Roadshow Presentation September 2016 - investor...
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0 Roadshow Presentation September 2016 Company Presentation July 2017
Transcript of Roadshow Presentation September 2016 - investor...
0
Roadshow PresentationSeptember 2016
Company PresentationJuly 2017
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Disclaimer
“This presentation contains certain statements related to the comprehensive overview of Vinte Viviendas Integrales, S.A.B. de C.V. " (
Vinte ) " regarding its activities to the present day. The information included in this presentation is a summary of information regarding
Vinte which is not intended to cover all related information about Vinte. The information contained in this presentation has not been
included in order to provide specific advice to investors. This presentation shall not be reproduced or distributed by any individual and
you hereby agree that the information provided through this is kept confidential. The statements contained herein reflect the current
views of Vinte with respect to future events and are subject to certain risks, uncertainties and assumptions. Many factors could cause
future results, performance or achievements of Vinte be different from those expressed or implied by such forward looking statements,
including among others, economic or political changes and global business conditions, changes in exchange rates, the overall level of
the industry, changes in housing demand, prices of raw materials, etc. If one or more of these risks occur, or should the underlying
assumptions prove to be incorrect, actual results may vary materially from those described herein as anticipated, believed, estimated
or expected. Vinte does not pretend, nor assume any obligation to update the statements presented below.
According to the “Ley del Mercado de Valores”, only securities registered in the “Registro Nacional de Valores” and containing prior
authorization from the “Comisión Nacional Bancaria y de Valores” may be a matter of public offering, even if by this date its procedure
is still ongoing. Any public offering to be held in the United Mexican States shall comply with the requirements of the “Ley del Mercado
de Valores”, which should include the submission of a prospectus that contains, among other things, a description regarding Vinte’s
financial, administrative, economic, accounting and legal situation, in addition to relevant information about Vinte that can contribute to
the proper decision-making process of a public investor. This presentation does not substitute the information that needs to be
provided in the previous mentioned corresponding prospectus. This presentation does not constitute an offer nor an invitation or
solicitation of an offer, to subscribe for or purchase any securities.
The contents of this presentation do not constitute any obligation by Vinte.
This presentation is exclusively for informational purposes. Certain financial ratios herein included may differ from those included in
the final prospectus and from the financial information disclosed periodically by Vinte due to rounding of numbers.”
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Builds communities
that increase in
value over time
Institutionalization
• More than 28k homes in 22 developments / communities
• Vinte develops integral communities: homes with controlled access, equipped parks, recreational
areas, schools, medical facilities, water treatment plants and roads
• Avg. historical annual home price appreciation between 5.0% and 9.3%
• Founded and led by a management team with an average of 25 years in the sector
• More than 5 years with independent board members and 3 of them conform Audit and Corporate Practices
Committees
• World Bank (IFC) and IBD (IIC) have been shareholders during 2008-2016 and 2013-actual respectively
Diversification and
flexibility
• Presence in 6 Mexican states (Estado de Mexico, Hidalgo, Queretaro, Puebla, Quintana Roo y
Nuevo Leon), houses between Ps. 350k and more than 3,000k, with healthy mortgage source
diversification (Fovissste, Infonavit and banks)
• Dynamic portfolio with flexibility to adapt to potential government and economic policies, which Vinte
has transformed into opportunities
Replicable
business model
• Growth plan aligned to existing land bank and authorizations, and operating experience in current
developments under operation
• Established methodologies, processes and systems to execute business plan
• 19.8% sales CAGR (approx. 50% of sales come from word of mouth references)
Focus on
profitability
• Higher EBITDA margin than other companies in the sector trading in the BMV (last 5 years avg.)
• ~20% ROE in the last eight years
• 9 consecutive years paying dividends in a cash flow generating vision
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2
3
4
5
Vinte is a company that builds communities through a diversified, replicable and
institutional business model, with a vision of profitability and transcendence
…builds communities
that increase in value over
time…
Vinte…
1
4
Co-Financing
Vinte's Business Model
Affordable
Ps.340k – Ps.550k
Middle Income
Ps.550k – Ps.1,100k
Residential
Ps.1,100k – more thanPs.3,000k
Design, amenities and a community lifestyle in an ample offering of products
Proven business model that seeks to combine different market segments in each location, creating
operational flexibility towards changes in government policies and market environment.
