2. Disclaimer
The material that follows is a presentation of general background information about MRV Engenharia e Participações S.A. and its subsidiaries (collectively, “MRV” or the “Company”) as of
the date of the presentation. It is information in summary form and does not purport to be complete. No representation or warranty, express or implied, is made concerning, and no
reliance should be placed on, the accuracy, fairness, or completeness of this information.
This presentation may contain certain forward-looking statements and information relating to MRV that reflect the current views and/or expectations of the Company and its
management with respect to its performance, business and future events. Forward looking statements include, without limitation, any statement that may predict, forecast, indicate or
imply future results, performance or achievements, and may contain words like “believe,” “anticipate,” “expect,” “envisages,” “will likely result,” or any other words or phrases of similar
meaning. Such statements are subject to a number of risks, uncertainties and assumptions. We caution you that a number of important factors could cause actual results to differ
materially from the plans, objectives, expectations, estimates and intentions expressed in this presentation. In no event, neither the Company nor any of its affiliates, directors, officers,
agents or employees shall be liable before any third party (including investors) for any investment or business decision made or action taken in reliance on the information and statements
contained in this presentation or for any consequential, special or similar damages.
This presentation does not constitute an offer, or invitation, or solicitation of an offer to purchase any securities. Neither this presentation nor anything contained herein shall form the
basis of any contract or commitment whatsoever.
The market and competitive position data, including market forecasts, used throughout this presentation was obtained from internal surveys, market research, publicly available
information and industry publications. Although we have no reason to believe that any of this information or these reports are inaccurate in any material respect, we have not
independently verified the competitive position, market share, market size, market growth or other data provided by third parties or by industry or other publications. MRV does not
make any representation as to the accuracy of such information.
This presentation and its contents are proprietary information and may not be reproduced or otherwise disseminated in whole or in part without MRV’s prior written consent.
2
3. 3
MRV at a glance
Leading homebuilder in Latin America with over 354,000 units sold
38 years of history with presence in all Brazilian key markets
National footprint: presence in 148 cities and 22 states in Brazil
MRV is listed under “Novo Mercado”, the highest corporate governance level
MRVE3 is part of 15 Brazilian stock indexes (B3)
Market cap of R$ 6,5 billion (US$ 2.1 billon*)
MRVE3 average trading volume at B3: R$ 49 million (2Q17)
The most liquid ADTV among Brazilian homebuilders
Standardized operation aiming high efficient and productivity
5 years of recurrent cash generation
Continuous innovation to support sustainable and profitable growth
Over 22 thousand employees across the country
* (09/15/2017: US$ 1 = R$ 3.1252)
4. Strong Corporate Governance
• Risk and Compliance
• Governance, Ethics and Sustainability
• Human Resources
• Commercial and Credit
• Real Estate Financing
• Production
• Communication
• Legal
• Founder and controlling shareholder with a long term vision
• Growth and sustainability interests are aligned with minority shareholders
MRV is listed under “Novo Mercado”, the highest corporate governance level
Benchmark in Sustainability: only homebuilder included in B3 Sustainability Index (ISE)
Board of Directors composed by 7 members (4 independents)
Executives interests in line with our shareholders through long term Stock Option Plan
Free float represents 64% of shareholder’s equity
Communication Chanel:
• Shareholders' recommendations:
assembleia@mrv.com.br
• Confidential Channel:
https://canalconfidencial.com.br/mrv/
58.6%
• Other
Shareholders
33.6%
• Rubens
Menin T. de
Souza
5.1%
• Prudential
Plc.
2.1%
• Executives
and Board
Members
0.6%
• Treasury
shares
EXECUTIVE COMMITTEES
Shareholders Structure
4
5. NET SALES
CAGR 2008 - 2016
NET REVENUE
CAGR 2008 - 2016
Source: Companies' Financial reports.
Brazilian peers: Gafisa, Tenda, Rossi, Tecnisa, Cyrela, Even, Ezetc, Direcional, Helbor, Rodobens
Expressive sales and net revenue growth
5
6. Leadership in the low income segment
Market share
Geographic diversification provide us a
unique position compared to our peers
MRV is the main low income homebuilder in Brazil
1 out of 200 Brazilians is a MRV client
National footprint provide us more capillarity and
protection from local economy activity downside
6
Launches - LTM
(R$ million)
Sales – LTM
(R$ million)
Total: R$ 7,186 milion Total: R$ 6,272 million
Source: ER from companies
7. NET REVENUE (R$ million)
* Analysts’ average consensus.
