Belo Horizonte • Brasília • Curitiba • Jundiaí • Maceió • Porto Alegre • Ribeirão Preto • Rio de Janeiro • São Caetano • São Paulo
Third Quarter 2008 Earnings Release and Supplementary Financial Information
Conference Call English November 13, 2008 12:15 pm (Brasília) 9:15 am (US EST) Tel.: +1 (412) 858-4600 Code: Multiplan Replay: +1 (412) 317-0088 Code: 424273#1 Portuguese November 13, 2008 11:00 am (Brasília) 8:00 am (US EST) Tel.: +55 (11) 2188-0188 Replay: +55 (11) 2188-0188 Code: Multiplan
3Q08 Belo Horizonte • Brasília • Curitiba • Jundiaí • Maceió • Porto Alegre • Ribeirão Preto • Rio de Janeiro • São Caetano • São Paulo
Multiplan announces NOI growth of 43.2% to R$67.9 million in 3Q08 Rio de Janeiro, November 12, 2008 – Multiplan Empreendimentos Imobiliários S.A. (Bovespa: MULT3), the largest shopping center company in Brazil by revenue and the most profitable company in the sector, announces its results for the third quarter of 2008. The following financial and operating data, except where otherwise stated, is based on consolidated data in Brazilian Reais (R$) according to generally accepted accounting principles in Brazil.
FINANCIAL AND OPERATING HIGHLIGHTS null
NOI
null
▲43.2%
Change 3Q08/3Q07 Net Revenue Adjusted FFO
▲18.8%
▲18.3%
Adjusted EBITDA
▲17.2%
null
Net Revenue grew from R$85.1 million in 3Q07 to R$101.1 million in 3Q08, increasing 18.8%. The revenue null was boosted by the growth of rent, parking, service and merchandising revenues. Rent revenue grew 22.4% to R$68.0 million in 3Q08, while same store rent also increased 11.6% over the null same period. null Net Operating Income grew by 43.2%, achieving R$67.9 million in 3Q08, when compared to R$47.4 million in 3Q07. null The increase of the NOI margin from 77.7% (3Q07) to 85.8% (3Q08) was a result of an improvement on both sides of the ratio, as the company increased revenues and reduced costs. Adjusted EBITDA and FFO grew FINANCEIROS 17.2% and 18.3% respectively in this quarter when compared to the same DESTAQUES quarter in 2007, as consequence of the higher NOI. Cristal Tower has now sold 58% of its units, since its launch on August 18th, 2008. With the announcement of ParkShoppingBarigüi expansion II and JundiaíShopping in 3Q08, Multiplan is now responsible for the largest greenfield project development pipeline in the market, totaling five shopping centers, which will add 128,012 m² to the company‟s own Gross Leasable Area (GLA). The company invested even more in its premium malls and in the quality of its tenant mix. In 3Q08, R$10.7 million were used to promote refurbishments, keeping the shopping center an attractive and modern place for its customers. New operations opening in the next quarter include: BarraShopping Sul, ParkShopping Fashion Expansion, ParkShoppingBarigüi Gourmet Expansion and RibeirãoShopping Expansion phases I and II. Operating Highlights (R$'000) Gross Revenue Net Revenue Adjusted FFO Adjusted Income Adjusted EBITDA NOI NOI Margin Total Sales Total Sales/m² Same Stores Sales/m² Same Stores Rent/m² GLA Own SC's Multiplan GLA
3Q08 111,461 101,099 54,833 47,101 57,375 67,911 85.8% 1,203,680 2,990 3,066 244 416,928 266,759
3Q07 93,081 85,095 46,350 40,357 48,937 47,417 77.7% 1,029,860 2,725 2,790 219 392,279 252,152
Chg. % ▲19.7% ▲18.8% ▲18.3% ▲16.7% ▲17.2% ▲43.2% ▲806 b.p ▲16.9% ▲9.7% ▲9.9% ▲11.6% ▲6.3% ▲5.8%
9M08 314,784 286,097 174,786 151,222 171,413 184,077 82.6% 3,419,102 8,494 9,060 710 416,928 266,759
9M07 256,428 234,223 131,552 115,103 144,949 141,257 81.1% 2,943,431 7,789 8,136 650 392,279 252,152
Chg. % ▲22.8% ▲22.1% ▲32.9% ▲31.4% ▲18.3% ▲30.3% ▲145 b.p ▲16.2% ▲9.0% ▲11.4% ▲9.3% ▲6.3% ▲5.8%
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3Q08 Belo Horizonte • Brasília • Curitiba • Jundiaí • Maceió • Porto Alegre • Ribeirão Preto • Rio de Janeiro • São Caetano • São Paulo
LETTER FROM THE CEO Dear shareholders, It is my pleasure to present Multiplan‟s results for the third quarter of 2008. As we all expected, our company continued to expand, and the improvement in our ventures‟ performance, as well as the success of our projects, can be seen in our figures. In 3Q08, the net operating income (NOI) grew 43.2% to R$67.9 million and the adjusted income increased 16.7% when compared to 3Q07. In September we announced the construction of JundiaíShopping, Multiplan‟s new shopping center, located in Jundiaí, São Paulo. With 34,575 m² of GLA, the mall is expected to have a third year NOI of R$26.6 million and will integrate a mixed-use project where two office towers are planned to be constructed. Currently, the company is responsible for the development of five greenfield projects and strong efforts are continuously being made in order to expand our developments pipeline. DESTAQUES We have also announced the construction of a new expansion, at ParkShoppingBarigüi, in Curitiba, state FINANCEIROS of Paraná, adding 8,639m² of GLA to the shopping center through 85 new stores. On total, the company has seven expansions under development, which will add 51,598m² of GLA to our portfolio. Developing new projects continues to be our priority and Multiplan‟s main expertise. Producing feasibility studies, developing projects, and managing shopping centers is what we do best, and what generates the most substantial returns to our shareholders. I would like to retransmit our team‟s pride and excitement with the official opening of BarraShopping Sul, on November 17th. After years of studying, planning and developing, the mall is finally about to contribute with peoples‟ lives, by creating jobs and offering an option of shopping and leisure through a massive entertainment center. With 68,378 m2 of GLA, the shopping center is born as the largest mall in the southern region of Brazil and the second largest in Multiplan‟s portfolio. Joining BarraShopping Sul mixed-use complex is Cristal Tower, our new office tower, which was launched last August, and has successfully entered the sales phase. In no more than three months, Cristal Tower has already 58% of its units sold. In order to maintain our malls as prominent regional assets for shopping and leisure, it is necessary to adapt them to the consumers‟ needs and emerging design trends. This is what prompted Multiplan to invest R$10.7 million in refurbishments in 3Q08, totaling R$41.7 million in the first nine months of 2008. For instance, in our three largest malls, BarraShopping, BH Shopping and MorumbiShopping, a lot has now been redesigned. Floors, roofs, stairs, windows, lighting and many other landscape aspects have been improved in order to attend the new market trends, resulting in a comfortable atmosphere and a better shopping experience for all customers. Multiplan has 83% of rental income attributed to the minimum rent revenues and the occupancy rate of the operating malls is currently 97.2%. Delinquency (more than 25 days of payment delay) was only 3.7% on 3Q08, and the malls‟ sales growth on the first nine months of 2008 was 16.2%, totaling R$3.4 billion. The figures show that despite the crisis, our quality shopping centers continue to grow on sales, as they are inherent to peoples‟ routine. It is also important to mention, during the current economic scenario, that our company‟s net debt is R$55.9 million, which corresponds to 2.7% of Multiplan‟s equity and 3.4% of the company‟s market value. Finally, I would like to express our company‟s confidence during this quite unstable economic scenario. One of the reasons is due to Multiplan‟s lease contracts, which are indexed to IGP-DI inflation rate, providing inflationary protection for our revenues. Furthermore, the leasing success and the high demand for over one thousand stores, which will be added to our company‟s portfolio until 2009, clearly demonstrate that our path is to continue growing. On October, when the market conditions were already vulnerable, our malls had sales approximately 16% superior to October 2007, reaffirming the quality of our portfolio. Besides, our shopping centers are consolidated ventures that guarantee the flow of cash during a long period of time, therefore perpetuating our results. Through more than 30 years, Multiplan has experienced some volatile times and always managed to overcome difficulties by improving its own ventures and investing in bold projects. Our strategy, as well as our beliefs, has remained unchanged throughout the years: to be the best in the shopping center industry, and demonstrating the strongest possible results for our shareholders. My best regards, José Isaac Peres
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3Q08 Belo Horizonte • Brasília • Curitiba • Jundiaí • Maceió • Porto Alegre • Ribeirão Preto • Rio de Janeiro • São Caetano • São Paulo
FINANCIAL HIGHLIGHTS Overview null
Multiplan is the largest shopping center company in Brazil, developing, owning and managing one of the largest null and highest-quality mall portfolios, with over 30 years of experience in the sector. The company also has strategic operations in the residential and commercial real estate development sectors, generating synergies for mallnull related operations and adjacent owned land. On September 30th, 2008, Multiplan owned and managed 11 shopping centers, totaling a GLA of 416,928 m², 2,732 stores and an estimated annual traffic of 149 million null consumers, ranking the company among the largest shopping centers operators in Brazil, according to the null Brazilian Shopping Centers Association (ABRASCE). Seeking to control and exercise its management excellence, Multiplan owns controlling positions in 12 of the 16 shopping centers in its portfolio (including the two malls under null construction and three malls under development) and currently manages all operating shopping centers in which null it has an ownership interest.
