% 19 p.p. 6
- 7. Indebtedness 2013 Net Debt(R$ mn) 2013 Debt Profile 1% 4.639 5.557 951 6% 4.607 TR 10% 39% IGPM INPC 909 10 IPCA 44% ST Debt CDI Obligations f or Acquisitions LT Debt Total Debt Cash Net Debt Indebtedness Short Term Loans and Financing Loans and Financing Perpetual Bond Derivative Instruments Payables for Acquisition of Real Estate Long Term Loans and Financing Loans and Financing Perpetual Bond Gross Debt Cash and Cash Equivalents Net Debt 4Q13 3Q13 var % 918.756 419.014 119% 840.294 343.937 144% 68.672 65.371 5% - - n/a 9.791 9.706 1% 4.638.664 4.950.385 -6% 4.023.690 4.364.953 -8% 614.974 585.432 5% 5.557.420 5.369.399 4% 950.864 839.730 13% 4.606.556 4.529.669 2% 13.423.101 13.759.034 -2% Gross Debt / Portfolio Value (Loan to Value) 41% 39% 2 p.p. Net Debt / Portfolio Value (Loan to Value) 34% 33% 1 p.p. Adjusted EBITDA / Net Financial Expenses * 1,6x 1,7x -5% Duration (years) 4,2 4,4 -5% 37% 30% 6 p.p. Portfolio Value Unsecured Debt / Total Debt * Considering Net Financial Expenses (ex. non-cash variations) 7
- 8. Indebtedness Debt Amortization Schedule(R$ million) Net Debt / Adjusted EBITDA 9,7x 7,8x 1.280 7,0x 7,3x 6,7x 6,0x 5,6x 5,7x 5,5x 4,9x 5,2x 5,5x 770 3,7x 3,2x 3,4x 495 316 250 325 187 94 2014 2015 2016 2017 2018 2019 2020 76 71 73 66 2021 2022 2023 2024 2025 0,6x 1Q10 2Q10 3Q10 4Q10 1Q11 2Q11 3Q11 4Q11 1Q12 2Q12 3Q12 4Q12 1Q13 2Q13 3Q13 4Q13 Principal Net Debt/EBITDA Loan to Value: Gross and Net Interest Coverage Ratio 3,5x 3,0x 2,7x 2,5x 2,5x 2,4x 40% 38% 40% 2,1x 45% 43% 42% 41% 40% 2,0x 1,6x 1,5x 1,5x 1,4x 1,7x 1,7x 1,6x 24% 36% 1,1x 4% 1Q10 2Q10 3Q10 4Q10 1Q11 2Q11 3Q11 4Q11 1Q12 2Q12 3Q12 4Q12 1Q13 2Q13 3Q13 4Q13 EBITDA / Net Financial Expenses 39% 23% 21% 36% 35% 35% 37% 38% 39% 40% 39% 34% 34% 34% 36% 33% 41% 34% 30% 21% 21% 1Q10 2Q10 3Q10 4Q10 1Q11 2Q11 3Q11 4Q11 1Q12 2Q12 3Q12 4Q12 1Q13 2Q13 3Q13 4Q13 LTV Gross Debt LTV Net Debt 8
- 9. Interest Rates Variation ofBRPR Average Cost of Debt vs Variation of CDI Rate (bps) 106 99 71 11 60 (46) (62) 3Q12 - 0 Base 4Q12 (10) 1Q13 10 (23) 2Q13 3Q13 Variation of BRPR Average Cost of Debt (bps) BRPR Cost of Debt vs Interest Rates BRPR Average Cost of Debt Variation QoQ (bps) CDI Rate Variation QoQ (bps) 3Q12 11,53% 7,36% - 4Q12 10,91% (62) 6,90% (46) 4Q13 Variation of CDI Rate (bps) 1Q13 10,81% (10) 7,01% 11 2Q13 10,57% (23) 7,72% 71 3Q13 10,67% 10 8,71% 99 4Q13 11,28% 60 9,77% 106 Impact of Interest Rates Hike in FFO Total Debt - 4Q13 5.589.406 Nominal Average Cost of Debt - 4Q13 11,28% Annual Pro-Forma Interest Expenses 630.359 Table below assumes a 100 bps increase in the CDI Rate Total Debt - 4Q13 5.589.406 Nominal Average Cost of Debt - 4Q13 (Post Increase) 11,72% Annual Pro-Forma Interest Expenses 655.261 Annual Post Tax Impact in FFO * (16.435) * Tax Rate of 34% Sensitivity Analysis CDI Rate BRPR Average Cost of Debt Variation on BRPR Debt (bps) Reduction -300 bps -200 bps -100 bps 9,94% 10,39% 10,83% -134 bps -89 bps -45 bps 4Q13 9,77% 11,28% 0 bps 100 bps 11,72% 45 bps Increase 200 bps 300 bps 12,17% 12,61% 89 bps 134 bps 9