CAGR 2007-2016:
30.6%
NET INCOME (R$ million)
With significant progress year over year
7
CAGR 2007-2016:
33.0%
Market consensus: growth in mid term and 16%
stock price potential upside
Recommendation: Buy (8 banks), Neutral (2 banks)
MRVE3 Average Target Price: R$ 16.89
MRVE3 as of 09/15/2017: R$ 14.54
Potential
upside
16%
Best ROE in the sector, with greater potential to increase
shareholders return.
ROE x P/BV
MRVE3 is the most valuable stock in the low income segment
Shareholders return through dividends and stock repurchase
R$ 1,345 million in dividends pay out since the IPO (2007)
R$ 365 million in shares buyback program (11% of existing shares)
9. Our structure is ready to absorb 50k units/year
Quality in execution and cost efficiency
G&A / Net Revenue
Enhancement of productivity indexes and faster asset turnover
+ Asset turnover
+ Standardization
+ Productivity
– Overhead structure
– Cost discrepancy
PI x PS Evolution
Brickworks + Molds
Aluminum
molds
Construction Methods Evolution (# units)
2014 2015 2016 2017
56%33%6%2%
9
Since 2015, the Company
began to adjust its
overhead structure to
absorb greater volume of
launches, which will dilute
even more the expenses.
PI Benchmark
3.2
PS Benchmark
8%
enhancement
Gross margin %
Improvement in execution
capacity, productivity and
reducing cost discrepancy.
10. 10
5th year of recurrent Cash Generation totaling R$ 2.6 billion MRV keep investing in landbank in order to sustain its
organic growth
Lanbank (R$ billion)
The Company's growth has been based on financial efficiency and profitability.
MRV is capable to continuous generate cash, invest in landbank and provide return to the shareholders,
maintaining the company’s healthy capital structure – low leverage and high cash position.
Highest credit corporate rating in the sector (brAA-) by Fitch and Standard & Poor´s.
Solid cash position & low leverage
Cash position x Leverage
(R$ billion)
11. Solid demand in the long term and fund availability
Brazilian housing demand supply
Brazilian housing demand (accumulated)
(in million units)
Source: Preliminary data from “Estudo Demanda Futura, UFF, 2016”, “Secretaria Nacional de Habitação” and “Ministério das Cidades” 11
In the next 20 years the
market needs to delivery
~30 million houses to
meet the total demand.
The Company
sustainable growth will
significantly contribute to
it.
FGTS Budget from 2017 to 2020:
R$ 100 billion to finance low income housing or 800,000
units
FGTS Net collection
(R$ billion)
Positive view from macroeconomic recovery
Source: FGTS Multiannual budget, Bacen
With the economy recovery (jobs creation and GDP growth)
the FGTS fund is going to improve even more its capacity to
provide mortgages.
FGTS balance sheet remains robust (AUM R$ 505 bi),
reaffirming its sustainability on financing the housing
market.
Supported by FGTS (Severance Pay Fund for workers)
The main source of funding for low income housing
12. Housing Program: FGTS + MCMV (Minha Casa Minha Vida)
12
HOUSING PROGRAM BENEFITS
Political dividends
GPD formation
Jobs creation
Positive Fiscal Balance = 3.3%
4.0%
Real Estate
Income
Taxes
0.7%
Subsidies
MCMV
Fiscal
Balance is
positive
3.3%
Housing Program
in Brazil
FGTS
(contribution from
companies)
MCMV
(Subsidies from
government)
SBPE
(savings deposits)
Low income Mid/high income
The main source
of loans
AUM R$ 505 bi
R$ 246 billion in
mortgages
The main source of
subsidies to clients
Budget = R$ 2billions
Up to R$ 47,500/unit
• The main source of
loans
• AUM R$ 626 bi
• Units above R$ 240
thousand
Typical MRV Client has 7% subsidy
MRV
0.7% from treasury
6.3% from FGTS
13. The expansion plan aims to increase market share in
larger cities where is concentrated the high demand
for affordable houses in Brazil.