DESTAQUES FINANCEIROS
Consolidated Financial Statements (R$’000) Rent Service Revenue Key Money Parking Revenue Real Estate Sales Gross Revenue Revenue Tax Net Revenue Operational Costs G&A Non-recurring expenses (IPO) Shopping Center Parking Cost of Real Estate Sold Equity pickup Amortization Financial Revenue Financial Expenses Depreciation Other Operating Revenue/Expenses Operational Income Non-Operating Income Income Before Taxes Tax Income and Social Contribution Deferred Taxes Participation of the minority stockholders Net Income Adjusted EBITDA NOI Adjusted FFO Adjusted Income
3Q08
3Q07
Chg. %
9M08
67,994 18,604 3,606 18,989 2,268 111,461 (10,362) 101,099
55,572 12,942 4,385 11,637 8,545 93,081 (7,986) 85,095
▲22.4% ▲43.8% ▼17.8% ▲63.2% ▼73.5% ▲19.7% ▲29.8% ▲18.8%
197,329 51,608 17,087 46,492 2,268 314,784 (28,687) 286,097
9M07
Chg. %
(22,287) (11,244) (7,828) (883) (1,640) (31,337) 6,884 (5,139) (7,732) 222 20,115 (64) 20,051 (4,086) (6,359) (201) 9,405
(13,069) (35,683) (13,583) (6,209) (5,012) 1,660 (30,022) 8,835 (5,771) (5,993) 53 (19,698) 0 (19,698) 843 (6,412) (81) (25,348)
▲70.5% ▼100.0% ▼17.2% ▲26.1% ▼82.4% N/A ▲4.4% ▼22.3% ▼11.3% ▲29.0% ▲316.1% N/A ▲100.0% N/A N/A ▼0.8% ▲149.2% N/A
(61,260) (38,816) (20,928) (884) 6,477 (94,242) 31,987 (22,517) (23,564) 787 63,137 (60) 63,077 (5,579) (17,844) (518) 39,136
(37,400) (37,044) (32,834) (13,687) (10,981) 3,833 (86,376) 11,899 (17,655) (16,449) 811 (1,659) 983 (676) (838) (6,726) (77) (8,317)
▲63.8% ▼100.0% ▲18.2% ▲52.9% ▼92.0% ▲69.0% ▲9.1% ▲168.8% ▲27.5% ▲43.3% ▼3.1% N/A N/A N/A ▲565.4% ▲165.3% ▲572.7% N/A
57,375 67,911 54,833 47,101
48,937 47,417 46,350 40,357
▲17.2% ▲43.2% ▲18.3% ▲16.7%
171,413 184,077 174,786 151,222
144,949 141,257 131,552 115,103
▲18.3% ▲30.3% ▲32.9% ▲31.4%
162,393 ▲21.5% 35,931 ▲43.6% 13,811 ▲23.7% 25,385 ▲83.2% 18,908 ▼88.0% 256,428 ▲22.8% (22,205) ▲29.2% 234,223 ▲22.1%
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3Q08 Belo Horizonte • Brasília • Curitiba • Jundiaí • Maceió • Porto Alegre • Ribeirão Preto • Rio de Janeiro • São Caetano • São Paulo
REVENUES Gross Revenue null
Multiplan's gross revenue grew by 19.7%, from R$93.1 million in 3Q07, to R$111.5 million in 3Q08. Third quarter nullmainly improved by rent, parking and service revenues. These last two were responsible for 33.7% results were of Multiplan‟s revenues. null
null Gross Revenue Growth and Breakdown – 3Q07 and 3Q08 (R$‘000) null null
111.461
+5.663 -6.277
-779
+12.422
null 93.081
DESTA QUES FINANCEIR OS Gross Revenue Growth – 3Q07 vs. 3Q08 (R$‟000)
Gross Revenue 3Q07
Rent
Real Estate Sales 2.0%
+7.352
Services
Key Money
Parking
Minimum 83.1%
Parking Revenue 17.0%
Rent 61.0%
Key Money 3.2% Service Revenue 16.7%
Merchandising 12.9%
Real Estate Gross Revenue Sales 3Q08
Overage 4.0%
Gross Revenue Breakdown – 3Q08
1. Rent
Organic growth continues
Rental revenues increased 22.4% in 3Q08 to R$68.0 million, from R$55.6 million registered in 3Q07. The Belo Horizonte region continues to show improvement in rental income: DiamondMall and Shopping Pátio Savassi, both located in the city, had rental revenues increase of 20% and 92%, respectively. Rent Revenue/Shopping (R$'000) BH Shopping RibeirãoShopping BarraShopping MorumbiShopping ParkShopping DiamondMall New York City Center Shopping AnáliaFranco ParkShoppingBarigüi Pátio Savassi* Shopping Santa Úrsula** BarraShopping Sul (BIG) Portfolio Total
3Q08 9,242 5,562 13,137 15,463 5,148 5,794 1,264 3,074 5,566 3,192 545 7 67,994
3Q07 8,508 3,520 11,840 11,457 4,433 4,832 1,266 2,830 5,214 1,665 7 55,572
Chg. % ▲8.6% ▲58.0% ▲11.0% ▲35.0% ▲16.1% ▲19.9% ▼0.2% ▲8.6% ▲6.8% ▲91.7% N/A ▲0.0% ▲22.4%
9M08 27,090 15,119 38,808 45,919 14,528 16,653 3,910 9,256 16,159 9,091 775 21 197,329
9M07 25,533 10,320 35,535 34,612 13,146 14,179 3,639 8,242 15,501 1,665 21 162,393
Chg. % ▲6.1% ▲46.5% ▲9.2% ▲32.7% ▲10.5% ▲17.4% ▲7.4% ▲12.3% ▲4.2% ▲446.1% N/A ▲0.0% ▲21.5%
*Only two months were taken into account in 3Q07 **Only acquired on May 2008
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3Q08 Belo Horizonte • Brasília • Curitiba • Jundiaí • Maceió • Porto Alegre • Ribeirão Preto • Rio de Janeiro • São Caetano • São Paulo
Brazil retail sales continue growth
The latest retail sales figures released (9.8% higher, comparing August 2008 to the same month in 2007, according to IBGE) indicated that the Brazilian population continues to consume in large-scale. Once more, Multiplan sales grew above the retail industry average, increasing 16.9% from R$1.0 billion in 3Q07 to R$1.2 billion in the 3Q08. Same store sales (SSS) also grew 9.9% in 3Q08 when compared to the same period of the year before. 24.2%
Multiplan Sales Growth
23.3%
18.8%
Retail Sales Growth
19.8%
19.3%
13.2%
10.3%
8.3%
9.7%
10.4%
9.5%
13.2%
11.8%
19.2%
18.4% 16.2%
15.0% 12.6%
12.8%
11.0%
8.7%
11.3%
11.1% 8.2%
Aug-07 Sep-07 Oct-07 Nov-07 Dec-07 Jan-08 Feb-08 Mar-08 Apr-08 May-08 Jun-08
Brazilian Retail vs, Multipan‟s Sales Growth YoY 16.2%
16.2%
Jul-08
11.4%
3,419,102
8,136 R$/m²
16.9%
3Q07
Aug-08
Source: IBGE
2,943,431
1,029,860
9.8%
9,060 R$/m²
9.9%
1,203,680
3Q08
2,790 R$/m²
9M07
9M08
3Q07
Sales Growth (R$„000)
3,066 R$/m²
3Q08
9M07
9M08
Same Store Sales
Shopping center sales continue to show double digit growth
The company‟s shopping centers have seen consistent sales growth since the beginning of 2008, as shown on the chart above. The accumulated sales from the last 9 months have increased 16.2% when compared to the same period of 2007, and 16.9% in 3Q08 when compared to 3Q07. Sales (R$'000) Shopping BHShopping RibeirãoShopping BarraShopping MorumbiShopping ParkShopping DiamondMall New York City Center Shopping AnáliaFranco ParkShoppingBarigüi Pátio Savassi Shopping SantaÚrsula Total
3Q08 137,235 86,871 242,283 216,411 129,997 70,547 33,132 103,858 102,374 54,678 26,294 1,203,680
3Q07 120,742 73,836 219,209 181,728 118,335 57,011 31,927 92,943 91,996 42,133 1,029,860
Chg. % ▲13.7% ▲17.7% ▲10.5% ▲19.1% ▲9.9% ▲23.7% ▲3.8% ▲11.7% ▲11.3% ▲29.8% ▲0.0% ▲16.9%
9M08 389,833 247,682 698,242 614,961 369,223 199,429 101,232 303,662 301,834 148,170 44,834 3,419,102
9M07 340,497 208,813 633,416 530,661 334,502 155,627 96,606 267,098 256,887 119,324 2,943,431
Chg. % ▲14.5% ▲18.6% ▲10.2% ▲15.9% ▲10.4% ▲28.1% ▲4.8% ▲13.7% ▲17.5% ▲24.2% ▲0.0% ▲16.2%
Healthy retailer payments
Delinquency (up to 25 days of payment delay) decreased in 3Q08 to 3.7%, 70 base points lower than 3Q07 (4.4%), and the rent loss (more than 180 days of payment delay) was only 0.5% in 3Q08. Occupancy rates average was maintained at a high level during 9M08, at 97.5%. If Shopping SantaÚrsula, which is under management improvement, was excluded from September‟s occupancy rate, the figure would have reached 98.1%. It is also important to note that the growth in Multiplan‟s malls over the last eight years, has been
6
3Q08 Belo Horizonte • Brasília • Curitiba • Jundiaí • Maceió • Porto Alegre • Ribeirão Preto • Rio de Janeiro • São Caetano • São Paulo
consistently above national indexes, demonstrating the company‟s strong outperformance in leasing and tenant retention. 15.5%
97.5%
95.5% 95.0%
94.2% 95.4%
96.0%
13.2%
97.4% 96.1%
14.0%
6.3%
2000
2001
3.4%
3.3%
91.4%
2002
2003
2004
2005
2006
2007
Multiplan portfolio historical average occupancy rate
9M08
GDP IPCA Retail Sales Sales Rent NOI Brazil Portfolio Comparison between Multiplan and national historical indexes from 2000 to 2007. Source: IBGE, FGV
Rental revenue breakdown
The efficiency of merchandising
Brazilian companies have realized the marketing power of advertising in shopping centers, and have begun dedicating a meaningful part of their marketing funds to invest on merchandising in quality shopping centers. Advertisers are now seeking to leverage their brand awareness by allowing consumers to experience their product and encouraging its purchase in close proximity to where retail sales can take place. Hence, merchandising in malls has been shown to be a highly effective way to reach the mall‟s target clients. According to the Brazilian Shopping Center Association (ABRASCE) and the Market Research and Development Institute (IPDM), the average customer spends 73 minutes in a shopping center, 81% of them decide to buy something while shopping, from which 43% actually make the purchase. The impact of this consumer trend is shown in the merchandising revenue, which increased 41.1% this quarter over the same period last year, due to this appealing statistic for potential advertisers in Multiplan‟s shopping centers. +20,4%
+11,5%
+41,1%
2,562 9,580
280
Minimum
Overage
67,994
+18.6%
+12.1%
25,534
872
+48.1%
8,531
197,329
162,393
55,572
Rent 3Q07
Merchandising
Rent 9M07
Rent 3Q08
Rent revenue breakdown – 3Q07 vs. 3Q08 (R$„000)
Rent Revenue/Shopping (R$'000) BH Shopping RibeirãoShopping BarraShopping MorumbiShopping ParkShopping DiamondMall New York City Center Shopping AnáliaFranco ParkShoppingBarigüi Pátio Savassi Shopping Santa Úrsula BarraShopping Sul (BIG) Portfolio Total
Minimum 7,941 4,460 11,579 12,822 3,977 4,923 1,100 2,498 4,287 2,439 443 7 56,476
Minimum
Overage Merchandising Rent 9M08
Rent revenue breakdown – 9M07 vs. 9M08 (R$„000)
3Q08 Overage Merchandising 294 1,007 259 843 279 1,279 400 2,239 423 747 349 523 17 147 116 460 251 1,027 317 438 13 89 2,718 8,799
Minimum 7,301 2,937 10,501 9,701 3,474 4,155 1,077 2,200 4,338 1,205 7 46,896
3Q07 Overage Merchandising 307 900 134 449 339 998 387 1,370 342 617 325 352 22 167 171 459 223 654 188 271 2,438 6,237
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3Q08 Belo Horizonte • Brasília • Curitiba • Jundiaí • Maceió • Porto Alegre • Ribeirão Preto • Rio de Janeiro • São Caetano • São Paulo
Growth in rental revenues over and above inflation
The minimum and overage rents, which compose the highest part of the company‟s rent revenue, have together grown 20.0% from 3Q07 to 3Q08. Furthermore, in this quarter, Multiplan was able to adjust the amount of contracts responsible for 21.8% of the company‟s GLA, leading to an average “IGP-DI renewal effect” of 10.2%. The IGP-DI renewal effect is the weighted average of the monthly IGP-DI increase, divided by the percentage GLA adjusted on the respective month (see chart below). Comparing this IGP-DI renewal effect of 10.2% with the same store rent increase of 11.6%, it can be concluded that company had a real growth of rent per m² of 1.4% when compared to the same period of last year. 23%
9.3%
11% 8% 4%
7%
6% 5% 6%
7% 6% 6%
8%
9%
9%
11% 9%
6%
10%
12% 8%
5%
14%
7%
650 R$/m²
15%
710 R$/m²
13%
8%
7%
11.6%
3%
219 R$/m²
244 R$/m²
3Q07
3Q08
Aug/07 Sep/07 Oct/07 Nov/07 Dec/07 Jan/08 Feb/08 Mar/08 Apr/08 May/08 Jun/08 Jul/08 Aug/08 Sep/08 Contract Ajustments IGP-DI* Contract adjustments* * IGP-DI** * Based on the contract GLA ** Contracts are revised once a year using the IGP-DI of the month before and percentage of monthly contracts renewal
9M07
9M08
Same Store Rent
2. Services
Leasing success
43.6%
The service revenue in 3Q08 benefited from the leasing success of the developments and expansions which will open in 2009. Additional transfer fees due to the company‟s tenant mix improvement and higher management fees, followed by the company‟s strong growth in NOI, were some of the other reasons which lead the service revenue to increase 43.8% over 3Q07.