Mexican Banks
Vinte's customer base has access to different sources of financing
...with diversification
and flexibility…
Vinte creates communities
that increase in value over
time…
2
6
1,802551 636 979 1,061 1,311 1,486 2,228 2,451 2,546 2,569
2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 LTMJun'2017
624,163 606,900551,704
374,100332,000
2.1%
39.6%44.6%
69.5%
92.9%
ARA RUBA JAVER CADU
"Average Price"
"% of sales coming from homes under $350,000
Business Model Based on Product Diversification…
48%
52%
29%
71%
Avg. Price vs. Competitors (1)
(Ps., 2016, Price per unit)
Sales Distribution by Segment(Avg. price and %, Ps. ‘000s, LTM Jun.’2017)
Higher average price per home than
competitors mitigating the impact of
potential changes in government
policies
Ps.350k – Ps.500k
Up to Ps.350k
Higher than a Ps.1 mm
Ps.500k – Ps.700k
Ps.700k – Ps.1 mm
Products with high quality design,
desirable location and post sale services
in all types of homes allows strong
segment diversification
Source: Company information
Notes:
1 Only companies with public information available in 2016
7
45%
7%
19% 15% 14% 13%
22%
20%
13% 13%
32% 35%
–
12%
25%
14%
2% 2%
13%
50%
26%
42% 25% 23%
5%
3% 7% 5%
12% 13%
15% 8% 10% 11%
14% 14%
551 979 1,311 1,802 2,546 2,569
2007 2009 2011 2013 2016 LTM Jun'2017
…and Mortgage Sources Flexibility
Mortgage Sources for Vinte's Customers 2007-2017(%, Ps. 000’s)
Fovissste
increases
mortgages
and payment
cycle
Mortgage
supply from
Sofoles
before the
crisis
'Infonavit Total'
promotes financing for
middle income and
residential housing
'Infonavit
Tradicional'
increases loans up
to Ps.1.66mm
(April’17)
Fovissste
'Infonavit
Tradicional'
Banks
(Sofoles
up to 2009)
Without
mortgage
Other
Infonavit
Total(1)
Fovissste increases mortgages and
reduces payment cycle
Banks reduce rates seeking to increase
their participation in mortgages
Fovissste
'Infonavit
Tradicional'
Banks
(Sofoles
up to 2009)
Without
mortgage
Other
Source: Company information
Notas:
1 Infonavit Total: Infonavit, but with majority of funds coming from commercial banks
2 ~5% for the period from 2011 to 2015, 3M as of Mar. 2017 was ~1% as a result of changes in 2017 policies where housing subsidies were reduced by 30%
3 'Desarrollos Certificados' have priority access to subsidies
Historically ~5% to 13%(2) of Vinte's sales come from homes with subsidies,
which are classified in 3 types: Infonavit, Fovissste and 'Desarrollo Certificado'(3)
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63% 93%
37% 7%
2,729 2,311
IQ'16 IQ'17
2,934 2,142
IQ'16 IQ'17
49% 80%
51% 20%
4,613 4,224
IQ'16 IQ'17
70% 98%
30% 2%
896 897
IQ'16 IQ'17
25% 79%
75% 21%
2,654 1,620
IQ'16 IQ'17
Vinte’s Business Model vs. Comparables in Mexico
Houses
(1Q’17, # of houses)
Sales growth
(1Q’17 vs 1Q’16, %)
EBITDA growth
(1Q’17 vs 1Q’16, %)
Net Income growth
(1Q’17 vs 1Q’16, %)
Market capitalization
(Ps. mm)
As of May 17th, 2017
(29.6%) (4.0%) (10.4%) 3.4% 3.1%
(22.7%) (32.4%) (27.3%) 2.1% 0.2%
(21.1%)From losses
to earnings (40.7%) (7.1%) 3.2%
3,464 3,359 N/A 8,025 4,975
With subsidies
Without subsidies
% / Sales from houses titled
Due to an important reduction in housing subsidies granted in Mexico during 1Q’17, the
homebuilding sector was able to grow significantly its unsubsidized sales partially or totally
making up for the decrease in sales with subsidies
Source: Company information and reported information from each public Company
... replicable business
model…
Vinte builds communities
that increase in value
over time with
diversification, flexibility
and a…
3
10
(268)(44%)
Continued Housing Deficit
Effective Demand Build-up 2016 vs. Supply 2016
(for new homes)('000s)
609
(270)
(44%)
341
617
158
29
89
305
(262)(312)
Reduction
in
inventories
(in addition
to the
268k)
Demand Analysis Supply Analysis
Potential Demand with Access to Mortgages(1)
('000s)
94
Enter
deficit for
lack of