Landbank is ready to support the company growth.
From 2014 landbank in larger cities has increased by
80%
Geographic diversification
Expansion plan
# of cities
From 2007 to 2013
Strategy to increase
diversification
13
From 2014 to 1H17
Strategy to increase
market share in
larger cities
Landbank position ('000 units)
CAGR: 5.0%
Market deterioration contributed to buy
well located plot of lands with better prices
Land
acquisition
with 31%
discount
14. More dispersion
among the “stores”
More launches
More units
available
More sales volume
Potential for Growth: inventory level and location
14
SãoJosédoRioPreto
Population:446,649
Average sales/month: 126
Average inventory: 1,334
Average sales/month : 99
Average inventory : 1,256
Average sales/month : 110
Average inventory : 1,457
2015 2016 2017
Goiânia
(metropolitanregion)
Population:2,458,504
The inventory level and location impacts directly in sales volume
Average sales/month : 27
Average inventory : 572
Average sales/month : 45
Average inventory : 1,219
Average sales/month : 128
Average inventory : 1,652
15. 15
Unified
management of
landbank
MRV LANDBANKS
Simulation of
viability for landbank
acquisition
MRV Landbank Software
Visual register of landbank
Monitoring of efficiency of the
buyers
$ 90.000,00
Edit Landbank SAVE
MAP GENERAL DATA SELLER DATA
Landbank Simulations
BOUGHT
Name of the Landbank 1
5,000 sq.m.
APPROVING
Technical Viability 1
Gross Margin MRV Cost
$ 140,000,000 $90,000,000
Average selling price Average Selling Price
$ 140,000,000 $ 140,000,000
João da Silva 09/06/2016
REJECTED
Technical Vianility 1
+
16. Leonardo Corrêa
Chief Financial and Investor Relations Officer
Ricardo Paixão
Investor Relations and Financial Planning Officer
Matheus Torga
Investor Relations Manager
Phone: (+55 31) 3615-8153
E-mail: ri@mrv.com.br
This presentation is also available on our website:
ri.mrv.com.br
Contacts
16
18. 38 years of history
3,000 units per year 25,000 units per year 40,000 units per year
ADRs Level1
MRV
Foundation
Beginning of
relationship
Start of
Geographic
Diversification
Enactment of
Foreclosure /
Deed of Trust
by Financial
Institucions
Banks Resume
Mortgage
Lending
Private Equity
IPO
1st Negotiation
Correspondant
Equity Follow-On
MCMV 1
MCMV 2
MCMV 3
18
20. 20
Business Model – Focus on low income
Real Estate –Low Income
Real Estate - Medium/ High
Income
Purchasing Rational Instalments lower than rent -
Purchasing Reason Necessity (1st real estate) Upgrade
Funding Abundant and unchanged rates
(FGTS)
Scarce and recent increase of
rates (Saving Accounts)
Product Standardized Exclusive
Financing Transference During construction phase After key-delivery
Cash Flow Receiving in accordance with the
construction evolution
Financing Provision at the end
of construction period
Price In line with the inflation ~4x bigger than inflation
21. Source : BO MRV –Mortgage Lending 06/09/2016.
1) Minimum Wage 2017: R$ 937.00
Search of the first real estate for family formation
77% of the clients are single/ engaged
Income range: 61% have an income of up to R$ 2,700
Young clients: 50% are up to 30 years old
LTV of 75%
21
Client Profile
Low Income
What our clients are looking for?
Medium/High Income
Couples
56% are single and 52% have children
The monthly medium income is R$ 8,390, being that 41% earn
more than R$ 10 thousand
Medium LTV of 62%
Source: Inteligência de Mercado Lopes 2015, ACEBIP and BACEN.
What the clients are looking for?
Purchase Motivation
Location
Playground area
Marriage
* Data from March 2015
22. 22Source: Low income Real Estate: MRV Medium Price, in 2017 price was adjusted with inflation
Real Estate Medium/ High Income: Variation FIPE Zap (in 2017, decrease of real price of the units)
Economic Segment: focus on the acquisition of the 1st real estate, where there is no speculation and exists huge housing deficit.