51,608
35,931
43.8% 18,604 12,942
3Q07
3Q08
9M07
Service Revenue (R$‟000)
9M08
3. Key Money
More key money from new projects yet to come
While the key money revenue of the projects opened in the last five years has increased, these figures also do not include key money already received from the three shopping centers and seven expansions under leasing process, that have not yet been recognized for accounting purposes. The key money related to those new projects is only recognized as revenue when projects start to operate. Over the next quarter, for instance, three expansions and one shopping center will be opened, therefore the key money for these projects will pass from expected income to the appropriate key money revenue line (expected income grew R$10.9 millions from 2Q08 to 3Q08 - refer to Appendix II). The operational key money revenue (derived from every new contract in the malls operating for more than five years) has decreased in 3Q08 given that a large proportion of tenants have renewed their contracts since 3Q07, resulting to no new key money. Key Money Revenue/Type (R$'000) Operational (Recurring) Projects opened in the last 5 yrs Portfolio Total
3Q08 1,455 2,151 3,606
3Q07 2,470 1,915 4,385
Chg. % ▼41.1% ▲12.3% ▼17.8%
9M08 8,183 8,904 17,087
9M07 7,916 5,895 13,811
Chg. % ▲3.4% ▲51.0% ▲23.7%
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3Q08 Belo Horizonte • Brasília • Curitiba • Jundiaí • Maceió • Porto Alegre • Ribeirão Preto • Rio de Janeiro • São Caetano • São Paulo
4. Parking Revenue
New operations and strong progressive growth
Parking revenue increased 63.2% to R$19.0 million in 3Q08 when compared to 3Q07. Despite starting to charge for parking at ParkShoppingBarigüi and Shopping AnáliaFranco over the last quarter, these assets did not experience any drop in its performance, as evidenced by solid sales growth in these malls over the same period. The average sale per customer at these shopping centers also increased 35.7% and 47.2%, respectively, in relation to the same period last year. Furthermore, ParkShoppingBarigüi and Shopping AnáliaFranco generated an additional R$4.0 million parking revenue over the last quarter, and all malls have shown a double digit growth in the parking income. RibeirãoShopping and ParkShopping are also set to start charging for parking in 2009. Parking Revenue/Shopping (R$'000) BHShopping BarraShopping MorumbiShopping DiamondMall New York City Center Shopping AnáliaFranco ParkShoppingBarigüi Pátio Savassi* Portfolio Total *Considering 2 months in 3Q07
3Q08 1,921 4,654 5,195 1,038 952 2,108 1,903 1,218 18,989
3Q07 1,333 4,081 3,933 840 838 612 11,637
Chg. % ▲44.1% ▲14.0% ▲32.1% ▲23.6% ▲13.6% ▲0.0% ▲0.0% ▲99.0% ▲63.2%
9M08 5,320 13,387 13,177 2,907 3,026 3,367 2,088 3,220 46,492
9M07 2,904 7,981 10,237 1,875 1,776 612 25,385
Chg. % ▲83.2% ▲67.7% ▲28.7% ▲55.0% ▲70.4% ▲0.0% ▲0.0% ▲426.2% ▲83.2%
5. Real Estate Sales
The official launch of Cristal Tower
Real estate sales amounted to R$2.3 million in 3Q08, with R$1.5 million representing Cristal Tower sales, and the rest due to Centro Profissional MorumbiShopping project accruals. The success of BarraShopping Sul has been a very encouraging sign for Multiplan‟s launch of Cristal Tower, one of the company‟s mixed-use projects, in a prime region of Porto Alegre. The sales process for Cristal Tower units began this quarter, but construction has not yet begun.
9
3Q08 Belo Horizonte • Brasília • Curitiba • Jundiaí • Maceió • Porto Alegre • Ribeirão Preto • Rio de Janeiro • São Caetano • São Paulo
EXPENSES 1. Mall Expenses
Lower expenses leading to higher efficiency
Mall expenses decreased from R$13.6 million in 3Q07 to R$11.2 million in 3Q08, therefore being reduced 17.2%. Even though Multiplan has increased its own GLA through minority stakes and a shopping acquisition, the company managed to reduce costs since the beginning of 2008, leading to a reduction in absolute figures by R$2.3 million, and therefore to higher NOI margins. These efforts include the reduction of marketing contribution by R$0.4 million, given the fact that the company‟s malls are consolidated and already have strong contributions from its tenants, which can now perpetuate the brand. The company also had R$0.4 million cost reduction related to vacant stores (not considering Shopping SantaÚrsula), and a R$0.5 million reduction due to lower contribution for tenants with cost-limited contracts. The higher performance was responsible for the NOI growth of 43.2% to R$67.9 million in 3Q08, furthermore achieving a NOI margin of 85.8%, a meaningful increase compared to the 77.7% NOI margin in 3Q07.
DESTA 14,678 QUES 14,032 13,583 FINANCEIR OS
184,077
200, 000
88. 0%
85.8%
180, 000
86. 0%
141,257
160, 000
82.6%
84. 0%
140, 000
12,895
81.1%
120, 000
-17.2%
82. 0%
100, 000
80. 0%
77.7%
67,911
80, 000
11,244
60, 000
78. 0%
47,417 76. 0%
40, 000
74. 0% 20, 000
-
3Q07
4Q07
1Q08
2Q08
72. 0%
3Q07
3Q08
Historical mall expenses performance (R$‟000)
NOI Calculation Rent Net Parking Revenue Operational Result Shopping Expenses NOI NOI Margin Key Money Signed Contracts NOI + KM NOI + KM Margin
3Q08 67,994 11,161 79,155 (11,244) 67,911 85.8% 14,579 82,490 88.0%
3Q08
9M07
9M08
NOI (R$‟000) and NOI Margin (%)
3Q07 55,572 5,428 61,000 (13,583) 47,417 77.7% 9,515 56,932 80.7%
Chg. % ▲22.4% ▲105.6% ▲29.8% ▼17.2% ▲43.2% ▲806 b.p ▲53.2% ▲44.9% ▲727 b.p
9M08 197,329 25,564 222,893 (38,816) 184,077 82.6% 42,185 226,262 85.4%
9M07 162,393 11,698 174,091 (32,834) 141,257 81.1% 37,828 179,085 84.5%
Chg. % ▲21.5% ▲118.5% ▲28.0% ▲18.2% ▲30.3% ▲145 b.p ▲11.5% ▲26.3% ▲85 b.p
2. Parking Expenses
Efficiency rising quarter-on-quarter
The parking revenue has grown at a faster pace than parking expenditures. When compared to 3Q07, net parking revenue increased 105.6% (before tax) to R$11.2 million. The main reason for such change is that Multiplan started to charge for parking at two shopping centers in 2Q08, which alone generated R$4.0 million. Another reason is that these two malls follow new condominium bylaws, that distribute 100% of the parking revenues to its owners (not sharing it with the condominium). From nine parking operations already in progress, four of them do not share half of the revenue with the condominium. Apart from these new operations, all shopping centers with parking showed double digit revenue growth. Net Revenues (R$‘000) Parking Revenue Parking Expenses Total
3Q08 18,989
3Q07 11,637
(7,828) 11,161
(6,209) 5,428
Chg. % ▲63.2% ▲26.1% ▲105.6%
9M08 46,492 (20,928)
9M07 25,385 (13,687)
25,564
11,698
Chg. % ▲83.1% ▲52.9% ▲118.5%
10
3Q08 Belo Horizonte • Brasília • Curitiba • Jundiaí • Maceió • Porto Alegre • Ribeirão Preto • Rio de Janeiro • São Caetano • São Paulo
3. General and Administrative Expenses (G&A)
Investments on all fronts
G&A costs increased from R$13.1 million in 3Q07 to R$22.3 million in 3Q08, but fell 18.2% compared to the R$27.3 million costs of 2Q08. The increase in G&A expenses seen this year is the result of Multiplan expansion plans, which required additions to be made to both development and head office staffing and systems. On the development side, the company has focused its efforts to deliver all projects, both new and currently under construction. These costs cover several aspects, including the approval for unannounced projects, and visits to construction sites, with the purpose of controlling and evaluating these projects. These investments are crucial in delivering high quality development projects with high returns. On the marketing side, Multiplan has largely invested in the projects to come. Crystal Tower marketing efforts alone contributed with R$1.4 million in this account, leading to the already mentioned selling success. On the corporate front Multiplan has increased its team and opened a new branch in São Paulo, preparing itself for the malls and expansions to open and to better control the projects being developed. Finally, in our IT department substantial efforts have been made, and Multiplan is proud to announce the ERP system project. The company is exchanging its integrated ERP system for another after a one year study, with the goal of streamlining the company‟s operations. The new system will lead to a more efficient control, report generation, and greater flexibility to integrate new shopping centers into the management structure. The company has started the implementation process this quarter and plans to operate the ERP in 100% of its malls in the first quarter of 2009. 4. Cost of Real Estate Sold
Cristal Tower costs now recognized
The Cristal Tower was launched August 18th and now has 58% of its office units sold, therefore contributing to the cost of real estate sold account, which include land and brokerage expenses. However, when compared to the same period of last year, which included Centro Profissional MorumbiShopping‟s construction peak, the result was 17.6% of the quarter cost of the year before, mainly because the Cristal Tower project is in the beginning of its commercialization and construction phase. Equity Pickup
Royal Green Península (RGP) close to be delivered
Equity pickup decreased from R$1.7 million to R$-1.6 million in 3Q08, due to the Royal Green Peninsula construction cost budget review in 3Q08. The project is expected to be concluded by the end of this year. Equity Pickup (R$'000) RGP Revenue RGP Cost Sub-Total Others Total
3Q08 3,848 5,598 (1,750) 110 (1,640)
3Q07 4,372 2,712 1,660 0 1,660
Chg. % ▼12.0% ▲106.4% N/A ▲0.0% N/A
Up to Date 62,854 44,769 18,085 18,085
Budget 72,182 58,041 14,141 14,141
11
3Q08 Belo Horizonte • Brasília • Curitiba • Jundiaí • Maceió • Porto Alegre • Ribeirão Preto • Rio de Janeiro • São Caetano • São Paulo
RESULTS Financial Results, Debt and Cash
