Post on 29-Nov-2014
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Disclaimer
► The material that follows is a presentation of general background information about Sonae Sierra Brasil S.A. and its subsidiaries
(the “Company”) as of the date of the presentation. It is information in summary form and does not purport to be complete. It is not
intended to be relied upon as advice to potential investors and does not form the basis for an informed investment decision. This
presentation is strictly confidential and may not be disclosed to any other person. No representation or warranty, express or
implied, is made concerning, and no reliance should be placed on, the accuracy, fairness or completeness of the information
presented herein.
► This presentation may contain statements that are forward-looking within the meaning of Section 27A of the U.S. Securities Act of
1933, as amended (the “Securities Act”) and Section 21E of the U.S. Securities Exchange Act of 1934. Such forward-looking
statements are only predictions and are not guarantees of future performance. Investors are cautioned that any such forward-
looking statements are and will be, as the case may be, subject to many risks, uncertainties and factors relating to the operations
and business environments of the Company and its subsidiaries that may cause the actual results of the Company to be materially
different from any future results expressed or implied in such forward-looking statements. No person has any responsibility to
update any such information.
► This presentation does not constitute an offer, or invitation, or solicitation or an offer, to subscribe for or purchase any securities.
Neither this presentation nor anything contained herein shall form the basis of any contract or commitment.
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One of the leading developers, owners and operators of top quality and regionally dominant
shopping centers in Brazil
Sonae Sierra Brasil at a glance
► Fully integrated business model with proven local track record
– Property management
– Development and re-development
– Leasing
► 62.4% of our owned GLA developed by us
► Adjusted EBITDA Growth (09-10): 42.1%
► Adjusted FFO Growth (09-10): 60.2%
► Largest secured growth in the sector: 3 greenfields, 1 expansion recently
concluded and 1 expansion at advanced stage, almost doubling our owned
GLA
► 4 other expansions already defined
► 10 shopping centers owned and managed
► Occupancy rate of 98.0%
Note: (1) As of December, 2010.
(2) 4Q10 figures for the public peers; BRMalls adjusted for Tijuca.
(3) Referred to shopping center‟s GLA only.
Source: Company.
► Leverage on the expertise, tenant relationships and market recognition of
our shareholders: Sonae Sierra SGPS and Developers Diversified Realty
(NYSE: DDR)
► Best-in-class controlling shareholders with significant experience in the
sector and significant capital at risk
Business
Model
Outstanding
Growth Track
Record
Secured
Growth
Operating
Expertise
Strong
Sponsorship
Expansion / Greenfield
Announced GLA growth (2010 – 2013)(1)
(„000 sq. m)(2)(3)
+33.7%89
+64.6%153
+23.8%144
+41.8%155
+92.1%188
Owned GLA Growth (%)
4
Opening of Boavista Shopping
Acquisition of
additional stakes in
Metrópole, Plaza Sul
and Tivoli
Opening of PDP
Shopping
Sound track record
Sonae Sierra Brasil’s historical evolution | Owned GLA (‘000 sq m)
CAGR(01-10): 26.2%
DDR becomes a
shareholder with
50% stake
2001 2002 2003 2004 2005 2006 2007 2008 2009
Acquisition of a 20%
stake in Plaza Sul
Opening of Manauara Shopping
25.1
79.980.8
102.7
108.5
128.4
150.0 148.5
200.0 203.7
2010
Total GLA
(„000 sq m)111.7 219.0 220.9 242.1 273.8 297.8 298.8 296.8 343.5 350.1
1999…
Owned GLA as
% of total GLA
111.7
36.5% 36.6% 42.4% 39.6% 43.1% 50.2% 50.0% 58.2% 58.2%22.5%
Acquisition
Development
Acquisition of
additional stake in
Metrópole
Opening of Campo Limpo