Appreciation in line with the inflation and low cost financing produces a significant reduction of LTV’s (inflation higher than TR).
Evolution of Real Estate Prices
The evolution of low income real estate prices has less volatility and more consistency than the medium/high income, preventing
the creation of a housing bubble.
Low offer and high demand of low income real estate
MCMV Conditions:
Limited income and sales price
Sales of 1 real estate per Individual Taxpayer Registration Number
Impossibility of resale a unit under the MCMV
24. Funding – FGTS and SBPE
Housing in Brazil: 70 years of investment in housing programs
Source: Biblioteca Digital da FGV, EESC –USP, FGTS
• 1930: Real Estate credit
offer by the Caixas
Econômicas
• 1946: Creation of Casa
Popular Fundation – First
national housing policy
• 1964: Creation of SFH and
BNH – with compulsory
collection of 1% of
monthly payment
• 1967: Creation of FGTS –
collection of 8% of
monthly payment
• 1986: Extinction of BNH
due to financial
difficulties in the
inflationary period and
increasing FGTS’
withdrawals
• 1990: Collor creates the
Plano de Ação Imediata
para a Habitação (PAIH),
which antecipated the
construction, in an
emergencial manner, of
245 thousand houses
• 2000: FHC establishes the Carta de
Crédito Individual e Associativa in
FGTS and the continuity of projects
such as Pró-Moradia and Habitar
Brasil.
• 2004: Política Nacional de Habitação
(Lei 10.931) - Social Subsidy Interest
Housing Program
• 2009: Creation of MCMV – The
biggest housing program in the
country
• Investment: R$ 294 billion
• 10 million brazilians benefited
• Maximum income of R$ 6,500
Funding – governamental
contributions
• 92% OF THE RESOURCES INTENDED FOR THE POPULATION WITH INCOME ABOVE 5
MINIMUM WAGES - 80% OF POPULATION RECEIVE BELOW THIS
• ONLY 33.5% OF THE FINANCED UNITS WERE INTENDED FOR POPULAR SECTORS
Financed units
24
R$ 7.76 BI
FGTS DISCOUNT
R$ 52.8 BI
FGTS DISCOUNT
R$ 10.11 BI
OGU DISCOUNT
120,000
1,263,500
2,864,500
857,000
1,355,000
454,000
3,318,508
4,914,288
1930 - 1946 1964 - 1975 1976 - 1982 1983 - 1986 1987 - 1992 1993 - 1997 1998 - 2008 2009 - 2017
Data 2017 up to 05/31/2017
25. SFH - Brazilian Housing Finance System
The source cames from
employers depositing 8%
of the monthly salary of
all workers
(Nov/16)
Source: Caixa
Total
Balance of
R$ 502
billion
Borrowers can use the account
balance in few cases:
Mortgage
Termination of work
Retirement
Others
12%
66%
14%
8%
Mortgage Interest
Rate from 5% to
9.16% a.a + TR
Units up to:
R$ 300,000
SBPE
Deposits made on the
savings of commercial banks
Real Estate Credit
Legal Reserves
Free Resources
65%
30%
5%
SBPE Resources
Market Rate
Interest Rate from
9.2% 1 to 11% +TR
Units of R$300,000 to
R$950,000*
Borrowers can go to any bank and
apply for a real estate loan
according to their credit rating
Interest Rate from 12.25 2 % +TR
Units above:
R$950,000Notes:
1) If the client has a salary account in CEF the interest rate can reach 9.75%. In BB it can reach 9.65%+TR.
2) If the client has a salary account in the bank, the interest rate can reach 10.7%+TR.
3) 20% for compulsory deposit (remunerated by SELIC) and 10% for additional compulsory (corrected by TR)
* States of DF, MG, RJ, SP: R$ 950,000; other states: R$ 750,000.
Workers are
remunerated 3%
per year+TR
25
FGTS (Severance Pay Fund) - The main source of fund for MRV
26. FGTS
¹ Source up to 2011: PME Unemployment rate and source from 2012: PNAD due to its better sensibility and comprehensiveness.
From 2017 to 2020 the FGTS budget is R$ 100 billion to be invested in Housing.