Gross debt and cash position
During 3Q08 Multiplan‟s gross debt was reduced by 29.3% mainly due to amortization. Multiplan‟s cash position decreased 56.5%, as a result of the CAPEX spent on the new developments in the pipeline, leading the company to a net debt position of R$55.9 million. Financial Position Breakdown Short Term Debt Loans and Financings Share Acquisition Obligations for acquisition of good
DESTA QUES Long Term Debt FINANCEIR Loans and Financings OS Obligations for acquisition of good
30/9/2008 62,287 15,704 46,583
31/06/2008 121,640 15,726 53,041 52,873
Chg. % ▼48.8% ▼0.1% ▼100.0% ▼11.9%
108,345 9,978 98,367
119,604 13,584 106,020
170,632 114,716 55,916
241,244 263,893 (22,649)
▼9.4% ▼26.6% ▼7.2% ▼29.3% ▼56.5% N/A
Gross Debt Cash Net Debt
Healthy debt position
For the first time since its IPO, the company went from a net cash to a net debt position. However, the balance sheet continues to show a low debt structure, enabling the company to utilize its existing capacity for debt as required, with the liabilities to equity ratio currently at only 10.8%. Financial Position Analysis
3Q08
Net Debt/EBITDA*
0.2x
Gross Debt/EBITDA*
0.7x
Net Debt/FFO*
0.2x
Gross Debt/FFO*
0.7x
Net Debt/Equity
2.7%
Liabilities/Assets
10.8%
Gross Debt/Liabilities
68.6%
Interest Coverage
13.3x
Financial Revenue/Cash
6.0%
Financial Expenses/Gross Debt
3.0%
*Annualized (on a 3 month basis), considering December as twice the monthly value
12
3Q08 Belo Horizonte • Brasília • Curitiba • Jundiaí • Maceió • Porto Alegre • Ribeirão Preto • Rio de Janeiro • São Caetano • São Paulo
Debt profile: acquisition
Certainly the low cost of Multiplan‟s debt, when compared to its investments, is due to its overall debt profile. Only 15% of its total debt is bank related, while the other 85% was generated by past acquisitions, which were financed by its sellers. This type of debt has led to lower interest/ financing costs, but also limited to a relatively shorter term profile. Debt Indexes in 3Q08 Short Term Interest Rate TJLP IGP-M IPCA Fixed Others
6.25% 0.00% 7.60% 12.00% -
Long Term Interest Rate (R$‘000)
14,133 26 18,774 20,668 8,686 62,287
Gross Debt
39,442
(R$‘000)
6.25% 0.00% 7.38% 12.00% -
8,617 851 67,365 31,002 509 108,344
Total Interest Rate
(R$‘000)
6.25% 0.00% 7.43% 12.00% -
22,750 878 86,139 51,669 9,195 170,631
39,442
Banks 15%
23,941 17,001 13,638 5,277
2008
13,108 4,465
2009
2010
Loans and Financings
1,510 2011
26 2012
12,016
Others 85%
765 >=2013
Obligations for acquisition of good
Multiplan‟s debt in 3Q08
Amortization schedule (R$„000)
Future debt position
As already announced, Multiplan has signed two land acquisition contracts and will be investing in the development of seven expansions and five greenfield projects through to 2010. This will likely impact the debt profile of the company. First, Jundiaí and São Caetano sites will add R$122 million to the company‟s net debt position over the short term. At the same time, in order to finance its future growth and maintain a healthy cash position, the company may utilize additional leverage capitabilities. Below is a chart that tries, in a very simplified version, to give a better understanding of the financing needs of the company. Please note that this chart does not consider any cash position needed by the company or changes in the future FFO generation. 862,440 639,072
4Q08 Investiments Until 2010 743,175
3 X FFO 9M08 524,357
Cash in Sep-08 114,716
Debt. Amort Until 2010 119,265
Cash Investiments Cash position vs. Investments (R$‟000)
13
3Q08 Belo Horizonte • Brasília • Curitiba • Jundiaí • Maceió • Porto Alegre • Ribeirão Preto • Rio de Janeiro • São Caetano • São Paulo
Adjusted Net Income and FFO
Net and adjusted income boost growth strategy
Multiplan‟s adjusted net income grew 16.7% this quarter, comparing to the same period of the year before. The company‟s growth in the last 9 months was 31.4% above 9M07. Adjusted Income Calculation (R$'000) Net Income Amortization Deferred Taxes¹ Non-recurring expenses² Adjusted Income
3Q08
3Q07
Chg. %
9M08
9M07
Chg. %
9,405 31,337 6,359 47,101
(25,348) 30,022
N/A ▲4.4% ▼100.0% ▲16.7%
39,136 94,242 17,844 151,222
(8,317) 86,376
N/A ▲9.1% ▼100.0% ▲31.4%
35,683 40,357
37,044 115,103
¹ Due to the Bertolino‟s reverse acquisition ² Refers to IPO costs
The FFO increased 18.3% from R$46.4 millions in 3Q07 to R$54.8 millions in 3Q08. The company has been growing 32.9% in the last 9 months when comparing to 9M07. FFO Calculation (R$'000) Net Income Amortization Deferred Taxes¹ Non-recurring expenses² Depreciation Adjusted FFO
3Q08 9,405 31,337 6,359 7,732 54,833
3Q07 (25,348) 30,022 35,683 5,993 46,350
Chg. % N/A ▲4.4% ▼100.0% ▲29.0% ▲18.3%
9M08 39,136 94,242 17,844 23,564 174,786
9M07 (8,317) 86,376 37,044 16,449 131,552
Chg. % N/A ▲9.1% ▼100.0% ▲43.3% ▲32.9%
Adjusted EBITDA
EBITDA maintains double digit growth
EBITDA in 3Q08 achieved R$57.4 million, increasing 17.2% when compared to 3Q07. Multiplan has invested in its development pipeline, which might lead to higher revenue and cost reductions, therefore driving the EBITDA margin even higher. EBITDA Calculation (R$'000) Net Income Tax Income and Social Contribution Financial Result Depreciation Participation of the minority stockholders Amortization Non-recurring expenses¹ Adjusted EBITDA
3Q08 9,405 10,445 (1,745) 7,732 201 31,337 57,375
3Q07 (25,348) 5,570 (3,064) 5,993 81 30,022 35,683 48,937
Chg. % N/A ▲87.5% ▼43.0% ▲29.0% ▲149.2% ▲4.4% ▼100.0% ▲17.2%
9M08 39,136 23,423 (9,470) 23,564 518 94,242 171,413
9M07 (8,317) 7,564 5,756 16,449 77 86,376 37,044 144,949
Chg. % N/A ▲209.7% N/A ▲43.3% ▲572.7% ▲9.1% ▼100.0% ▲18.3%
¹ Refers to IPO costs
14
3Q08 Belo Horizonte • Brasília • Curitiba • Jundiaí • Maceió • Porto Alegre • Ribeirão Preto • Rio de Janeiro • São Caetano • São Paulo
MAIN INDICATORS Operating and Financial Performance Indicators (R$'000) Financials (MTE %) Gross Revenue Net Revenue Headquarters Rent Revenue Rent Revenue/m² Adjusted EBITDA Adjusted EBITDA/m² Adj. EBITDA Margin
3Q08
3Q07
Chg. %
9M08
9M07
Chg. %
111,461
93,081
314,784
256,428
101,099 22,287
85,095 13,069
▲19.7% ▲18.8%
286,097 61,260
234,223 37,400
▲22.8% ▲22.1%
67,994 269 R$/m²
55,572 242 R$/m²
197,329 782 R$/m²
162,393 706 R$/m²
57,375
48,937
171,413
144,949
227 R$/m²
213 R$/m²
▲6.8%
679 R$/m²
630 R$/m²
▲7.7%
56.7% 67,911
57.5% 47,417
▼76 b.p
59.9% 184,077
61.9% 141,257
▼197 b.p
729 R$/m² 82.6%
614 R$/m² 81.1%
174,786 693 R$/m² 9M08
131,552 572 R$/m² 9M07
402,528 m² 252,359 m²
377,879 m² 229,914 m²
313,150 778 R$/m²
260,608 690 R$/m²
3,419,102 8,494 R$/m²
2,943,431 7,789 R$/m²
9,060 R$/m²
8,136 R$/m²
710 R$/m²
650 R$/m²
12.6% 7.6%
15.1% 8.2%
5.0% 4.8%
6.9% 3.5%
97.2% 3.6%
97.5% 5.4%
1.1%
0.8%
DESTAQUES 269 R$/m² FINANCEIROS Net Operating Income Margin 85,8% Net Operating Income (NOI) Net Operating Income/m² Adjusted FFO
206 R$/m² 77.7%
54,833 217 R$/m² 3Q08
46,350 202 R$/m² 3Q07
Adjusted Total GLA Adjusted Own GLA
402,528 m² 252,359 m²
377,879 m² 229,914 m²
Rent Revenue Rent Revenue /m²
107,801 268 R$/m²
91,716 243 R$/m²
Total Sales Total Sales/m²
1,203,680 2,990 R$/m²
1,029,860 2,725 R$/m²
Same Stores Sales/m²
3,066 R$/m²
2,790 R$/m²
Same Stores Rent/m²
244 R$/m²
219 R$/m²
12.2% 7.4%
14.5% 7.8%
4.8% 2.2%
6.7% 1.9%
97.2% 3.7%
97.5% 4.4%
0.5%
0.9%
Adjusted FFO/m² Performance (100%)
Occupancy Costs Rent as Sales % Others as Sales % Turnover Occupancy Rate Delinquency (25 days delay) Rent Loss
▲70.5% ▲22.4% ▲11.5% ▲17.2%
▲43.2% ▲30.5% ▲806 b.p ▲18.3% ▲7.8% Chg. % ▲6.5% ▲9.8% ▲17.5% ▲10.3% ▲16.1% ▲9.7% ▲9.9% ▲11.6% ▼2 b.p ▼42 b.p ▼189 b.p ▲33 b.p ▼29 b.p ▼67 b.p ▼40 b.p
▲63.8% ▲21.5% ▲10.7% ▲18.3%
▲30.3% ▲18.7% ▲145 b.p ▲32.9% ▲21.0% Chg. % ▲6.5% ▲9.8% ▲20.2% ▲12.8% ▲16.2% ▲9.0% ▲11.4% ▲9.3% ▼245 b.p ▼55 b.p ▼190 b.p ▲128 b.p ▼29 b.p ▼179 b.p ▲28 b.p
Multiplan's GLA is calculated below including the areas of Supermarket BIG, which is already in operation at BarraShopping Sul. GLA Effect Multiplan Interest Initial GLA BarraShopping Sul RibeirãoShopping (additional 20%) Final GLA
3Q08 252,359 m² 14,400 m² 0 m² 266,759 m²
3Q07 Chg. % ▲9.8% 229,914 m² ▲0.0% 14,400 m² 7,838 m² ▼100.0% ▲5.8% 252,152 m²
9M08 252,359 m² 14,400 m² 0 m² 266,759 m²
9M07 Chg. % ▲9.8% 229,914 m² ▲0.0% 14,400 m² 7,838 m² ▼100.0% ▲5.8% 252,152 m²
15
3Q08 Belo Horizonte • Brasília • Curitiba • Jundiaí • Maceió • Porto Alegre • Ribeirão Preto • Rio de Janeiro • São Caetano • São Paulo
GROWTH STRATEGY Timetable of Expansions and New Developments - '000 m² Growth of 72% in own GLA +72%
459 m²
459 m²
2H14
Future
437 m² 420 m² 401 m²
356 m²
363 m²
342 m² DESTAQUES 329 m² FINANCEIROS New Mall Development Mall Expansions
267 m²
Current
4Q08
1H09
2H09
1H10
2H10
1H11
2H11
Investment
Shopping centers under construction are prioritized
The investment in shopping centers under construction and expansions is Multiplan‟s main priority. In November, the company is delivering BarraShopping Sul, which is expected to add R$28.4 million of NOI in its first year of operation to Multiplan‟s portfolio and in May 2009 the company expects to open to Shopping VilaOlímpia. These developments were the main reason why investments in shopping developments increased 28.8% over the previous quarter this year. As for the expansions, Multiplan opened ParkShopping Fashion Expansion in October and expects to open RibeirãoShopping Expansion (phases 1 and 2) and ParkShoppingBarigüi Gourmet Expansion by the end of this year. Once again, investments in expansions more than doubled quarter-on-quarter, as the company has seven expansions under development. Future investments were increased due to the recently announced ParkShoppingBarigüi Expansion II, which alone will receive an estimated investment of R$40.6 million, adding 85 new stores.
