General Shopping Brasil Analyst and Investor Meeting December 17, 2007
Aug 15, 2015
General Shopping Brasil
Analyst and Investor Meeting
December 17, 2007
Disclaimer
1
This presentation contains statements that are forward-looking within the meaning of Section 27A of the Securities Act of 1933 and Section 21E of the Securities Exchange Act of 1934. Such forward-looking statements are only predictions and are not guarantees of future performance. Investors are cautioned that any such forward-looking statements are and will be, as the case may be, subject to many risks, uncertainties and factors relating to the operations and business environments of General Shopping and its subsidiaries that may cause the actual results of the companies to be materially different from any future results expressed or implied in such forward-looking statements.
This material is published solely for informational purposes and is not to be construed as a solicitation or an offer to buy or sell any securities or related financial instruments and should not be treated as giving investment advice. It is not targeted to the specific investment objectives, financial situation or particular needs of any recipient. No representation or warranty, either express or implied, is provided in relation to the accuracy, completeness or reliability of the information contained herein. This material should not be regarded by recipients as a substitute for the exercise of their own judgment.
Any opinions expressed in this material are expressed as of this date and subject to change without notice and General Shopping is not under the obligation to update or keep current the information contained herein. General Shopping and the respective affiliates, directors, partners and employees accept no liability whatsoever for any loss or damage of any kind arising out of the use of all or any part of this material. You should consult with your own legal, regulatory, tax, business, investment, financial and accounting advisers to the extent that you deem it necessary, and make your own investment, hedging and trading decision (including decisions regarding the suitability of this transaction) based upon your own judgment and advice from such advisers as you deem necessary and not upon any views expressed in this material.
Agenda
Highlights
Sector Overview
Company Overview
Financial Highlights
2
Highlights
Growth through
Greenfield (GSB expertise track record)
Acquisitions (GSB market intelligence and complementary services adding)
Gross revenues up 37.9% to R$ 14.2 million in 3Q07Pro forma (as now) up 69.3% in 9M07
Adjusted EBITDA up 48.1% to R$ 8.6 million in 3Q07Pro forma (as now) up 76.8% in 9M07
3
Sector Overview
5
Positive Sector Outlook
281 294 303 317 326 335 346
2000 2001 2002 2003 2004 2005 2006
7.5 6.4 6.2
5.6 5.5 5.2 5.1 6.3 6.4 6.2 5.7 5.2 4.9
2000 2001 2002 2003 2004 2005 2006
125
203
135160 175 185 181
2 2 92 192 0 318 918 919 5
2000 2001 2002 2003 2004 2005 2006
23.0 25.3 27.931.6
36.640.0
44.0
2000 2001 2002 2003 2004 2005 2006
CAGR = 7.7%
Visitors permonth (million)
Revenue / average visitors per month (R$)
Revenues (R$ in billion) Operating Shopping Centers
Visitors per Month GLA
CAGR = 11.4% CAGR = 3.5%
CAGR = 6.6%
Source: ABRASCE
GLA(million m2)
Revenue / average GLA(R$ thousand / m2)
6
Low Sector Penetration
Revenues (% of Local Retail Market (1)) Vacancy Rate (2)
20%
70%
30%-35%
Brazil Europe USA
The Brazilian Shopping Center Sector Presents Ample Room for Growth
5.7%
4.0%4.4%
2.9%
7.4%
2.4%
1.2%1.7%
2003 2004 2005 2006
Secto r General Sho pping B rasil
Source: ABRASCE(1) Excludes car sales(2) Year end
7
Favorable Macroeconomics
Brazilian Shopping Center Industry Revenue (1)
Disposable Income vs. Interest Rates (2) Retail Sales Real Growth (2)
90%
100%
110%
120%
130%
2000 2001 2002 2003 2004 2005 2006 2007$400
$450
$500
$550
$600
$650
M ar-00 Jun-01 Aug-02 Nov-03 Jan-05 M ar-06 Jun-0712%
16%
20%
24%
28%
Sector Revenues Inflation Real(R$ bn) Growth (IPCA) GDP Growth
2000 23.0 - 6.0% 4.3%2001 25.3 10.0% 7.7% 1.3%2002 27.9 10.3% 12.5% 2.7%2003 31.6 13.3% 9.3% 1.2%2004 36.6 15.8% 7.6% 5.7%2005 40.0 9.3% 5.7% 2.9%2006 44.0 10.0% 3.1% 3.7%
Selic Disposable Income
Disposable Income(R$ billion)
Selic(% p.a.)