Obs: In 2007, retirement withdrawals increased significantly due to the spontaneous
retirement approval by Federal Supreme Court, reducing the net collection in the period.
Source: IBGE, CAGED e FGTS – April/17
Withdrawals (R$ billion)
Budget (R$ billion)
26
Net Collection (billion)
R$ 29 R$ 38 R$ 42 R$ 47 R$ 49 R$ 57 R$ 65 R$ 76 R$86 R$ 99 R$ 108 R$ 63
Breakdown 2017 2018 2019 2020
Housing 71.7 63.5 63.5 63.5
Basic Sanitation 7.0 9.5 9.75 9.75
Infrastructure 9.0 8.0 8.0 7.0
Others 0.5 0.5 0.5 0.5
TOTAL 88.2 81.5 81.75 80.75
27. Minha Casa Minha Vida – Housing Program
84% das vendas MRV são
realizadas pelo sistema
PRICE*
2
APRIL/09 TO DEC/10 JAN/11 TO DEC/14
¹ Included 350,000 units added on September 2014.
² Amounts refers to the units to be built in 2016
³ MCMV 1 and 2: Amounts referring to each program.
⁴ Details not yet released
2017-2018JAN/15 TO JAN/17
27
Program Resources (R$ billion)
Units to be built
Monthly Income Income Units Income Interest Rate Units Income Interest rate Units² Income Interest rate Units²
Group 1 Up to R$ 1,325 482,741 Up to R$ 1,600 4% + TR 1,226,605 Up to R$ 1,800 TR 53,748 Up to R$ 1,800 TR 170,000
Group 1.5 - - - - - Up to R$ 2,350 5% + TR Up to R$ 2,600 5% + TR 80,000
Up to R$ 2,455 5% + TR Up to R$ 2,350 5.5% + TR Up to R$ 2,600 5.5% + TR
Up to R$ 2,790 Up to R$ 3,275 6% + TR Up to R$ 2,700 6% + TR Up to R$ 3,000 6% + TR
Up to R$ 3,600 7% + TR Up to R$ 4,000 7% + TR
Group 3 Up to R$ 4,650 146,623 Up to R$ 5,000 7.16% + TR 307,054 Up to R$ 6,500 8.16% + TR 113,930 Up to R$ 7,000 8.16% + TR 200,000
Group 3 Plus Up to R$ 9,000 9.16% + TR Not available
Target (Term)
2 years 5 years 2 years
R$ 34 R$ 72.6 R$ 41,2
1,000,000 3,100,000 ¹
R$ 41,2
1 year
2,000,000
Group 2 375,764 1,216,341 800,000
dec-2010 dec-2015 dec-2018
645,692
jan/17
28. Minha Casa Minha Vida: Subsidies and Units Price
SUBSIDIES
28
The Group 1 subsidy is financed with treasury resources.
2
GROUP1.5GROUPS2AND3GROUP3PLUS
UNITS PRICE
29. Down payment
3% Mortgage
with MRV
15%
Subsidies
7%
Mortgage with Banks
(CEF and BB)
75%
Payment Breakdown: Typical MRV Client
MCMV Group 2
Unit Price: R$ 150,000
• FGTS balance
• Savings Account
10% before keys delivery
5% after keys delivery
WHERE DOES THE SUBSIDIES COME FROM?
0.7% from OGU (National General Budget)
6.3% from FGTS
Revenue Taxes per unit sold is 4%
4.0%
Real Estate
Income
Taxes
0.7%
Subsidies
MCMV
Fiscal
Balance is
positive
3.3%
Typical MRV Client: Payment Breakdown
The above tax does not include other indirect taxes
such as VAT, Social securities and others.