28.8%
94,180
203.4%
52,203
73,142 281.5%
141.4%
17,207
30,297
4,510 1Q08
2Q08
3Q08
Investments in shopping center developments quarter-on-quarter
1Q08
2Q08
3Q08
Investments in shopping center expansions quarter-on-quarter
16
3Q08 Belo Horizonte • Brasília • Curitiba • Jundiaí • Maceió • Porto Alegre • Ribeirão Preto • Rio de Janeiro • São Caetano • São Paulo
Multiplan also invests in current assets
In 2008 Multiplan has not only focused on future projects, but also ensured that its current assets will continue to be premium malls in the future through active renovation programs. This quarter, the company has invested R$10.7 million in the renovation of its malls. CAPEX (R$'000)
3Q08
Renovations & Others
10,724
Shopping Development
94,180
Shopping Expansion
52,203
Land Acquisition
13,521
Total
170,628
%
7.9% 6.3%
Reference
Renovations & Others
6.3% All shopping centers and others BSS, SVO, Maceió, LagoSul, Jundiaí, other projects BHS, RBS, PKB II,PKB Gourmet, PKS 30.6% (Fashion & Frontal), SAF 7.9% São Caetano, Barra da Tijuca
Shopping Development
55.2%
30.6%
Shopping Expansion
55.2% Land Acquisition
100.0%
The company‟s investment pipeline was increased by R$238 million in 3Q08, due to the announcement of the JundiaíShopping project and the ParkShoppingBarigüi Expansion, which will together add 43,214 m² of GLA to the company‟s portfolio. This way, the Jundiaí land acquisition was reclassified to the “shopping development” line. The company will do the same to other amounts in the “land acquisition” line as the projects related to each land parcel are announced. Use of Proceeds (R$'000) Renovations & Others Shopping Development
2007
9M08
4Q08
2009
22,814
41,709
1,931
10,519
102,646
197,619
72,759
220,873 92,938
2010
Shopping Expansion
11,431
73,919
65,569
Land Acquisition Shopping Acquisition and Minority Acquisition Working Capital
16,183
116,053
71,000
287,765
28,668
-
-
44,114
-
-
-
-
484,953
457,968
211,259
324,330
207,587
Total
Reference > 2008
6,965 All shopping centers and others BSS, SVO, Maceió, LagoSul, Jundiaí, 192,087 other projects BHS, RBS, PKB II,PKB Gourmet, PKS 8,535 (Fashion & Frontal), SAF São Caetano, Barra da Tijuca -
Total
When including the projects that were being commercialized in 2Q08, the percentage leased went from 82% to 88% (even with the increase in stores in some projects). Taking into account the company‟s recently announced projects (JundiaíShopping and ParkShoppingBarigüi expansion), the number of stores that will open will increase to 1,099 and are currently 67% leased. 669,227 484,953
324,330 207,587
2007
2008
2009
Renovations & Others Shopping Development Shopping Expansion Land Acquisition Shopping Acquisition and Minority Acquisition Working Capital Total CAPEX schedule (R$„000) – 2007 to 2010
To be Leased 33%
Leased 67%
2010
Percentage of stores leased considering the following projects: BHS Exp., SAF Exp., RBS Exp., PKS Exp. Fashion, PKS Exp. Frontal, BSS, SVO, JDS, PKB Exp. Gourmet and PKB Exp. II
Renovations Multiplan is known for having some of the best shopping centers in Brazil, due to its Top Of Mind position, high sales, size and additional aspects. The company believes that this is a consequence of its constant improvements in its shopping centers, which includes offering the best service, tenant mix, location and convenience. For this, Multiplan also invests in renovating its shoppings centers whenever the company believes that market trends demand for changes in order to maintain its excellence. During the last nine months, Multiplan has made one of the largest investments the company has ever done in renovations - R$41.7 million - bringing great improvements
17
3Q08 Belo Horizonte • Brasília • Curitiba • Jundiaí • Maceió • Porto Alegre • Ribeirão Preto • Rio de Janeiro • São Caetano • São Paulo
to some of its leading malls: BH Shopping, BarraShopping and MorumbiShopping. Below are described some of these improvements. BarraShopping This center went through its most impressive renovation. The old shopping model that focused only on the consumer and the products exposed in the mall was adapted to create a brighter mall with wooden floors, clean design, glass and other improvements which give a warmer and relaxing atmosphere, making the consumers feel at home. Stairs, handrails, floor, roofs, visual communication, windows and catwalk were some of the places that were the focus of these investments. This renovation also improved the malls tenant mix with the entrance of a new mega book store and a new department store. These stores altered the space provided to assemble the desired environment. The gourmet area was also completely changed and leased, and the food court called BarraPort was regenerated in order to facilitate the seating of its customers. Thanks to the new children‟s corner, parents can now shop worry-free, while their children remain entertained. This space embraces the concept of a daycare with a capacity of 60 children in its 200 m2. New decoration
Kids’ corner
BHShopping The first mall of Multiplan‟s portfolio, BHShopping, recently underwent its largest renovation. Furniture, lighting, landscaping, mirrors, visual communication were some of the aspects of the mall that were improved. The center is set to integrate seamlessly with its expansion, which will add a whole new floor to the mall and will provide modernization and improved traffic flows. Both the gourmet area and the food court underwent investments to adapt to changing consumer needs, and strengthen the center‟s position as the top of mind mall in Belo Horizonte.
18
3Q08 Belo Horizonte • Brasília • Curitiba • Jundiaí • Maceió • Porto Alegre • Ribeirão Preto • Rio de Janeiro • São Caetano • São Paulo
Diamond Mall Multiplan invested in the mall‟s decoration by changing its furniture, mirrors, lighting, and landscaping. The mall‟s visual presentation was another detail that needed upgrading, therefore it was also improved. The food court and entertainment center were also benefited by the renovations and had significant changes, enhancing the flow of people. The old market place has been removed and is being prepared to receive more sophisticated operations, matching the consumer profile of the mall. These upgrades gave the mall a fresher look, attracting consumers and easing their circulation through its halls. Before
After
MorumbiShopping MorumbiShopping is also completing the largest refurbishment of its existence. During the last two years the mall has been changed, floor after floor and is now on the final floor, which includes its famous food court (elected the best food court in a shopping center, in São Paulo, by the Época Magazine on October 2008). Like BarraShopping, the whole mall became brighter, with a clean design being in perfect harmony with the expansion opened in the end of 2006. The shopping center also investmented in its parking lot to support the growing consumer traffic to the mall. Before
After
19
3Q08 Belo Horizonte • Brasília • Curitiba • Jundiaí • Maceió • Porto Alegre • Ribeirão Preto • Rio de Janeiro • São Caetano • São Paulo
NewYorkCityCenter Multiplan‟s only open concept mall, had the walkway covering replaced for a more extensive one in order to provide more protection from the elements. This also improved the access to BarraShopping‟s new gourmet center, enabling the consumers to walk between the centers without being affected by the weather outside. The parking lot was also renovated and Multiplan invested in improving the quality of its structure as a whole. Before
After
ParkShopping The uplift of the central court and the increase of parking slots were the focus of ParkShopping‟s revitalizations. The mall has benefitted greatly by improving its decoration (furniture included), as the ambiance is extremely important in the shopping center and retail business. The parking lot gained 600 new slots in order to accommodate more consumers, always focusing on delivering accessibility and convenience. Before
After
ParkShoppingBarigüi ParkShoppingBarigüi has invested in a new parking lot, gourmet expansion, family space and convention center. The investments made throughout the mall were aimed at improving the landscape and design in order to turn the environment into a more comfortable space for customers and their families. The 1,000 m2 convention center will be used to host and promote exhibitions. Multiplan purchased the land beside the mall with the intention to build its third expansion, as well as additional projects, but in the meantime it will be used as a new parking lot, convention center and as a connection to the local highway. Gourmet expansion
Project for new parking lot
20
3Q08 Belo Horizonte • Brasília • Curitiba • Jundiaí • Maceió • Porto Alegre • Ribeirão Preto • Rio de Janeiro • São Caetano • São Paulo
Shopping Mall - Greenfields
Five greenfileds in the pipeline
Multiplan has five new greenfiled projects in its pipeline accounting for a total GLA of 171,882 m² and a third year NOI of R$111.4 million, which is more than half of the company‟s NOI in 2007. Shopping Centers Project BarraShopping Sul Shopping VilaOlímpia Shopping Maceió LagoSul Shopping JundiaíShopping Total
Opening Nov/08 May/09 May/11 Jul/11 Nov/10
$1.000 GLA MTE % (constr.) MTE Capex Key Money NOI 3rd year 68,378 m² 100.0% 310,435 34,229 46,815 29,936 m² 42.0% 70,533 22,361 8,874 27,582 m² 50.0% 67,255 8,005 10,893 25,811 m² 100.0% 144,704 19,642 18,237 34,575 m² 100.0% 197,691 17,853 26,618 186,282 m² 83.3% 790,618 102,090 111,437
BarraShopping Sul GLA Launch Opening Interest Key Money (% MTE) NOI 1st year (% MTE) NOI 3rd year (% MTE) CAPEX (% MTE) CAPEX Invested
68,378 m2 (Including BIG) April 2007 November 2008 100% R$34.2 million R$28.4 million R$46.8 million R$310.4 million 63%
Status: Under Construction The entire company and the mall‟s tenants have dedicated a great amount of effort to ensure that the largest mall in the South region of the country will open its doors to Porto Alegre‟s consumers just after its opening party on November 17th. This bold endeavor has demanded the knowledge and expertise accumulated over the 34 years of Multiplan‟s existence. BarraShopping Sul will open as the second largest mall in Multiplan‟s portfolio, having only 1,397 m² of GLA less then BarraShopping, which was opened in 1981 and has passed through six expansions and several renovations. The size of the stores in BarraShopping Sul will be 50% larger than the average size of the stores in the company‟s portfolio, following international market trends, and the mall will also have the largest entertainment space in Latin America.