access to
mortgages
financing
(informal)
Household
formation
2015
Household
formation
with
access to
mortgages
Secondary
and
others(1)
Families
exiting
deficit that
can
acquire a
home
Acquisition
/out
mortgage
Effective
Demand
2015
Supply
2015
Entering
deficit due
to
insufficient
supply
Source: SHF 2010, SHF 2015 'Demanda de Vivienda 2015' and “Strategy&”
Note:
1 includes housing mobility and secondary uses
Supply 2015 Demand 2015Entering Deficit
Current housing deficit is estimated at 8.9 million
homes
29 29 30 31
88 89 103
153 158174
214
343 341332
300
2015 2016 2020E 2030E
Household Formation Exiting DeficitSecondary Acquisition w/out mortgage
617613
647630
94
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Titled Homes and Land Reserve for homes
All of Vinte's land reserves are recorded at cost in the Balance Sheet and does not include JV's with third parties(1). Part of
Vinte's reserves' market value are estimated at 2.6x(2) book value
Source: Company information
Note:
1 Excludes JV in Ciudad Mayakoba for 3,600 homes
2 Based on appraisals of significant sample sizes of actual land
Titled HomesLand
reserve
2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2T’17
Monterrey 825
Puebla 34 4,388
Cancun 68 173 208 4,864
Tula 73 274 482 470 4,411
Queretaro 4 318 431 547 854 614 5,920
Playa del
Carmen61 206 310 419 400 461 503 713 2,818
Pachuca 37 285 461 513 525 596 631 546 635 675 3,437
State of
Mexico757 875 1,070 865 1,275 1,299 1,520 1,365 1,630 1,985 1,618 1,522 5,084
Total 757 875 1,107 1,150 1,797 2,018 2,359 2,698 3,165 3,881 4,265 4,236 31,747
Land Reserve Management
Analysis Committee for Land Reserve Acquisition
(“CAART”)
Zone
Description
1
Market
Analysis
2
Technical
Analysis
3
Judicial
Analysis
Financial Analysis / BusinessPlan
4
5
Structured acquisition process that takes
approximately 90 days
More than 20 people involved in the
purchase decision
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Undra
wn A
vaila
ble
Cre
dit L
ines
$1,270
300
350
110
275
225
120
247
$2,897
$20 $80
$360
$60 $60
$315
$0 $185
2Q2017
2017 2018 2019 2020 2021 2022 2023 2024 2025 2026 2027
2019
2019
Debt Maturity Schedule
Other Commercial Banks (BanBajio, Invex & Actinver)
2023
2021
2021
2020
Access to Committed Lines of Credit($ mm as of June 30th 2017)
200
315
185
280
190
100
Vinte 14
Vinte 17-1
Vinte 17-2
Financing Strengths:
Long term, 45% at fixed rate and 100% from solid and diversified sources
100% of signed undrawn credit lines are long term
Undrawn available lines/ signed lines = 44%
Avg. debt maturity of 6.2 years
45% of net debt is fixed rate, minimizing impact
on potential rate hikes
100% of debt is denominated in pesos
Source: Company Information
To
tal D
eb
t
• Debt balance as of June 30th, 2017 is Ps.1,270.0mm and Ps. 1,307.9mm
including factoring. Debt balance on Balance Sheet discounting issuance
costs under IFRS is Ps.1,236.9mm
Total Debt $1,270 mm*($ mm as of June 30th, 2017)
Public Debt Issuance
Public Debt Issuance
Public Debt Issuance
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Generating positive Cash-flow (post-IPO proceeds investment)
Prioritizing profitability over volume growth
Focusing on selling homes with a price range from Ps. 500k to 2.0
million
Maintaining moderate leverage levels (<2.0x Total Debt / EBITDA)
Ensuring access to long term financing with an important part with fixed
rate
Net Income expected growth of 15% YoY
Expected ROE levels ranging 18%-19%
Vinte 2017 Focus
2nd Semester Estimates in line with our Guidance for 2017
Income Statement
(Ps. mm.)2017
Budget1S’17 2S’17e
Houses (units) 4,550 1,943 2,607
Avg. Price (MXN ‘000) 670.9 628.5 702.6
Revenues 3,165 1,269 1,896
EBITDA 685 268 417
Net Income 420 158 262
Subsidies represented 13% of the
Company’s revenues in 2S2016
vs. 26% in 1S2016
Vinte will launch 6 new projects in
the mid-to-high income segments
during the 2S2017.