29
30. MRV on MCMV – Potential for expansion in the next years
0%
0%
0%
0%
0%
5.4%
18.9%
34.7%
0%
13.6%
5.3%
4.4%24.1%
28.2%
32.6%
10.1%
24.3%
15.7%
66.9%
25.8%
43.1%
62.8%
43.1%
37.4%
37.5%
20%
49%
43.3%
Capitals Secondary Cities
Average
11.6%
Average
38.7%
30
MRV
MCMV
Share MRV Contracted Units- January 2015 to March 2017
31. 142,873
249,636
96,654
289,648 259,779
56,573 19,759
-
91,362
248,568
267,044
267,04
250,607
260,443
249,306
212,567
72,015
22,889
57,072
45,328
36,705
29,028
26,023
24,951
56,236
21,131
2009 2010 2011 2012 2013 2014 2015 2016 2Q17
Group 1 Group 1,5 Group 2 Group 3
143,894
275,075
104,311
389,073
557,961
175,260
16,890 36.858
12.077
23.849
98,593
277,171
325,953
311,965
288,708
289,715
344,729
282.083
134.131
43,818
102,805
77,935
97,711
93,799
37,609
40,526 68.235
29.084
2009 2010 2011 2012 2013 2014 2015 2016 2Q17
Group 1 Group 1,5 Group 2 Group 3
Contracted and Delivered Units
Source: Ministério das Cidades – Datas 2017 up to 05/31/2017
257,124
555,276
409,026
593,393
539,405
286,305
655,051
508,199
798,749
940,948
502,584
402,145
399,253
31
189,473
Contracted Units MCMV
Delivered Units MCMV
343,049
277.777
288.562
110,466
32. Resources invested in the program
2
Group I – According to Ministry of Planning Budget (PAC)
Group II – According to FGTS
• Until 2015: In Group II, subsidy has contribution of 17.5% from National Treasury and 82.5% from FGTS.
• After 2015: In Group II, National Treasury contribution is of 10% and of FGTS is 90%.
**MCMV3: investments estimated for 2015 to 2018
- FGTS has complementary subsidies (up to R$ 27,500 per unit) + Interest Rates subsidy.
- OGU: National General Budget
* The number of units to be contracted remains the same as that proposed at the beginning of the MCMV 3.
Source: http://www.cgu.gov.br/
32
Program Groups Family Income
Contracted
Units
Resources (R$ million) Family Income
Units up to
Ago./2015
Resources (R$
million)
Family Income
Units up to
Jan/2017
Resources (R$
million)
Family Income
Estimated
Units
Resources (R$
million)
Group 1 Up to R$1,395 482,741 R$ 17,999 (OGU) Up to R$ 1,600 1,226,605 R$ 63,724 (OGU) Up to R$ 1,800 53,748 R$ 1,409 (OGU) Up to R$ 1,800 170,000 R$ 203 (OGU)
Group 1.5
From R$ 1,800 to
R$ 2,350
From R$ 1,800 to R$
2,600 80,000
Group 2
From R$ 1,395 to
R$ 2,790
375,764
R$ 1,068 (OGU) +
R$ 3,187 (FGTS)
From R$ 1,600 to
R$ 3,275
1,213,341
R$ 4,369 (OGU) +
R$ 17,104 (FGTS)
From R$ 2,350 to
R$ 3,600
645,692
R$ 805 (OGU) +
R$ 3,689 (FGTS)
From R$ 2,600 to R$
4,000
800,000
R$ 322 (OGU) +
R$ 1,475 (FGTS)
Group 3
From R$ 2,790 to
R$ 4,650
146,623 -
From R$ 3,275 to
R$ 5,000
307,054 R$ 110 (FGTS)
From R$ 3,600 to
R$ 6,500
113,930 R$ 105 (FGTS)
From R$ 4,000 to R$
7,000
200,000 R$ 46 (FGTS)
Group 3 Plus
-
From R$ 7,000 to R$
9,000
Not Available -
TOTAL 1,005,128 R$ 22,254 2,750,000 R$ 85,307 813,370 R$ 6,008 2,000,000* R$ 2,046
MCMV 1 (Apr/2009 - Dec/2010) MCMV 2 (Jan/2011 - Ago/2015) MCMV 3 (Jan/2016 - Jan/2017)** MCMV 3 (Jan/2017 - Dec/2018)**
34. # of Cities x Gross Margin
Competitive Advantages and Market Potential
Note: *Information from Statistics and Information Center, from João Pinheiro Foundation.