Shopping VilaOlímpia GLA Launch Opening Interest Key Money (% MTE) NOI 1st year (% MTE) NOI 3rd year (% MTE) CAPEX (% MTE) CAPEX Invested
29,936 m2 July 2007 May 2009 42% (30% after opening) R$22.4 million R$7.6 million R$8.9 million R$70.5 million 23%
Status: Under construction Shopping VilaOlímpia, in the heart of São Paulo, has shown great progress in its construction phase. The underground parking floor has been built, leading the shopping mall to grow above the ground level, and giving pedestrians of the Olimpíadas Avenue the opportunity to follow the mall‟s construction. Recognizing tenants demand for this mall, Multiplan acquired a land parcel beside the mall, increasing the project‟s area by 3,035 m² of GLA.
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3Q08 Belo Horizonte • Brasília • Curitiba • Jundiaí • Maceió • Porto Alegre • Ribeirão Preto • Rio de Janeiro • São Caetano • São Paulo
Shopping Maceió GLA (Estimated) Launch Opening Interest Key Money (% MTE) NOI 1st year (% MTE) NOI 3rd year (% MTE) CAPEX (% MTE) CAPEX Invested
27,582 m2 June 2009 May 2011 50% R$8.0 million R$8.3 million R$10.9 million R$67.3 million 19%
Status: Undergoing master plan and tenant mix The demand for the project is still very high, but the launch has been postponed to capitalize on better market momentum. Nevertheless Multiplan has already assigned a construction company for the project, preparing for its first step towards development in the northeastern part of Brazil.
LagoSul Shopping GLA Launch Opening Interest Key Money (% MTE) NOI 1st year (% MTE) NOI 3rd year (% MTE) CAPEX (% MTE) CAPEX Invested
25,811 m2 March 2009 (expected) July 2011 (expected) 65% (35% land swap) R$19.6 million R$13.9 million R$18.2 million R$144.7 million 1%
Status: Undergoing necessary approvals After its approval, the LagoSul Shopping project was reviewed by the state city hall, which asked for some adjustments to the proposed master plan, which has delayed the project. Multiplan is currently studying the suggested changes. Capital on this project has only been spent in conjunction with project planning and approvals, as control of the site was negotiated through a land swap.
Jundiaí Shopping GLA Launch Opening Interest Key Money (% MTE) NOI 1st year (% MTE) NOI 3rd year (% MTE) CAPEX (% MTE) CAPEX Invested
34,575 m2 September 2008 November 2010 100% R$17.8 million R$20.6 million R$26.6 million R$197.7 million 1%
Status: Leasing process JundiaíShopping will be located in a privileged area, at a very easy-access region in one of the busiest parts of the city. The city of Jundiaí has the 25th largest GDP in Brazil and is situated only 60km from the state capital, São Paulo. In its first stage, the mall will have a GLA of 34,575 m 2, 193 stores and 2,079 parking slots. The project will follow the company‟s strategy of building mixed-use projects, including in its master plan two office towers and an expansion with over 13,000 m2 of GLA for future launching.
22
3Q08 Belo Horizonte • Brasília • Curitiba • Jundiaí • Maceió • Porto Alegre • Ribeirão Preto • Rio de Janeiro • São Caetano • São Paulo
Multiplan will own a 100% share of the mall and will manage it. Total investments are estimated at R$197.7 million and the project‟s unleveraged real internal rate of return is expected to exceed 18% p.a.. The company has been approached by key tenants since the announcement of the land acquisition and has started the leasing process with great success. Shopping Mall Expansions
Three expansions ready to go
Multiplan has been dedicating a lot of time during 3Q08 to the delivery of the expansion projects under development, capitalizing on the high returns and defensive value of this type of growth. In the next quarter the company will start to see the financial rewards of these efforts, with the opening of three expansion projects under development. Expansions Project BHShopping Exp. Shopping AnáliaFranco Exp. RibeirãoShopping Exp. ParkShopping Exp. Fashion ParkShopping Exp. Frontal ParkShoppingBarigüi Gourmet ParkShoppingBarigüi Exp. II Total
(R$’000) Opening
GLA
Oct/09 May/09 May/09 Oct/08 Aug/09 Dec/08 May/10
10,869 m² 11,909 m² 7,067 m² 2,985 m² 8,571 m² 1,558 m² 8,639 m² 51,598 m²
MTE % (constr.) 80.0% 30.0% 76.2% 60.0% 62.5% 100.0% 100.0% 67.8%
MTE Capex
Key Money
NOI 3rd year
91,056 16,721 40,959 10,067 42,212 6,675 40,616 248,306
12,219 4,051 2,499 1,386 7,705 12,100 39,960
12,051 3,790 3,742 2,275 8,500 376 7,024 37,758
BH Shopping Expansion GLA Launch Opening Interest Key Money (% MTE) NOI 1st year (% MTE) NOI 3rd year (% MTE) CAPEX (% MTE) CAPEX Invested
10,869 m2 October 2007 October 2009 80% R$12.2 million R$9.9 million R$12.1 million R$91.1 million 27%
Status: Under construction The 5th expansion of BHShopping besides its leasing success is also showing a great progress during its construction. The expansion which will add 101 stores and 1,000 new parking slots will become the largest one ever made in the shopping.
Shopping AnáliaFranco Expansion GLA Launch Opening Interest Key Money (% MTE) NOI 1st year (% MTE) NOI 3rd year (% MTE) CAPEX (% MTE) CAPEX Invested
11,909 m2 November 2007 May 2009 30% R$4.1 million R$3.4 million R$3.8 million R$16.7 million 24%
Status: Under construction The leasing of this project has come to its final stores, showing the high growth of the eastern region of São Paulo and the high attraction power of the shopping. Construction is according to schedule and will be finished on the first half of the next year. The project involves the addition of a third floor and 750 new parking spaces.
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3Q08 Belo Horizonte • Brasília • Curitiba • Jundiaí • Maceió • Porto Alegre • Ribeirão Preto • Rio de Janeiro • São Caetano • São Paulo
RibeirãoShopping Expansion GLA Launch Opening Interest Key Money (% MTE) NOI 1st year (% MTE) NOI 3rd year (% MTE) CAPEX (% MTE) CAPEX Invested
7,067 m2 October 2007 May 2009 (phase 3) 76.2% R$2.5 million R$3.1 million R$3.7 million R$41.0 million 35%
Status: Under construction RibeirãoShopping Expansion is scheduled for phase completion in the next quarter. This expansion is being executed on three fronts, two of which, including the largest phase with two key anchor stores, will open in the next quarter, while the remaining 429 m² food court expansion will open in the first half of 2009. These two new anchors in particular will further consolidate the center‟s position in the city of Ribeirão Preto, representing a strategic expansion for the company.
ParkShopping Fashion Expansion GLA Launch Opening Interest Key Money (% MTE) NOI 1st year (% MTE) NOI 3rd year (% MTE) CAPEX (% MTE) CAPEX Invested
2,985 m2 March 2007 October 2008 60% R$1.4 million R$1.7 million R$2.3 million R$10.1 million 60%
Status: Under construction The ParkShopping Fashion Expansion is the first of three expansions in the mall, and is expected to be open by the date of this release. This expansion includes premium retail brands and highlights a new style focus for the center.
ParkShopping Frontal Expansion GLA Launch Opening Interest Key Money (% MTE) NOI 1st year (% MTE) NOI 3rd year (% MTE) CAPEX (% MTE) CAPEX Invested
8,571 m2 October 2007 August 2009 62.5% R$7.7 million R$7.5 million R$8.5 million R$42.2 million 16%
Status: Under construction The biggest of three expansions planned for this center is one year from completion, and is almost entirely leased, with construction already started. Due to the existing s strength of the mall, this expansion includes a large number of satellite stores, whose average rent per m² was approximately 50% above the rent per m² currently being charged in the center.
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3Q08 Belo Horizonte • Brasília • Curitiba • Jundiaí • Maceió • Porto Alegre • Ribeirão Preto • Rio de Janeiro • São Caetano • São Paulo
ParkShoppingBarigüi Gourmet Expansion GLA Launch Opening Interest Key Money (% MTE) NOI 1st year (% MTE) NOI 3rd year (% MTE) CAPEX (% MTE) CAPEX Invested
1,558 m2 February 2008 December 2008 100% (84% after opening) R$0.3 million R$0.4 million R$6.7 million 17%
Status: Under development The gourmet expansion of ParkShoppingBarigüi is fully leased, its GLA has increased over 30%, and tenants are already preparing their restaurants to open by the end of the year. The expansion will be opened on the third floor and even though it is a small expansion, the company expects the expansion to increase the attractiveness of the center, leading to benefits across the entire mall.
ParkShoppingBarigüi Expansion II GLA Launch Opening Interest Key Money (% MTE) NOI 1st year (% MTE) NOI 3rd year (% MTE) CAPEX (% MTE) CAPEX Invested
8,639 m2 September 2008 May 2010 100% R$12.1 million R$5.7 million R$7.0 million R$40.6 million 2%
Status: Under development ParkShoppingBarigüi is expanding for the second time as a result of the economic boom in Curitiba, Paraná, currently the city with the 4th highest GDP in Brazil. The expansion will satisfy a growing demand evidenced by a 17.5% increase in the shopping sales in the first 9 months of 2008 over the previous year. The shopping center‟s GLA will increase 8,639m2 with 83 new stores, of which 89% will be satellite stores. Multiplan announced and started its leasing process in September and due to its early success has leased nearly 50% of the units. Leasing has been so successful that the traditional launch party marketing was not even required. Future Projects
ParkShoppingBarigüi under development
With the announcement of ParkShoppingBarigüi Expansion II and the postponement of the ParkShopping Gourmet Expansion the list of future projects remained at four. Projects to be detailed Project BarraShopping Exp. VII DiamondMall Exp. II ¹ BarraShopping Sul Exp. I ParkShopping Gourmet Exp. Total
% 51.1% 100.0% 100.0% 60.0% 82.4%
GLA 14,176 m² 5,299 m² 21,638 m² 1,327 m² 42,440 m²
Own GLA 7,240 m² 5,299 m² 21,638 m² 796 m² 34,973 m²
Launch Jul/09 Jan/10 Apr/13 Mar/10
Opening Nov/10 Mar/11 Dec/14 Sep/11
¹ Multiplan will have 100% of participation during the construction, due to ground lease.
