powerpoint presentation - globalri...psv of r$ 39 bn (100%) and r$ 35.3 bn (%cbr) in 1q19. 75% of...

Presentation

HeritageSão Paulo - SP

Cyrela

Overview;

History;

Strategic focus;

Operational figures;

Financial indicators;

Portfolio.

AGENDA

2

Cyrela

Overview;

History;

Strategic focus;

Operational figures;

Financial indicators;

Portfolio.

AGENDA

3

CYRELA AT A GLANCE

Leadership position in the industry More than 50 years of history ~ 2.500 employees (construction + administrative) More than 200,000 clients Receivables – R$ 4.2 billion (As of June 2019)

66% 5%*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 6M19 Rating

* Free-float includes Top Shareholders

12.1%

75.5%

2.4%

São Paulo

Rio de Janeiro

São Paulo - Other

5.2%

South

4.9%

Others

Cyrela

Overview;

History;

Strategic focus;

Operational figures;

Financial indicators;

Portfolio.

AGENDA

5

SOLID TRACK RECORD

Cyrela is foundedas a land brokerin São Paulo; Expansion to Rio de

Janeiro and other states;

Cyrela’s IPO;

Spin-off of Properties Division ( Cyrela Commercial Properties);

1st debenture offering (out of a serie of 6 debentures);

1st receivables back securities (CRI’s) offering (out of a serieof 8 CRI’s);

Launch of facebook sales channel;

8th CRI’s emission.

10th debenture offering;

60’s 80’s and 90’s ´00-’10 ´11-´18

Vertical integration;

Land broker

Developer

Cyrela becomes listed company.

Foundation Integration Expansion Consolidation

6

Dividend payout: approximately 25% of its adjusted net income

Internal committees in line with the best corporate governance and risk mitigation practices

Corporate governance practices, based on principles that privilege transparency

Business management. Follow-up and accountability models are based on strict ethical principles

Board of directors made up of at least 5 members

At least 20% should be independent members

Ensure at least 25% of the total stock is available for trading

Adopt public offer procedures that favor the shareholding dispersion

Minimum standards for quarterly disclosure of information

Stock option programAllow 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

8

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

Sustainable Production

Environmental policy for suppliers

Benchmark in waste management

Recycling Program

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

Overview;

History;

Strategic focus;

Operational figures;

Financial indicators;

Portfolio.

AGENDA

12

Execution Cost control Systems and process improvement Corporate Engineering Bonus – focus on deliveries

Company Longevity Leader’s development Meritocracy Cyrela’s cultura

Financial Discipline Focus on margin “Cost Culture” Leverage Reduction

Back to Cyrela “DNA” Focus on mid to high-end products Living as a brand MCMV through Cury

BACK TO BASICS...PROCESS THAT STARTED IN 2010

Governance Commitees 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

92%

96%

96%

93%

95%

81%

60%

47%

34%

28%

0.0% 100.0%20.0% 40.0% 60.0% 80.0%

2014

2018

6M19

2017

2016

2015

2013

2012

2011

2010

+80.0%+60.0%0% +20.0% +40.0% +100.0%

2016

6M19

2018

2017

2015

2014

2013

2012

2011

2010

75%

83%

68%

70%

81%

83%

70%

69%

79%

77%

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

32,8%34,7%

39,8%

28,7%

24,6%

28,3%

25,1%

31,3%

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%

18

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

SPRJSUL

THE WAY CYRELA PLAYS IN THE REAL ESTATE MARKETUSING AN INTEGRATED BUSINESS PLATFORM

20

Luxury / High End

Middle Income

Economic

Cyrela

Overview;

History;

Strategic focus;

Operational figures;

Financial indicators;

Portfolio.

AGENDA

21

PSV of R$ 39 bn (100%) and R$ 35.3 bn (%CBR) in 1Q19.

75% of landbank acquired through swaps.

(R$ billion)

LANDBANK

São PauloRio de Janeiro Others

14

8

25

Total

11

14

51

South

39 22

CH Swap agreement

22

Cyrela – Landbank (100%)

Direct employees

OPERATIONAL HISTORY

23

2010 20122011

4.8

2017

3.1

2013 2014 2015 2016 2018 6M19

8.07.7

5.66.6

5.8

2.9 2.9 2.6

+5%-11%

13.1

20162010

27.9

20122011 2013 2014 2015

8.4

2017 2018 6M19

26.4 27.6

7.3

26.1

9.0

23.4

9.7

+1%

-25%

20152010 20172011 2012 20162013 2014

5.1

2018

6.0

6M19

7.26.2 6.5

5.7

3.42.8 3.3 3.0

-2% -3%

984820 740 745

201720112010 2013 2014

1,264

20182012

1,512

2015 2016

1,7281,460 1,373

+14%

-11%

Launches - PSV (R$ billion) Launched units (thd.)