MRV inhabitants x Landbank in PSV
1.5 million
(R$ 2.8 bi)
2.4 million
(R$ 4.8 bi)
11.5 million
(R$ 28.6 bi)
3.5 million
(R$ 6.8 bi)
Southeast
South
Middle-west
Northeast
Potential market penetration per month
13,719
MRV Actual
Performance
Additional
Potential
Total
Potential
Sales increment (0.72/1000 habitants)
Average sales / month (2016)
Nationwide Footprint
- Present in 22 States and Federal District
- 148 cities attended by the Company
10,704
3,015
34
35. 35
Business Strategy – Dispersion
Landbank 2016Landbank 2013
Fortaleza Fortaleza
Fortaleza
DISPERSION: STORES AND LAND DISPERSION: STORES AND LAND
The strategy consists in having the right amount of land well balanced in each region of the
cities, to supply the demand.
36. In 2Q17, MRV achieved important marks among
the listed companies:
63% of launches market share in group II and
III of MCMV Program;
49% of total launches in the quarter.
Competitive Advantages – Market Leader in Brazil
Launches Eligible to MCMV
Nominal Value (R$ billion) (Groups II and III)
Note: The data are estimated and based on the listed Companies’ earnings releases.
% of launches in MCMV Program (Groups II and III) – in PSV
% of total launches – in PSV
1Q16 2Q16 3Q16 4Q16 1Q17 2Q17
1Q16 2Q16 3Q16 4Q16 1Q17 2Q17
Other listed companies
36
37. Sales channels:
We have over 4,500 internal brokers, 100% focused in MRV products.
We invest in training and sales techniques to enhance the productivity and quality of our sale process.
Management of commissioning policies of the internal team and definition of sales strategy.
Competitive Advantages – Sales Structure
37
38. Marketing Investment:
2 REACHING
1 ANNUAL INVESTIMENT
3 MAIN CHANNELS
140 Million Brazilians (70% of population)
R$ 120 Million
Data base: December 2016
R$ 2,5 Billion in virtual sales per year.
180 virtual attendant focused in high quality
attendance located in Belo Horizonte.
140 virtual bases all over Brazil with 1,500 brokers
Investments Results:
Competitive Advantages – Effective Marketing Campaigns
Television 30%, Internet 26%, Trade MKT 19%, Newspaper 3%,
Other medias: 22%
38
40. Resolved demands on 1st contact
93.55%
2017
Relationship Portal
General Accesses:
1,144,581
2017
47,319
Number of
Answered
Calls
Monthly Average- 2017
Costumer Service
“Conexão MRV”
+200,000
Views of the videos
“Conexão MRV”
#MeuMundoMelhor
+5,000,000
Views of the videos
#MeuMundoMelhor
Complaints:
0.49%*
Year 2017
MRV in Midias
483,484 followers in Twitter
608,165 followers in Google +
3,978,053 Facebook fans
*Number of complaints over total clients (5 years) – Annual view
Client Relationship
Client Access:
74,293
Monthly Average of Single
Calls
40
41. Pre – Sales (% MRV – R$ million)
Pre-sales per launching period
Sales over Supply
Sales over Supply = Pre-sales / (Beginning Inventory + Launches)
Pre-sales per launching period
Inventory Duration
41
42. Market leader in the main commercial indicators
Launches (R$ million)
In 2Q17, MRV launched twice as much the second peer
42
R$million
2Q16
1Q17
2Q17
43. Market leader in the main commercial indicators
Net Sales (R$ million)
43
R$million
2Q16
1Q17
2Q17
In 2Q17, MRV sold twice as much the second peer
45. Production Team
Approximately 18 thousand people dedicated to Production
Employees on a leadership position (directors, managers and
coordinators) have been working in the company for an average of 9 years.
At this time, we have 198 sites under construction, located in the following
areas:
Northeast 27 (13.6%)
Middle-west
10 (5.1%)
South 37 (18.7%)
Southeast 124 (62.6%)
11
Director
25 Managers
47 Coordinators
369 Engineers
509 Engineering Auxiliary and
Building Technicians
539 interns
18,267 in other positions, being 9,874 MRV
employees and 8,393 third part employees.