Real Estate Although Multiplan is known for having some of the best shopping centers in Brazil, it believes that by building real estate projects in strategic locations, adjacent to its malls, synergies are created. High quality office towers (i.e. Crystal Tower) guarantee a qualified flow of local employees that will use the shopping center for eating,
25
3Q08 Belo Horizonte • Brasília • Curitiba • Jundiaí • Maceió • Porto Alegre • Ribeirão Preto • Rio de Janeiro • São Caetano • São Paulo
leisure and shopping. Royal Green Peninsula is a higher class residential project, which also completes the mix use concept of the BarraShopping Complex. This complex located at Barra da Tijuca in Rio de Janeiro, already has an entertainment shopping center (New York City Center), one of the largest shopping centers in Brazil (BarraShopping) and Centro Empresarial Barra Shopping (Office Complex with 11 buildings), which has raised the consumer‟s quality of life, as one can live, work, shop and relax all in one location.
Cristal Tower Area
11,910 m2
Launch
June 2008
Opening
February 2011
Interest
100%
PSV (MTE %)
R$70.0 million
Total units
290
Units sold
58%
Status: Under Construction The construction of Cristal Tower is aligned with the company‟s strategy of developing mix-use projects - taking advantage from the synergy between shopping malls and commercial buildings. The project consists of a commercial tower with approximately 22,000 m2 of constructed area and 11,910 m2 of private units to be sold, attached to BarraShopping Sul, meeting the strong demand for commercial offices in the city. Multiplan‟s interest in the development will be 100% and the estimated nominal Potential Sales Value (PSV) is R$70 million. The project is already approved by the city of Porto Alegre. The opening is scheduled for the first half of 2011 and the project‟s unleveraged nominal internal rate of return is expected to be over 25% p.a.
Royal Green Península Area
26,389 m2
Launch
November 2005
Opening
November 2008
Interest
98%
PSV (MTE %)
R$70.7 million
Total units
93
Units sold
89%
Status: Under Construction Royal Green Península is another investment by Multiplan in the Peninsula area of Barra da Tijuca. This luxury condominium project consists of two buildings with 16 floors each and 93 apartments in total with areas ranging between 254 m2 and 338 m2. Launched in November 2005, it sold 80% of its units in its launch phase. Construction started in 2006 and the project delivery is scheduled for 2008.
26
3Q08 Belo Horizonte • Brasília • Curitiba • Jundiaí • Maceió • Porto Alegre • Ribeirão Preto • Rio de Janeiro • São Caetano • São Paulo
Land Bank
JundiaiShopping was announced, with available expansion area
While Multiplan did not announce any new land acquisitions during this quarter, only 40,500 m² of land was allocated for the new shopping center in Jundiaí, leaving the other 4,500m² of adjacent land in the land bank for future mixed-use projects.
Location Barra da Tijuca BarraShopping Sul Campo Grande Jundiaí Maceió MorumbiShopping ParkShoppingBarigüi ParkShoppingBarigüi RibeirãoShopping São Caetano Shopping AnáliaFranco Total
Owned % 100% 100% 50% 100% 50% 100% 84% 94% 100% 100% 36% 70%
Type Commercial Res., Hotel Residential Commercial Res., Com., Hotel Commercial Apart-Hotel Commercial Res., Com., Medical Commercial Residential
Area 36,748 m2 12,099 m2 338,913 m2 4,500 m2 130,000 m2 21,554 m2 843 m2 27,370 m2 200,970 m2 57,948 m2 29,800 m2 860,745 m²
27
3Q08 Belo Horizonte • Brasília • Curitiba • Jundiaí • Maceió • Porto Alegre • Ribeirão Preto • Rio de Janeiro • São Caetano • São Paulo
CURRENT PORTFOLIO 15
10
6
14
5
AL 1
2 DF
MG
7
SP 11
3 PR
DESTAQUES FINANCEIROS 8
9
12
13
Already Operating
Shopping
16
RS
State
4
Under Development/Approval
Multiplan %
Total GLA
Rent 3Q08
Operating SC's
Rent 3Q07
Sales 3Q08
(100%)
BHShopping RibeirãoShopping
MG SP
80.0% 76.2%
35,022 m² 39,188 m²
11,553 7,302
10,635 4,621
137,235 86,871
BarraShopping MorumbiShopping
RJ SP
51.1% 65.8%
69,775 m² 54,958 m²
25,723 23,515
23,184 20,350
242,283 216,411
ParkShopping DiamondMall
DF BH
60.0% 90.0%
39,775 m² 20,809 m²
8,600 6,438
7,391 5,369
129,997 70,547
New York City Center Shopping AnáliaFranco
RJ SP
50.0% 30.0%
22,068 m² 39,310 m²
2,528 10,247
2,532 9,433
33,132 103,858
ParkShoppingBarigüi Pátio Savassi
PR BH
84.0% 83.8%
41,409 m² 16,172 m²
6,626 3,809
6,207 1,987
102,374 54,678
Shopping SantaÚrsula BarraShoppingSul (BIG)
SP RS
37.5% 100.0%
24,043 m² 14,400 m²
1,453 7
7
26,294 -
64.0%
416,928 m²
107,801
91,716
1,203,680
Under development SC's/Exp BarraShoppingSul
RS
(% constr.) 100.0%
53,978 m²
Shopping VilaOlímpia Shopping Maceió
SP AL
42.0% 50.0%
29,936 m² 27,582 m²
LagoSul Shopping JundiaíShopping
DF SP
100.0% 100.0%
25,811 m² 34,575 m²
BHShopping Exp. Shopping AnáliaFranco Exp.
MG SP
80.0% 30.0%
10,869 m² 11,909 m²
RibeirãoShopping Exp. ParkShopping Exp. Fashion
SP DF
76.2% 60.0%
7,067 m² 2,985 m²
ParkShopping Exp. Frontal ParkShoppingBarigüi Exp. Gourmet
DF PR
62.5% 100.0%
8,571 m² 1,558 m²
ParkShoppingBarigüi Exp. II
SP
100.0%
8,639 m²
78.7%
223,481 m²
69.1%
640,409 m²
107,801
91,716
1,203,680
Sub-Total Operating SC's
Sub-Total Under development SC's/Exp Portfolio Total ¹ Relates to supermarket BIG, already operating on the land ² Interest during the construction period
28
3Q08 Belo Horizonte • Brasília • Curitiba • Jundiaí • Maceió • Porto Alegre • Ribeirão Preto • Rio de Janeiro • São Caetano • São Paulo
OWNERSHIP STRUCTURE The chart below shows Multiplan's ownership structure at October 31st 2008.
Free Float 22.50%
30.85% ON 25.01% Total
Maria Helena Kaminitz Peres 0.54% ON 0.44% Total
Multiplan Planejamento, Participações e Administração S.A. 77.50%
100.00%
47.23% ON 38.29%Total 1.88% ON
1.52% Total DESTAQUES 1.00% FINANCEIROS
Ontario Teachers’ Pension Plan
1700480 Ontario Inc. 19.43% ON 100.00% PN 34.70% Total
Jose Isaac Peres
Multiplan Administradora de Shopping Centers Ltda. Embraplan Empresa Brasileira de Planejamento Ltda.
2.00% SCP Royal Green
Renasce Rede Nacional de Shopping Centers Ltda.
99.00% Shopping Centers
100.00%
98.00%
99.00%
BarraShopping BarraShoppingSul * BHShopping DiamondMall JundiaíShopping ** LagoSul Shopping ** MorumbiShopping New York City Center ParkShopping ParkShoppingBarigüi Pátio Savassi RibeirãoShopping Shopping Anália Franco Shopping Vila Olímpia* Shopping Maceió ** Shopping Santa Úrsula
99.00%
CAA Corretagem e Consultoria Publicitária Ltda.
99.61%
CAA Corretagem Imobiliária Ltda.
% 51.10% 100.0% 80.00% 90.00% 100.00% 65.00% 65.80% 50.00% 60.00% 84.00% 83.80% 76.20% 30.00% 30.00% 50.00% 37.50%
* Under construction ** Under development
41.96%
100.00%
100.00%
100.00% 50.00%
50.00%
MPH Empreend. Imobiliários Ltda.
1
Solução Imobiliária Ltda.