Pre Sales - PSV (R$ billion)

CYRELAOPERATING RESULTS

21 projects launched in 2Q19, 09 projects launched in 1Q19 and 65 in 2018.

5.2 thd units sold in 2Q19, 3.3 thd units sold in 1Q19 and 14.5 thd in 2018.

24

6.6

7.9

4.64.5

5.6

20112010

5.7

1.7

6.0

1.6

0.76.3

1.7

3.9

2013 20182017

2.0

2014

2.2

2.9

1.0

4.9

2012 2015

0.5

1.2

2016

2.2

6M19

0.9

2.12.4

7.6

5.8

2.9 3.12.60.5

Partners CBR

2010

5.3

2011

5.11.6

1.2

2.6

4.4

2.2

2012

2.1

2.1

5.1

2013

1.0

20152014

0.80.6

2016

4.70.9

2.4

5.7

2017

1.4

6.5

1.6

3.54.8

2.80.8

6M19

6.2

2018

7.2

3.4 3.33.0

6.0

Launches - R$ Billion Pre-Sales - R$ Billion

SALES

(R$ billion)

25

Rio de Janeiro

57.7%

São Paulo - Other Cities

São Paulo 7.0%

11.2%

14.0%

South

10.1%

North and Other

20172015 20182011

3.3

2010 2012 20162014

3.0

7.2

2013 6M19

6.2 6.5 6.0 5.7

3.42.8

5.1

-2%-3%

2Q18

52.7%

2Q193Q18

45.1%

4Q18 1Q18

37.9% 39.4%

49.6%

Pre Sales - PSV (R$ billion) Sales per Region

Sales Speed - 12M

SALES SPEED The SOS12M of 2Q19 attained 57%.

Pre – Sales(R$ million)

Sales Speed

391 499 695 878487 313

726459

931 666

1.357

2Q192Q18 6M18 6M19

1.061

211

1.9171.674

2.961

+80,7%

+76,9%

57%

5%

51%

3Q18

3%

77%

6%

82%6%49%

2Q18

4Q18

6%14%

51%

8%20%

2Q19

9%

26%

66%

1Q19

57%

81%

79%

In 15 monthsIn 6 monthsIn 3 months In 9 months

In 12 monthsHigh endMiddleMCMV 2 and 3

INVENTORIES

27

Inventories – Market value (R$ MM) Inventories – Delivery date

992962 906

2Q18 3Q18 2Q19

4,536

4Q18 1Q19

% CBR

5,789 5,574 5,6645,019 5,211

1,128

4,769

1,020

4,582 4,057 4,305

• R$ 5,211 billion in inventories (R$ 4,305 billion %CBR) in 2Q19.

28

TOTAL INVENTORY

Inventory under construction Finished inventory

Change in Inventory Inventory Breakdown – 1Q19

(R$ million)

Launches 2Q19

-242

Inventory 1Q19

2,087

Sales of inventories

-486 -1,189

Sales of launches

2Q19

22

Price change

5,211

Inventory 2Q19

5,019

-728

+3.8% South

São Paulo

Rio de Janeiro

São Paulo - Other Cities

12.8%

Others

47.8%

20.7%

11.7%

7.0%

Increase of 3.8% in total inventory, from 5,019 million in 1Q19 to 5,211 million in 2Q19

R$2,216 million of finished units inventories (vs. R$2,493 million in 4Q18).

Finished Units(R$ million)

Breakdown

FINISHED UNITS

Price change

Finished Units 4Q18

-275

Sales of finished

units

58

PSV Delivered

-59 2,216

Finished Units 1Q19

2,493-11.1% São Paulo

São Paulo - Other CitiesRio de Janeiro

South

24.6%

Others

38.5%

16.2%13.8%

6.9%

3,015 units delivered in 2Q19, in 12 projects, all are from the High End, Middle + MCMV segments.

The units delivered in the quarter represent launches PSV of R$832 million.