- 10. Operating Highlights Leasing Spreads LeasingSpread Leasing Spread - Portfolio Renegotiated GLA (sqm) % Portfolio 4Q13 1,3% 159.046 8% 4Q12 31,9% 101.325 5% Lease Contracts All Contracts 2012 26,8% 241.382 13% Duration 5.8 Years Build-to-Suit Contracts 2013 3,0% 346.942 18% 7.1 Years Lease Contract Expiration Schedule (% Revenues) Lease Contract 3 Year Market Alignment Schedule (% Revenues) 17% 79% 1% 2013 7% 2014 2% 12% 2015 31% >2016 2013 15% 2014 2015 >2016 10
- 11. Operating Highlights Vacancy Evolution FinancialVacancy per Segment 10,0% Physical 10,8% Financial 10,5% 8,4% 8,9% Of f ice 8,6% Industrial Retail 5,5% 4,0% 5,3% 4,7% 4,1% 2,6% 0,5% 4Q12 1Q13 2Q13 3Q13 4Q13 3Q13 0,0% 0,2% 0,0% 4Q13 Vacancy per Property 4Q13 Property Type Financial Physical Ed. Jacarandá Office 0,1% 0,1% Ventura - West Tower Office 0,3% 0,1% Icomap Office 0,03% 0,05% RB115 Office 0,1% 0,1% Manchete Office 1,0% 0,4% JK Complex - Towers D&E Office 4,6% 1,4% Cidade Jardim Office 0,6% 0,2% Paulista Office 1,0% 0,3% TNU Office 0,14% 0,10% Panamérica Park Office 0,1% 0,1% Raja Hills Office 0,1% 0,1% Brasília Office 0,3% 0,2% Total Office 8,4% BP Jandira Industrial 3,2% 0,1% 0,2% BP Jundiaí Industrial 0,1% 0,4% BBP Barão de Mauá-Brahms Industrial 0,04% 0,1% Cond.Ind.SJC Industrial 0,0% 0,1% Total Industrial 0,2% 0,8% Total Portfolio 8,6% 4,1% 11
- 12. Portfolio Recycling In linewith the Company’s recycling strategy, 5 property sales were completed in 2013, totaling R$492.2 million at an average cap rate of 8.6%. The rental loss resulting from the sale of properties reached R$13.2 million Sold Properties Paulista Park (2 Units) Cetenco Plaza (2 Units) Plaza Centenário Pateo Bandeirantes Galpão Sorocaba TOTAL Type Sale Date Office Office Office Office Warehouse Apr-13 May-13 Aug-13 Sep-13 Sep-13 Total Sales Volume (R$ thousand) Sale Price (R$ K) 4.000 6.100 13.700 442.000 26.400 R$ 492.200 Exit Cap Rate 8,6% 7,9% 9,6% 8,4% 10,2% 8,6% Rental Loss 2013 (R$ K) 258 283 471 11.485 740 R$ 13.237 Average Exit Cap Rate (%) 492.200 8,6% 8,4% 137.008 2012 2013 2012 2013 12
- 13. Capital Markets Stock Performance– 2013 ADTV BR Properties Ibovespa 15% 80.000.000 70.000.000 5% 60.000.000 50.000.000 -5% 40.000.000 -15% 30.000.000 20.000.000 -25% 10.000.000 -35% Jan-13 Feb-13 Mar-13 Apr-13 Stock Performance (BRPR3) Total Number of Shares Free Float (%) May-13 Jun-13 Jul-13 4Q13 Jul-13 4Q12 312.653.445 Aug-13 var % 311.612.894 0% Oct-13 2013 Dec-13 Nov-13 2012 312.653.445 var % 311.612.894 0% 99% 99% 99% 99% Stock Price (average for the period) 18,63 25,79 -28% 20,80 23,27 -11% Stock Price (end of period) 18,60 25,50 -27% 18,60 25,50 -27% Market Cap end of period (R$ million) 5.815 7.946 -27% 5.815 7.946 -27% 56,09 3.020.156 7.350 32,38 1.254.317 4.621 73% 141% 59% 46,67 2.329.181 6.694 29,04 1.241.830 3.834 61% 88% 75% Average Daily Trading Volume (R$ million) Average Daily Traded Shares Average Daily negotiations 0% Sep-13 0% 13
- 14. IR Contacts Investor Relations PedroDaltro CFO & Investor Relations Officer Marcos Haertel Investor Relations Manager Gabriel Barcelos Investor Relations Analyst Phone: (55 11) 3201-1000 Email: ri@brpr.com.br www.brpr.com.br/ri 14