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Strategy focused on dominant malls on underserved
medium and large cities
Sonae Sierra Brasil has an established footprint in the State of São Paulo and its growth strategy
is based on offering high quality, market dominant developments in underserved regions
Core portfolio: 9 properties Development strategy: 1 opened and 3 greenfields
Core Portfolio of Assets
Strong track record in Brazil’s most dynamic region Growth strategy focused on underserved regions
Parque D. Pedro
► Campinas (SP)
► Population: 1,065k
► GLA: 121k sq m
► Occupancy rate: 95.2%
► Over 20 mm visits in 2009
Total GLA: 343k sq m
Owned GLA: 200k sq m
Greenfield
Manauara Shopping
► Manaus (AM)
► Population: 1,739k
► GLA: 47k sq m
► 99.7% leased
# of competitors in area of influence
Parque D. Pedro 2
Boavista 2
Penha 2
Franca 1
Tivoli 1
Metrópole 2
Pátio Brasil 2
Plaza Sul 1
Campo Limpo 2
Total GLA 2013: 513k sq m
Owned GLA 2013: 391k sq m
# of cities with more than 300k
inhabitants in Brazil
+ 81
41.6%
58.4%
São Paulo Other states
Owned GLA concentration
Shopping centers
Recently opened mall
Shopping centers
Manaus
Goiânia
Uberlândia
Londrina
6
Portfolio
Greenfield
Shopping centers
4
5
1
89
32
6
7
11
13
12
10
1. Parque D. Pedro
► Campinas (SP)
► GLA ('000 sqm): 121.0
► Stores : 406
► 95.2% of GLA occupied
2. Boavista Shopping
► São Paulo (SP)
► GLA ('000 sqm): 16.0
► Stores : 148
► 98.6% of GLA occupied
3. Penha Shopping
► São Paulo (SP)
► GLA ('000 sqm): 29.6
► Stores : 198
► 99.5% of GLA occupied
4. Franca Shopping
► Franca (SP)
► GLA ('000 sqm): 18.1
► Stores : 101
► 100.0% of GLA occupied
5. Tivoli Shopping
► Santa Barbara d'Oeste (SP)
► GLA ('000 sqm): 22.1
► Stores : 147
► 100.0% of GLA occupied
6. Metrópole Shopping
► São Bernardo do Campo (SP)
► GLA ('000 sqm): 25.0
► Stores : 152
► 99.3% of GLA occupied
7 Pátio Brasil
► Cidade: Brasília (DF)
► GLA ('000 sqm): 29.0
► Stores : 235
► 98.7% of GLA occupied
8. Plaza Sul Shopping
► São Paulo (SP)
► GLA ('000 sqm): 23.0
► Stores : 217
► 99.9% of GLA occupied
9. Campo Limpo Shopping
► São Paulo (SP)
► GLA ('000 sqm): 19.9
► Stores : 127
► 99.9% of GLA occupied
10. Manauara Shopping
► Manaus (AM)
► GLA ('000 sqm): 46.7
► Stores : 235
► 99.7% of GLA occupied
11 Uberlândia Shopping
► Uberlândia (MG)
► GLA ('000 sqm): 43,6
► Expected Opening:
2H 11
12 Boulevard Londrina
Shopping
► Londrina (PR)
► GLA ('000 sqm): 47.8
► Expected Opening; 2H12
13 Passeio das Águas
Shopping
► Goiânia (GO)
► GLA ('000 sqm): 78.1
► Expected Opening: 2013
► Shopping Centers in operation
Total Stores: 1,966 Ownership: 58.2%
GLA ('000 sqm): 350.1 Occupancy Rate: 98.0%
Owned GLA ('000 sqm): 203.7
* Information as of December 31, 2010
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Investment thesis
Competitive edges
► Attractive industry fundamentals
► Strategy focused on dominant malls in underserved medium and large
cities targeting to the fast growing middle class
► Leverage on the know-how, strengths and long term commitment
of our sponsors
► Sound track record of developments and turnaround cases
► Experienced and committed management team
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26.1 28.8 31.735.9
41.645.5
50.0
58.064.6
71.1
87.0
2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010E
Attractive shopping center industry fundamentals
Despite the strong growth observed in the last years, decreasing vacancy rates and low
penetration vis-à-vis developed markets, indicate significant room for new shopping centers in
Brazil
Shopping centers industry sales
Retail sales in shopping centers
(R$ bn)
Nominal retail sales growth
Source: IBGE.Source: ABRASCE.
Low shopping center market penetration
Source: ABRASCE and IBGE.
Total GLA (m²) / 1,000 inhabitants (2010)
66%
51% 50%
28%
18%
Canada USA Mexico France Brazil
(% 2010)
(1)
Note: (1) 2010 data.
Source: ABRASCE.