... focused on profitability
Vinte builds communities that
increase in value over time with
diversification, flexibility and a
replicable business model…
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15
1.07x
1.31x1.22x
1.06x 1.04x0.97x
1.03x 1.02x
0.83x0.76x
2008 2009 2010 2011 2012 2013 2014 2015 2016 LTMJun'17
(119)
13
82
(44)
48
(41)
214
270
(264)
(188)
2008 2009 2010 2011 2012 2013 2014 2015 2016 6MMar'17
22.1% 27.3% 24.7% 23.6% 22.1% 20.0%
23.4% 23.3% 21.7% 18.7%
22.4%
27.5% 27.5% 26.2% 23.8% 22.9%
26.0% 28.2%
24.9% 21.4%
2008 2009 2010 2011 2012 2013 2014 2015 2016 LTMJun'17ROE ROIC
2.67x
1.87x
1.58x
1.90x 1.90x 1.88x
1.35x1.18x
1.08x
1.65x
0.96x0.86x
0.69x0.78x 0.71x
0.63x0.50x 0.46x
0.29x0.46x
2008 2009 2010 2011 2012 2013 2014 2015 2016 LTMJun'17
ROE & ROIC ~20% since 2008
Stable Financial Position and Profitability for Shareholders
IFC Investment:
108 mdp
CII Investment:
108 mdp
IPO: 610 mm
primary
proceeds
Includes ADOCSA / “La Vista”
acquisition for 300mdp in IVQ’16 and
154mdp in IQ’17 with IPO proceeds
Notes:
1 Working Capital Turnover = Sales/ (Accts. Receivable + Total Inventories – Acct. Payable and Client Prepayments)
2 Operating Free Cash Flow excludes net financial costs, taxes and dividends
ROE & ROIC(%)
Leverage
(2008 – LTM 2Q16)
Working Capital Turnover
(including long-term real estate inventories)
Free Cash Flow from Operations(Ps. mm)
2.67x
1.87x 1.58x
1.90x 1.90x 1.88x
1.35x 1.21x 0.96x 0.86x
0.69x 0.78x 0.71x 0.63x 0.50x 0.46x
2008 2009 2010 2011 2012 2013 2014 2015
Net Debt / EBITDA
Net Debt / Shareholders' Equity
Working Capital Turnover= Revenues / (Accounts Receivable + Real Estate Inventories –
Accounts Payable & Advances from customers
2016, negative Free Cash Flow due to investments/IPO
IPO
Dividends / Net Income:
7.9%6.0%0.0% 19.0% 50.0%7.4% 6.2% 25.0% 45.0%
2016 Dividend Yield = 3.3%
…and business
institutionalization
Vinte builds communities that increase in
value over time with diversification,
flexibility and a replicable business model
focused on profitability for shareholders…
5
17
110 440
757 875 1,107 1,150
1,797 2,018
2,359 2,698
3,165
3,881 4,265 4,236
$650
$988 $1,107$1,331
$1,560$1,881
$2,307$2,569
$2,752
$116$191 $227 $268 $302 $358 $480 $581 $627
2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016
3 to 6 year credit facilities
3 bond issuances with PCG of
Vision of Transcendence with Recognized Institutions
Notes:
1 Start of coverage from rating agencies in 2011. Ratings are for current issuances (corporate and Vinte14)
2 CAGR based on Sales
8-year credit facility of
Ps.700 mm
8-year credit facility of
Ps.300 mm
Acquired a 10% stake and
extended a 7-year credit
facility
5-year credit facility
Titled Homes
5 founding partners with
complementary experience
Auditor since the beginning
of operations in 2003
Short term financing
through Sofoles
2002 - 2007
2008 - 2010
2013 - 2015
2016-2017
Sales EBITDA
3.2x
4.4x
2011(1) - 2012
10 complementary Board
Members, including 4
independent/ MX A- and A+
/ HR A+ and AA+
Homes
Sales
EBITDA