(1) Source: ABRASCE(2) Source: IBGE
8
Retail Sector Growth in September/07
Activities Jan-Sept 12 monthsSupermarkets and hypermarkets 7.2 7.7
Fabrics, clothing and footwear 10.5 7.2
Pharmaceutical, medical, orthopedic and cosmeticsproducts
7.9 6.4
Office supplies and equipment, personal computers andtelecom
25.2 23.8
Books, newspapers, magazines and stationery 7.5 5.2
Other personal and domestic products 23.3 22.2
Vehicles, motorcycles and autoparts 23.4 19.5
Accumulated (%)
Furniture and white/durable goods 16.7 15.6
Source: GSB and IDV
9
@ IPO:207.0
@ IPO:238.9
@ IPO:117.1
@ IPO:119.0
257.9
372.6
207.9
161.3
317.0
BRMalls Multiplan Iguatemi GeneralShopping
Brasil
Own GLA (1) (m2 in thousand) Market Share (2) (% of Total GLA)
31.5%
68.5%
The industry is highly fragmented: the largest groups operate only 18.3% of the existing Shopping Centers and 31.5% of the total GLA in the country
9 Largest Companies+ Acquisitions
(1) Source: Companies’ website (2) Source: Valor Análise Setorial – December/06
Fragmented Sector
Company Overview
11
Majority ownership: 85.9% average
11 shopping centers and 4 greenfields
Total GLA: 187,784 m2
Own GLA: 161,343 m2
Complementary services activities
9M07 financial highlights
– Gross revenue: 23.0%
– Adjusted EBITDA: 26.8%
– EBITDA margin: 73.2%
Focus on serving the B and C consumption classes
These classes represent approximately
66% of the total consumption in Brazil
Shopping Center Own GLA
Internacional Shopping 100.0% 72,958 72,958Santana Parque Shopping 50.0% 26,538 13,269
Shopping do Vale 84.4% 16,487 13,913Shopping Light 50.1% 14,140 7,092Suzano Shopping 100.0% 13,120 13,120Auto Shopping 100.0% 11,477 11,477Americanas Prudente 100.0% 10,276 10,276Cascavel JL Shopping 85.5% 8,877 7,590Top Center 100.0% 6,166 6,166Poli Shopping 50.0% 4,527 2,264Americanas Osasco 100.0% 3,218 3,218
85.9% 187,784 161,343
Itupeva Project 50.0% 17,357 8,679
Barueri Project 96.0% 25,000 24,000
Sulacap 90.0% 32,000 28,800
Convention Center 100.0% 25,730 25,730
Greenfield
Interest
87.1% 100,087 87,209(1) Gross leasable area(2) Considering additional call of 20.0% stake
General Shopping Brasil at-a-Glance
Own GLAInterest
Total GLA
Total GLA
One of the largest companies in the Brazilian Shopping Center industry in terms of own GLA (1)
Competitive Advantages
12
Majority ownership interest
Close relationship with store owners and retail intelligence
Well defined growth strategy
Diversified portfolio comprised of high quality assets
Innovative malls and services
Experienced management team Average 14 years of experience in shopping
center/retail sector
13
Majority Ownership InterestShopping Centers / Stake Held
General Shopping Brasil is the key decision-maker of the strategies and policies of its shopping centers
Redevelopment and remodeling
the shopping centers
Provide complementary
services
Flexibility in establishing partnerships
Redevelopment and remodeling
of the tenant mix
InternacionalShoppingGuarulhos
AutoShopping
100%
SantanaParque
Shopping (1)
ShoppingLight
SuzanoShopping
PoliShopping
Cascavel JL Shopping
Shopping AmericanasPresidentePrudente
Shopping Americanas
Osasco
Top Center Shopping São Paulo
Shopping do Vale
50% 50.0% 50.1% 100%
85.5% 100% 100% 100% 84.4%
100%
Expansion of the existing shopping
malls
Retail Intelligence and Relationship with Store Owners