4%
9%
11%
19%
8%
5%
14%
10%
12% 13%
2001 2002 2003 2004 2005 2006 2007 2008 2009 2010E
2,180
USA Canada
1,290
SP
91
PR
53
MG
31
GO
34
AM
42
DF
143
Other BR
states
34
Average: 49
Mexico
81
9
Fast growing middle class
Around 30 million people have moved upwards into the middle class, while middle class
disposable income has increased by 67%
Middle class: disposable income(1) (R$/month)
Note: (1) Income available for spending and saving
Source: Cetelem “O Observador 2009”, IBGE and Itau Securities
122
204
2005 2009
+67%
Approximately R$ 10 billion increase in monthly
disposable income
Total credit to individuals outstanding (R$ bn)
Source: Cetelem “O Observador 2010”
Increasing middle class
51% 35%
34%49%
16%15%
2005 2009
Population: 182 mm Population: 190 mm
+4 mm people
+30 mm people
-26 mm people
A+B
C
D+E
Up
pe
r c
las
sM
idd
le c
las
sL
ow
er
cla
ss
Sonae Sierra Brazil is strategically positioned to capture the middle class consumption
growth, as it entails over 80% of its target audience
6.8x
-
200
400
600
Jan-01 May-02 Sep-03 Jan-05 May-06 Sep-07 Jan-09 May-10
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Parque D. Pedro: Greenfield case study
(1) Sonae Sierra SGPS and Developers Diversified Realty hold an additional 25.9% indirect owneship in Parque D. Pedro througgh another vehicle
Project Details
Opening October 2002
Sonae Sierra Brasil’s stake(1) 51.0%
GLA (‘000 sqm) 121.0
Occupancy Rate (%) 95.2%
Parking (#) 8,000
Traffic (# of visitors) 20.1 million
Internal View Aerial perspective
Focus on value creation through organic growth
Food Court
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Focus on value creation through organic growth
(contd.)
Parque D. Pedro 2010 Expansion: Upgrading the tenants mix
Highlights
Opening November 2010
Total GLA (m2) 5,400
Anchor / semi-anchor 2
Satellite stores 32
Selected new stores
12
Controlling interests in most of shopping centers
Sonae Sierra Brasil average stake is 58% in its 10 operating properties. It will reach 70% when
all three greenfield developments are completed
RationalePercentage of the Company’s interest
Shopping Center Stake Management
Parque D. Pedro(1) 51.0%
Penha 73.2%
Metrópole 100.0%
Tivoli 30.0%
Pátio Brasil 10.4%
Boavista 100.0%
Franca 67.4%
Plaza Sul 30.0%
Campo Limpo 20.0%
Manauara 100.0%
Weighted Average 58.2%
Uberlândia 100.0%
Londrina 84.5%
Goiânia 100.0%
Weighted Average 70.3%
Note: (1) Sonae Sierra and DDR hold an additional 25.9% indirect ownership in Parque D. Pedro through another vehicle.
Ability to expand and adapt to market
trends
Control the management
services of 100% of the malls
Strategic control of the malls
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Leveraging on the strengths and relationships of
our sponsors
Sonae Sierra Brasil benefits from best-in-class corporate governance and globally recognized
sector expertise, arising from a solid and engaged shareholders base
Superior
Governance
► NYSE listed, SOx compliant
► Euronext Lisbon listed► Over 21 years of history
► One of the largest developers
and operators of shopping
centers in Europe
► Over 2.0 mm sq m in total
GLA
► Over 45 years of history
► One of the largest
developers and operators of
shopping centers in the
world
► 12.4 mm sq m in total GLA
► NYSE listed, SOx Compliant
► Equity value of US$3.4
billion(1)
Experienced
Professionals
► Executives with global experience
► Board members with in-depth global sector expertise
► Interchange of key professional staff among companies
Sharing of Best
Business
Practices
► 20 years of experience in Europe, 45 years in the US and 12 years in
Brazil
► More than 14.4 mm sq m GLA developed globally
► Roughly 15 mm sq m GLA currently under management
Unique Tenant
Relationship
Top Tenants Globally
Top Tenants Globally
Note: (1) Bloomberg as of January 11th, 2011.