DELIVERED UNITS

11.6

2016

13.2

2013

2.7

6.5

10.2

5.3

0.6

6.5

2014

9.1

6.6

8.3

2015

4.3

6.8

6.5

4.1

9.0

2017

19.5

2.13.3

8.9

2018

3.9

6M19

25.0

20.8

24.021.3

14.3

High endMiddleMCMV

357

174

46183

2Q19

466 640270

1,587

287

2Q18 6M18

832

521

2,145

1,189

6M19

3,150

755

1,875

229320

1Q19

+133% -61%

-62%

Delivered PSV

(R$ million)

Delivered Units

(thd units)

AGENDA

Cyrela

Overview;

History;

Strategic focus;

Operational figures;

Financial indicators;

Portfolio.

31

(R$ million)

171293 249 296

542

26,8%31,3%

30,1%

27,2%

2Q18 2Q19 6M196M18

30,7%

+71,0% +9,0%+83,0%

Gross Profit and Gross MarginNet RevenueMargin

11448

-80

162

1Q19-7.3%

12.2%

-4.4%

-28

2Q18 2Q19

5.9%

6M18

9.2%

6M19

Net Income and Net Margin

640937 826

1.090

1.763

6M182Q18 2Q19 1Q19 6M19

+46,5% +13,4%

+61,7%

FINANCIAL RESULTS

COVENANTS

<= 0,80TOTAL DEBT+ PROPERTIES PAYABLE - SFH DEBT - DISPOSALS

EQUITY

RECEIVABLES + PROPERTY FOR SALE

NET DEBT - PROPERTIES PAYABLE - UNRECOGNIZED COSTS AND EXPENSE>= 1.5 or <0

0,16

0,05

-0,08

-0,02

0,09

0,07

4,245,45

9,0710,64

8,90

5,22

4,93

RETURN ON EQUITY

Return on Equity (net income LTM / Average Shareholders’ Equity LTM ex - minorities) attained 2.9% 2Q19.

34

3Q182Q18

-0.7%

1Q194Q18 2Q19

-1.6%

-2.7%

0.3%

2.9%

LIQUIDITY AND DEBT Net Debt / Equity attained 8.3%.

Debt(R$ billion)

1.1

1.3

1.5

Gross Debt 2Q18

Gross Debt 1Q19

1.5

0.6 0.5

Gross Debt 2Q19

0.3

1.7

Term

1.5

2.0

Cash and Cash

Equivalents

Net Debt

2.42.1 2.0

0.5

Corp.Corp. Corp.

Short

Financ

Long

201720162014

32.8%

18.8%22.2%

2015

25.1%

14.8%

2018

8.3%

6M19

Net Debt / Equity

Indicators Total Debt

CorporateDebt

Net Debt/ Equity 8.3%

Average Cost Corporate: 108.6% CDIFinancing: TR + 8.1% p.y.

Duration 2.8 y 2.7 y

Short Term 14% 15%

Long Term 86% 85%

FinancFinanc

CASH GENERATION*(R$ million)

Cash generation of R$ 196 million in 2Q19.

*Ex dividend payment, buyback program and stake acquisition.

181

(R$ million)

2Q182Q191Q19 2Q19

181

150

196 196

31% 8%

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

37

Cyrela

Overview;

History;

Strategic focus;

Operational figures;

Financial indicators;;

Portfolio.

AGENDA

38

MANDARIMSÃO PAULO (2006)

The tallest residentialbuilding in latin america (2006);

Ballroom on the 41st floor;

First project with differenttypologies in the same building;

CIRAGANSÃO PAULO (2007)

First project to aggregate a residencial and a commercial

tower in the same project

PARQUE ALFREDO VOLPISÃO PAULO (2007)

Very luxury product, with unit prices over US$ 5 mi

JK 1455SÃO PAULO (2009)

LE PALAISRIO DE JANEIRO (2010)

Architecture inspired by two historical buildings in thecomplex;

The historical buildings were restored and adapted for the leisure areas;

CENTRAL PARK MOOCASÃO PAULO (2010)

First mover in a industrial area of São Paulo (Mooca) Innovative product, creating a park inside the project

All of its 560 units were sold in 10 days

LE PARCSALVADOR / BAHIA (2012)

Largest Cyrela’s project; 18 towers, 1.138 units; PSV of R$ 1 billion (2013 value);In the middle of the project, there is a 10,000 sqmt leisure facility.

RISERVA GOLFRIO DE JANEIRO (2014)

Unique project in Barra da Tijuca; 2016 Olympics golf course; Average sqm. Price: from R$ 25 thd to R$ 30 thd.

CYRELA BY PININFARINASÃO PAULO(2014)

47

Unique project in São Paulo (Vila Olímpia); 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 ri@cyrela.com.br

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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