Brazil Realty JPL Manati Empreendimentos
2
Haleiwa
3
¹ MPH Empreend. Imobiliários: Special Purpose Entity (SPE) from Shopping VilaOlímpia ² Manati Empreendimentos: Special Purpose Entity (SPE) from Shopping Santa Úrsula ³ Haleiwa: Special Purpose Entity (SPE) from Shopping Maceió
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3Q08 Belo Horizonte • Brasília • Curitiba • Jundiaí • Maceió • Porto Alegre • Ribeirão Preto • Rio de Janeiro • São Caetano • São Paulo
APPENDICES APPENDIX I Income Statement (R$ ’000)
3Q08
3Q07
Chg. %
9M08
9M07
Chg. %
Rent
67,994
55,572
▲22.4%
197,329
162,393
▲21.5%
Service Revenue
18,604
12,942
▲43.8%
51,608
35,931
▲43.6%
3,606
4,385
▼17.8%
17,087
13,811
▲23.7%
Parking Revenue
18,989
11,637
▲63.2%
46,492
25,385
▲83.1%
Real Estate Sales
2,268
8,545
▼73.5%
2,268
18,908
▼88.0%
Gross Revenue
111,461
93,081
▲19.7%
314,784
Key Money
Revenue Tax
DESTAQU
ES FINANCEIROS Operational Costs Net Revenue G&A Non-recurring expenses (IPO) Shopping Center Parking Cost of Real Estate Sold
(10,362)
(7,986)
▲29.8%
(28,687)
101,099
85,095
▲18.8%
286,097
(22,287)
(13,069)
▲70.5%
(61,260)
256,428 ▲22.8% (22,205)
▲29.2%
234,223 ▲22.1% (37,400)
▲63.8%
-
(35,683)
▼100.0%
-
(11,244)
(13,583)
▼17.2%
(38,816)
(37,044) ▼100.0% (32,834)
▲18.2%
(7,828)
(6,209)
▲26.1%
(20,928)
(13,687)
▲52.9%
(883)
(5,012)
▼82.4%
(884)
(10,981)
▼92.0%
Equity pickup
(1,640)
1,660
N/A
6,477
3,833
▲69.0%
Amortization
(31,337)
(30,022)
▲4.4%
(94,242)
(86,376)
▲9.1%
Financial Revenue
6,884
8,835
▼22.3%
31,987
Financial Expenses
(5,139)
(5,771)
▼11.3%
(22,517)
(17,655)
▲27.5%
Depreciation
(7,732)
(5,993)
▲29.0%
(23,564)
(16,449)
▲43.3%
222
53
▲316.1%
787
811
▼3.1%
20,115
(19,698)
N/A
63,137
(1,659)
N/A
Other Operating Revenue/Expenses Operational Income Non-Operating Income
11,899 ▲168.8%
(64)
0
▲100.0%
(60)
983
N/A
Income Before Taxes
20,051
(19,698)
N/A
63,077
(676)
N/A
Tax Income and Social Contribution
(4,086)
843
N/A
(5,579)
(838) ▲565.4%
Deferred Taxes
(6,359)
(6,412)
▼0.8%
(17,844)
(6,726) ▲165.3%
(201)
(81)
▲149.2%
(518)
(77) ▲572.7%
9,405
(25,348)
N/A
39,136
Adjusted EBITDA
57,375
48,937
▲17.2%
171,413
144,949 ▲18.3%
NOI
67,911
47,417
▲43.2%
184,077
141,257 ▲30.3%
Adjusted FFO
54,833
46,350
▲18.3%
174,786
131,552 ▲32.9%
Adjusted Income
47,101
40,357
▲16.7%
151,222
115,103 ▲31.4%
Participation of the minority stockholders Net Income
(8,317)
N/A
30
3Q08 Belo Horizonte • Brasília • Curitiba • Jundiaí • Maceió • Porto Alegre • Ribeirão Preto • Rio de Janeiro • São Caetano • São Paulo
APPENDIX II Balance Sheet ASSETS Current Assets Cash Accounts Receivable Diverse loans and advancings Taxes and contributions to recoup Deffered income tax Other Total Current Assets Long Term Assets Credit with related Parties Accounts Receivable Fixed assets to be sold Diverse loans and advancings Deffered income tax Other Total Long Term Assets Permanent Investiments Fixed Assets Intangible Deffered Assets Total Permanent Total Assets LIABILITIES Current Liabilities Loans and Financings Share Acquisition Accounts payable Obligations for acquisition of good Taxes and contributions to collect Tax payments Debt with Related Parties Advancings for customers Other Total Current Liabilities Long Term Liabilities Loans and Financings Obligations for acquisition of good Tax payments Provision for contingencies Total Long Term Expected Incomes Participation of the minority stockholders Stockholder's Equity Capital Stock Goodwill Reserves UTD Income Total Stockholder's Equity Total Liabilities and Stockholder's Equity
30/09/2008
31/06/2008
114,716 75,246 5,470 20,402 28,506 887 245,227
263,893 77,441 2,839 16,882 28,506 508 390,069
1,557 19,872 116,359 4,650 136,698 1,868 281,004
1,409 12,177 116,032 1,554 143,057 1,460 275,689
18,711 1,373,032 335,866 41,987 1,769,596
20,250 1,213,178 366,636 35,598 1,635,662
2,295,827
2,301,420
30/09/2008
31/06/2008
15,704 45,898 46,583 11,474 264 189 3,538 10,849 134,499
15,726 53,041 19,653 52,873 8,652 262 142 2,426 152,775
9,978 98,367 1,623 4,239 114,207 121,479 12,914
13,584 106,020 1,671 4,728 126,003 110,506 12,915
952,747 932,425 27,556 1,912,728
952,747 932,425 14,049 1,899,221
2,295,827
2,301,420
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3Q08 Belo Horizonte • Brasília • Curitiba • Jundiaí • Maceió • Porto Alegre • Ribeirão Preto • Rio de Janeiro • São Caetano • São Paulo
APPENDIX III Cash Flow Operational Cash Flow (R$ '000)
3Q08
3Q07
Net Income Adjustments Depreciation Amortization Equity pickup Minority parties interests Expected incomes appropriation Deferred Taxes Positive result of not previously recognized controlled parties and negative equity of controlled parties Adjusted Net Income Increase (decrease) in operational assets Increase in inventory Increase in accounts Receivable Increase (decrease) in taxes and contributions to recoup Increase in Deferred Taxes accounts Increase (decrease) in other assets Increase (decrease) in operational liabilities Increase in accounts payable Increase in obligations for acquisition of goods Increase (decrease) in taxes and contributions to collect Increase (decrease) in share acquisition Increase (decrease) in taxes parceled out Increase (decrease) in contingencies provision Increase in expected incomes Increase (decrease) in other obligations Increase in clients in advance Increase (decrease) dividends Operational Cash Flow Investments Cash Flow Increase (decrease) in diverse loans and advancings Increase (decrease) in credits receivable with related parties Interest receivable for diverse loans and advancings Addition in investments Addition in Fixed Assets Addition in Deferred Assets Addition in Intangible Assets Cash Flow generated by investments activities Financing Cash Flow Increase (decrease) in loans and financing Increase payments for diverse loans and advancings Decrease in credits payable with related parties Reduction in capital reserve Increase in capital Minority interest Cash Flow generated by financing activities Cash Flow Initial Cash Final Cash
9,405
(25,348)
7,732 31,337 1,640 (201) (3,606) 6,948
5,993 30,022 (1,660) (81) (4,385) 4,912
709 53,964
(199) 9,254
(327) (5,500) (3,520) (589) (787)
(1,115) (13,927) (1,373) 1,236 (570)
26,245 (13,943) 2,822 (53,041) (46) (489) 14,579 8,423 3,538 0 31,329
3,516 (12,641) 166 (42,331) (106) 783 15,556 1,969 340 (218) (39,461)
(5,675) (148) (52) (101) (167,587) (6,389) (567) (180,519)
38,204 1,192 (92) (109,320) (73,120) (3,702) (1,846) (148,684)
(7,479) 3,851 47 3,394 0 200 13 (149,177) 263,893 114,716
(38,398) 2,149 (855) 0 688,328 125 651,349 463,204 12,039 475,243
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3Q08 Belo Horizonte • Brasília • Curitiba • Jundiaí • Maceió • Porto Alegre • Ribeirão Preto • Rio de Janeiro • São Caetano • São Paulo
GLOSSARY AND ACRONYMS Adjusted EBITDA: EBITDA adjusted for the non-recurring expenses with the IPO and restructuring costs. Adjusted Funds from Operations (FFO): sum of adjusted net income, depreciation and amortization. Adjusted Net Income: net income adjusted for non-recurring expenses with the IPO, restructuring costs and amortization of goodwill from acquisitions and mergers (including deferred taxes). Anchor Stores: Large, well known stores with special marketing and structural features that can attract consumers, thus ensuring permanent attraction and uniform traffic in all areas of the mall. Stores must have more than 1,000 m² to be considered anchors.
DESTAQUES FINANCEIROS
Base Rent: The minimum rent of a tenant lease contract. If the tenant does not have a base rent, the minimum rent is a percentage of sales. Complementary Rent: The difference between the base rent and the rent consisting of a percentage of sales, as determined in the lease agreement. This amount is only paid if the percentage rent is higher than the base rent.
Acronyms: BHS BH Shopping BRS BarraShopping BSS BarraShopping Sul DMM DiamondMall JDS JundiaíShopping LGS LagoSul Shopping MAC Shopping Maceió MBS MorumbiShopping MTE Multiplan NYCC New York City Center PKB ParkShoppingBarigüi PKS ParkShopping PSS Shopping PátioSavassi RBS RibeirãoShopping SAF Shopping Anália Franco SSU Shopping Santa Úrsula SVO Shopping VilaOlímpia
EBITDA: Net income (loss) plus expenses with income tax and social contribution on net income, non-operating income, financial result, depreciation and amortization, minority interest and non-recurring expenses. EBITDA does not have a single definition, and this definition of EBITDA may not be comparable with the EBITDA used by other companies. Expected Income: Deferred key money and store buy back expenses. GCA: Gross Commercial Area, equivalent to the sum of all commercial areas in malls, in other words, GLA plus the stores sold. GLA: Gross Leasable Area, equivalent to the sum of all the areas available for lease in malls, excluding kiosks. Key Money (KM): Key money is the money paid by a tenant in order to have the right to be in a store. The key money contract when signed is accrued in the expected income account and accounts receivable, but its revenue is accrued in the key money revenue account in linear installments on the term of the leasing contract. Key money from initial leasing is contracts from new stores of greenfields or expansions (opened in the last 5 years); ‟Operating‟ key money from turnover are contracts from stores that are moving in a mall already in operations. Merchandising: Merchandising consists of all leases in a mall not involving the GLA area of the mall. Merchandise includes revenue from kiosks, stands, posters, leasing of pillar space, doors and escalators and other display locations in a mall. Net Operating Income (NOI): Refers to the sum of the operating income (rent revenue and shopping expenses) and income from parking operations (revenue and expenses). Revenue taxes are not considered. The NOI + KM also includes the key money from the contracts signed in the same period. Occupancy: Leased area divided by the total GLA of a mall. Own GLA: or Company's GLA or Multiplan GLA, refers to total GLA weighted by Multiplan‟s interest in each mall. Parking: Parking revenue is the total amount (100%) of revenue collected by the shopping centers. The parking expenses is the share of the parking revenue that needs to be passed to the companies partners and condominiums. Potential Sales Volume (PSV) or Total Sell Out: Refers to the total number of units for sale in a real estate development, multiplied by the list price of each. Sales: Sales declared by the stores in each of the malls. Same-Store Rent/m²: Rent earned from stores that were in operation for over a year. Same-Store Sales/m²: Sales of stores that were in operation for over a year. Satellite Stores: Small stores with no special marketing and structural features located around the anchor stores and intended for general retailing.
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3Q08 Belo Horizonte • Brasília • Curitiba • Jundiaí • Maceió • Porto Alegre • Ribeirão Preto • Rio de Janeiro • São Caetano • São Paulo
INVESTOR RELATIONS As part of the good relations that the company aims to develop with its investors, and with the objective of transparency, Multiplan invites you all to a conference call to discuss the Company‟s third quarter 2008 results.
Teleconference English November 13, 2008 12:15 p.m. (Brasília) 09:15 a.m. (EDT-NY) DESTAQUES Tel.: +1 (412) 858-4600 FINANCEIROS Code: MULTIPLAN Replay: 1 (412) 317-0088 Code: 424273#1
Portuguese November 13, 2008 11:00 a.m. (Brasília) 08:00 a.m. (EDT-NY) Tel.: +55 (11) 2188-0188 Replay: 55 (11) 2188-0188 Code: MULTIPLAN
If you still have questions or need further information after the event, Multiplan is entirely at your disposal for additional clarifications. Please contact: Armando d’Almeida Neto Vice-President and Investor Relations Officer Hans Christian Melchers Planning and Investor Relations Manager Rodrigo Tiraboschi Investor Relations Analyst Senior Tel.: +55 (21) 3031-5224 Fax: +55 (21) 3031-5322 E-mail:
[email protected]
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