14
Understanding of the shopping center business through both the retail and the real estate approach
Quantitative and qualitative market surveys
Internal surveys
Market surveys
With retailers
Credibility to retain and attract the main retailers
Focus on improving store performance increasing revenuesfrom rent
Expansion and greenfied projects on demand
Diversified Growth Strategy
15
CONSOLIDATIONAcquisition of shopping centers
GREENFIELDSConception and development of new shopping centers
EXPANSIONIncrease ownership interest in assetsGLA expansion in the existing portfolioImplementation of mixed-use projects Synergies + Profitability
TURN AROUNDControl of the tenant mixInnovation in complementary services
16
Poli Shopping
80’s
Poli Shopping
90’s
InternacionalShopping Guarulhos
InternacionalShopping Guarulhos
Auto Shopping
2006
After IPO
Auto Shopping
Santana ParqueShopping
Suzano Shopping
Shopping Light
Cascavel JL Shopping
InternacionalShopping Guarulhos Shopping Light
Acquisition of several shopping centers: Suzano Shopping, Cascavel JL Shopping, Shopping Americanas Presidente Prudente, Shopping Americanas Osasco, Top Center Shopping, Shopping do Vale
Sulacap Shopping, Shopping Barueri and Shopping Center in Itupeva - greenfieldprojects
Convention center – mixed use
Opening of Santana Parque Shopping
Planned expansions: Suzano Shopping, Cascavel JL Shopping, Top Shopping, Internacional Shopping, Poli Shopping
Several other projects under analysisIPOJul/07
Solid and Proven Historical Growth
17
Portfolio
18
SP
Total GLA (m2)No. of storesVisitors/year (mm)
11,47780
ND
9
8
10,27656
4.0
15
17,357NANA
(1)
13,1201709.0
6 13
25,000 NA NA
(1)
2
6,16655
4.0
72,958292
23.5
1
14,140134
12.0
7
12
25,730NANA
4
3,21819
1.5
5
26,538176ND
4,52752
6.0
3
Dominant Player in São Paulo
(1) Estimated
Total GLA (m2)No. of storesVisitors/year (mm)
Total GLA (m2)No. of storesVisitors/year (mm)
Total GLA (m2)No. of storesVisitors/year (mm)
Total GLA (m2)No. of storesVisitors/year (mm)
Total GLA (m2)No. of storesVisitors/year (mm)
Total GLA (m2)No. of storesVisitors/year (mm)
Total GLA (m2)No. of storesVisitors/year (mm)
Total GLA (m2)No. of storesVisitors/year (mm)
Total GLA (m2)No. of storesVisitors/year (mm)
Total GLA (m2)No. of storesVisitors/year (mm)
Total GLA (m2)No. of storesVisitors/year (mm)
RS
19
RJ
Shopping centers in operation1. Internacional Shopping2. Top Center3. Poli Shopping4. Americanas Osasco5. Santana Parque6. Suzano Shopping7. Shopping Light8. Americanas P. Prudente9. Auto Shopping10. Shopping do Vale11. Cascavel JL Shopping
Greenfields12. Convention Center13. Barueri Shopping14. Sulacap Shopping15. Shopping in Itupeva
32,000165n.a.
(1)
(1)
14
10
16,48794
2.0
(1) Estimated
Focus on the Southeastern and Southern Regions
PR 11
8,87780
3.4
Total GLA (m2)No. of storesVisitors/year (mm)
Total GLA (m2)No. of storesVisitors/year (mm)
Total GLA (m2)No. of storesVisitors/year (mm)
20
Services currently provided to the mall
Service rendering potential/on implementation
Parking
Water
Energy
Management
Increasing Complementary Services Activities
Complementary Services Activities
Complementary services activities present high margins, strong growth potential and diversify the Company’s revenues
ISG Auto Poli Light Santana Suzano CascavelAmeric.