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Secured Growth
Owned GLA growth (000 sq m)
Uberlândia
Londrina
Goiânia
+92%
Metrópole (I)
PDP (II)
Metrópole (II)
Tívoli
40
204
392
3
13
78
44
2010 2011 2012 2013 Total
Expansion Greenfields
10
Campo Limpo
Sonae Sierra Brasil has a solid pipeline of new developments and expansions underway that
will almost double the Company’s GLA within 3 years
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Greenfield Projects
Uberlândia Shopping
Uberlândia
MG
2H2011
Work in progress
43.6 sqm
100%
77%
Boulevard Londrina
Shopping
Londrina
PR
2H2012
Work in progress
47.8 sqm
84,5%
64%
Shopping Passeio das
Águas
Goiânia
GO
2013
Approved licences
78.1 sqm
100%
20%
Opening :
Total GLA (‘000 sq m):
Company’s stake:
% of GLA already
committed*:
Status:
Sonae Sierra Brasil’s strategy is to develop greenfield projects which have the potential to
become the market dominant malls in their regions
City:
State:
* As of December 31, 2010
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Expansions
Future expansions
TivoliMetrópole
(Expansion II)
Parque D. Pedro
(Expansion II)
Campo Limpo
Concluded
expansion
Parque D. Pedro
(Expansion I)
On-going expansions
Metrópole
(Expansion I)
LocationSão Bernardo
(SP)
Sta. Bárbara
D‟Oeste (SP)Campinas (SP)São Paulo (SP)Campinas (SP)
São Bernardo
(SP)
Sonae Sierra
Brasil Stake100% 30%51%20%51% 100%
Additional
Total GLA (‘000 sq m)12.0 7.05.03.05.0 9.0
Expected
Opening2013 201320122011November 2010 2H2011
Construction
Start Date1H20121H2011 1H2012 1H20121H2010 1H2010
% of GLA
already committed*:100% 99% 69% n.a. n.a. n.a.
* As of December 31, 2010
111
1717
Operating Indicators
Occupancy Rate
111
Sales (R$ million)
111
SSS/m²
111
SSR/m²
982 1,119
3,041
3,545
4Q09 4Q10 2009 2010
14.0%
16.6%
1,028 1,122
824 902
4Q09 4Q10 2009 2010
9.1%
9.5%
5561
4549
4Q09 4Q10 2009 2010
9.5%
8.0%
97.3%
96.3%
97.0%97.2%
98.3% 98.5% 98.4%
98.0%
1Q09 2Q09 3Q09 4Q09 1Q10 2Q10 3Q10 4Q10
Financial and operating performance
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Gross Revenue (R$ '000) 4Q10 4Q09 % 2010 2009 %
Rent 45,411 41,484 9.5% 158,246 132,370 19.5%
Service revenue 2,996 4,576 -34.5% 15,530 18,390 -15.6%
Parking revenue 5,773 3,383 70.6% 16,629 6,645 150.2%
Key Money 2,719 2,289 18.8% 10,399 9,232 12.6%
Other revenue 424 1,005 -57.8% 808 2,186 -63.0%
Total 57,323 52,737 8.7% 201,612 168,823 19.4%
111
Gross Revenue (R$ million)
111
Gross Revenue Breakdown
78%
11%
4%6%
1%
2009
79%
8%
8%5%
2010
Rent
Service revenue
Parking revenue
Key Money
Other revenue52.7 57.3
168.8
201.6
4Q09 4Q10 2009 2010
8.7%
19.4%
111
1919
Financial and operating performance (cont.)
Adjusted EBITDA and Margin (R$ million)
111
Net Operating Income - NOI (R$ million)
111
Adjusted FFO and Margin (R$ million)
111
Net Income (R$ million)
34.5 41.2
99.5
141.4
71.2%
79.0%
64.6%
76.4%
4Q09 4Q10 2009 2010
28.036.6
77.8
124.6
57.8%
70.1%
50.5%
67.3%
4Q09 4Q10 2009 2010
43.4 46.1
242.9 212.8
4Q09 4Q10 2009 2010
6.3%
-12.4%
43.851.1
128.3
167.4
4Q09 4Q10 2009 2010
16.7%
30.5%
7.2
430.0
216.1
194.7213.9
73.6 61.6
4Q10 Total Debt
4Q10 Cash & Equivalents
4Q10 Net Debt IPO Net Proceeds
Pro-forma Net Cash
Short Term Long Term Intercompany Loan
2020
Cash Position and Leverage
Pro-forma Net Cash Position (R$ million) 4Q10 Debt Amortization Schedule (R$ million)
7.2 9.7
27.1 27.1 26.4
104.3
73.6
2011 2012 2013 2014 2015 2016 and on
Bank Loan Intercompany
SSB’s leverage strategy is to finance the greenfield projects up to 50% LTC. Financing for
Uberlândia and Londrina has already been contracted and for Passeio das Águas is currently
under negotiation
275.5
Thank You
Questions & answers
Investors Relations
Carlos Alberto Correa
Investors Relations Officer
Murilo Hyai
Investors Relations Manager
Email:
ribrasil@sonaesierra.com
Phone:
+55 (11) 3371-4188