CII (IDB) acquired a 5% stake
5-year bond issuance in
w/ partial guarantee from:
(June 2014)
First Company acquisition
7 and 5-year facilities for Ps.300
and 350mm
IPO Local + Reg-S
Upgrade and Positive Outlook from HR
Ratings and S&P
Long term unsecured debt with ICBC
5 and 10 year bond issuance with variable
and fixed interest rate totaling Ps.500 mm and
with A+ credit ratings
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Institutional and Complementary Corporate Governance
Independent
Board Member
Ramiro
Villareal
Morales
Societal Practices
Committee
Hector
Treviño
Gutierrez
Independent
Board Member
President
Manuel
Oropeza
Fuentes
Board of Directors operating for 5 consecutive years with independent directors
Audit Committee
Hector
Treviño
Gutierrez
Independent
Board Member
Ramiro
Villareal
Morales
President
Manuel
Oropeza
Fuentes
Independent
Board Member
Management Team
CEO
Sergio LealProduction /
Construction
Antonio Zuñiga
COO
Rene JaimeCFO
Domingo Valdes
Design/
Innovation
Jose Soto
Institutional Relations
Carlos Cadena
Highly experienced and
complementary management
team
Board of Directors
Sergio
Leal
Aguirre
Chairman
(CEO)
Rene
Jaime
Mungarro
Board Member
(COO)
Carlos
Cadena
Ortiz de M.
Board Member
(Institutional
Relations)
Antonio
Zuñiga
Hernández
Board Member
(Director of
Production)
Jose
Soto
Montoya
Board Member
(Director of
Design and
Innovation)
Board Member
(CFO)
Domingo
Valdes
Diaz
Carlos
Salazar
Lomelin
Independent
Board Member
(Femsa CEO)
Hector
Treviño
Gutierrez
Independent Board
Member
(Coca-Cola
Femsa CFO)
Independent
Board Member
(Cemex Chief
Legal Counselor)
Ramiro
Villarreal
Morales
Manuel
Oropeza
Fuentes
Independent
Board Member
Secretary of the
Board (Investor
Relations and
Corporate
Financing
Officer)
Alfredo
Nava
Escarcega
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1. IPO’s book mainly formed with institutional investors, with a long term vision and a good understanding of the
Company’s profile
2. Analyst coverage
Initiated and maintained analysts’ recommendations from Actinver, Citi y UBS
3. Creating a positive momentum
Improved outlook and credit rating from S&P and HR Ratings respectively
Improved credit risk and appetite from banks due to IPO capitalization
4. Share Repurchase Program
Helping the share price represent its actual value
5. Improved communication with actual and potential investors and continued compliance with the National
Banking and Securities Commission (CNBV) and Mexican Securities Market Law (LMV) including financial
reporting, corporate presentations, conference calls and Investor Relations webpage
Hired an Investor Relations Agency
Continued communication with potential institutional investors with a long-term profile
Institution Analyst EmailTarget
PriceRecommendation
Actinver Ramón Ortiz Reyes [email protected] Ps.31.00 Buy
Citigroup Alejandro Lavin [email protected] Ps.31.00 Neutral
UBS Marimar Torreblanca [email protected] Ps.32.00 Buy
Vinte’s integral strategy since listing on the stock exchange
20
Q&A…