Pres.Prudente
Americ.Osasco Do ValeTop
Center
*
* Partial
21
Experienced Management Team
Fully-Integrated Team
VictorVeronezi
Identification of attractive
opportunities
Planning and Expansion
Director
AlexandreDias
Analyses of retail demand and market
potential
Marketing and Retail Relations
Director
WaldemarJezler
Strategic planning
CEO
RicardoCastro
Feasibility studies and financial
planning
CFO
AlessandroVeronezi
Communication of value creation to
shareholders
Investor Relations Director
Experience in the shopping center / retail sector (years)
(1) Mr. Ricardo Castro has 13 years of experience in banking and M&A
24 14 15 1 (1) 15
Financial Performance
Gross Revenue (R$ 000)
23
53,316
38,720
31,491
10,260 14,153
3Q06 3Q07 9M 06 9M 07 9M 07PRO-FORMA
37.9%
69.3%
Adjusted EBITDA (R$ 000) and EBITDA Margin
24
5,816
33,920
8,615
19,189
24,325
73.2%
64.6%
3Q06 3Q07 9M06 9M07 9M07
48.1%
76.8%
PRO-FORMA
69.3%70.7%
Net Income (R$ 000)
25
16,233
9,614
415
(4,660)
3,730
3Q06 3Q07 9M 06 9M 07 9M 073,8
11%
PRO-FORMA
Gross Revenue Breakdown
9M07 Revenue Breakdown
RENTALS
SERVICES
Rent
Energy
Water
3Q07 Revenue Breakdown
Transfer Fee
Mall &Merchadising
Parking
Shopping CenterManagement
26
91%
4%5%
58%
1%5%
36%
91%
5%4%
59%
36%
4% 1%
7,503 8,369
22,56624,438
3Q06 3Q07 9M06 9M07
11.5% 8.3%
Revenue from Rentals (R$ 000)
Revenue from Rentals (Same GLA Rent)
27
Financial Performance/M2
119.6 118.8
367.9 361.4
3T06 3T07 9M06 9M07
87.7 90.6
287.5 284.9
3T06 3T07 9M06 9M07
77.3 84.0
255.1 264.5
3T06 3T07 9M06 9M07
Net Revenue NOI
Adjusted EBITDA Adjusted Net Income
-62,0
36.4
5.5
104.5
3T06 3T07 9M06 9M07
28
36.5
18.4
78.7
22.0
10.9
2007 2008 2009 2010 After 2010
Indebtedness
Amortization Schedule (R$ million)Term
R$ 166.5 million
29
28%
72%
Short term Long term
Cash (R$ million)
Total Cash: R$ 193.9 million
30
29.1
164.8
Debt amortization Net cash
Greenfield Case – Santana Parque Shopping
31
Search for property according to internal survey pointing supplyshortage in the region
Quantitative and qualitative market surveys on project
Surveys with main anchor tenants through internal and crossed data banks
MOU’s with anchors
Acquisition proposal – Higher bid than the competitors’ based on project’s potential and risk mitigation
Opened in October 25, 2007
Successful occupancy levels (97% leased of total GLA) and sales (30% higher than retailers’ expectations) at opening
Suzano has 290,000 inhabitants and annual population growthof 3.45%, above the state of São Paulo’s average growth, andqualified demand of approximately R$ 370 million/year
Suzano Shopping serves also the neighboring cities, such as Itaquaquecetuba, Poá and Ferraz de Vasconcelos, and it is theonly shopping center in the region
Located beside the region’s largest supermarket
Tenant mix is currently based on few anchor tenants, but it has potential for expansion of its GLA by over 50%, increasingthe flow of visitors and turning the mall into a regional shopping center
Potential for all complementary services adding revenues
Acquisition/Expansion Case – Suzano Shopping
32
Acquisition/Turn Around Case – Shopping Light
The only shopping center located in downtown São Paulo, above the Anhangabaú subway station, which has 63,000 users a day.
Demand potential above R$ 540 million a year
Public comprised of B and C consumer segments (82%), GSB’s target markets
Vacancy rate of approximately 25% at the time of acquisition byGSB due to market gap
GSB is addressing the large vacant area of this shopping center by improving the store mix, increasing the retail supply with greater sales potential, filling the vacant areas or replacing the existing ones (retail category management) and adding services to tenant mix
Potential for all complementary services adding revenues
33
Area chosen according to survey pointing supply shortage
60,000 square meter lot of land located in privileged area, without shopping malls in primary and secondary areas
Over 500 thousand inhabitants, mostly from the B anc C consumer segments (79% of total)
Demand in the neighboring area is R$ 1.9 billion per year
At the opening, the shopping center will have GLA ofapproximately 32,000 m² and a mix comprised of 165 stores
Power center with supermarket Carrefour and Home CenterC&C, both successful operations at the location
Shopping center has area for future expansion and mixed use, as it is located in area with potential for strong populationgrowth
Greenfield Case - Sulacap
34
Key Takeaways
Market‐driven company with retail approach
B and C consumption classes as target market
Innovative complementary services
Innovative shopping center operations and themes
35
Contacts
GSB INVESTOR RELATIONS
Alessandro Poli VeroneziInvestor Relations Director
Marcio SniokaInvestor Relations Manager
55 11 3159-5100
www.generalshopping.com.br