Data-base: May/2017 45
46. Operational Advantages – Mechanization and New Technologies
Hydraulic Kit
Reduced workforce
Less generated waste
Greater production rationalization
Better site organization
Standardized projects
Higher speed of production
Strategic equipment team
Simplification of projects
Economically viable
Greater environmental sustainability
Increased work security
Standardization, Mechanization
and Intelligent Processes
Concrete
Prefabricated and
standardized door
Aluminum Forms Hoisted Slab
46
47. Years Sample Average Stand.Deviation Coef.of Variation (%)
2012 107 30.36 4.977 16.39%
2013 152 29.69 4.270 14.38%
2014 135 29.73 4.581 15.41%
2015 99 28.70 4.093 14.26%
2016 108 27.33 4.794 17.54%
2Q17 40 25.65 2.810 10.96%
Operational Advantages - Cost Improvement
It is possible to identify a decrease in average cost, reaching the
lowest level in 5 years.
Which means that our projects are with a better operational
efficiency.
Boxplot of the Sum of the projection cost
Sumofthevalueofprojectioncost
Histogram of the Sum of the projected cost
Frequency
Year
Sum of projection cost value
Increase of efficiency results in:
Less discrepancy in costs and quality;
Lower execution cost 47
2012 2013 2014 2015 2016 1Q17
Year End
49. • R$ 4.5 Billion in payments in 2016
• 55,819 Invoices received in
December 2016
• 20,520 Employees paid per month
• 260 Employees
SSC – Shared Service
Center
• + 5 million views of
#MeuMundoMelhor videos.
• + 1.4 million acesses to the
Relationship Portal in 2016
• 54 thousand: average of calls
answered in 2016
• 166 thousand active clients
• R$ 400 million collected per month
• + 3,000 current accounts reconciled per month
• + 3,000 new registered contracts per month
• 218 employees
• R$ 80 million of investment in IT
(5 years)
• More than 5,500 work station
• 33 million of scanned documents
since 2010
• More than 300 tablets in the
building site
Operational Advantage - Administrative Structure
Client Relationship
and Internal
Communication
Information
Technology
Specialized Services
49
51. Typical MRV accumulated Cash Flow
Since simultaneous sales process started, MRV has
considerably decreased its collection period, contributing to
less working capital need per project launched.
Working Capital Need = Payables – Receivables (inventory not included)
51
Average Colection Period (in days)
Working Capital Need (in days)
2010 2011 2012 2013 2014 2015 2016 1H17
2010 2011 2012 2013 2014 2015 2016 1H17
51
56. Subsidiaries
MRV share: 40%
Present in 25 cities and 9 estates
Extended experience in creating business
and developing assets.
Controls complete cycle of development,
construction and administration of its assets.
Logistics Complex
100% Greenfield
Full control of the cycle, since
the landbank acquisition until the
delivery of the project
Multi-tenant
Projects in modules
Flexible architecture
Lease term of 2 to 10 years
Shopping Centers
100% Greenfield
Complete Shoppings
Operated by specialized
Companies
Strip Malls
100% Greenfield
Regional Commercial Centers
Loteamentos Industriais
100% Greenfield
Full control of the cycle, since the
landbank acquisition until the delivery
of the project
56
45,.92%
57. Executives
60%
40%
Development and commercialization of urban lots in residential and commercial segments, all sustainably
developed.
Subsidiaries
Urbamais operates (i) researching and identifying distinguished areas,
aiming to boost the success of its allotments, and (ii) planning and
executing the infrastructure and urbanism with high quality and
environmental awareness.
The company’s advantages are based on the following pillars: strategic
location of its allotments, operational excellence, cost-benefit of the
projects, quality of infrastructure and urbanism, relationship with its clients
and professional management.
57
58. Landbank with PSV of R$2.5 billion;
362 commercialized units in 2Q17, equivalents to a PSV of R$
18.4 million;
SOS of 21% in 2Q17
Net Revenue: R$ 25.2 million in 1H17
EBITDA margin 1H17: 10.4%
Net margin 1H17: 5.3%
MRV share: 60%
Portfolio %LOG (in GLA) – 1,554,241 sq. meters of GLA
Permitted GLA – 1,052,199 sq. meters (%LOG)
Delivered GLA – 681,616 sq. meters (%LOG)
Net Revenue: R$ 25 million
Adjusted Ebitda: R$ 19.8 million
Equity: R$1.8 Billion
MRV share: 45.92%
2Q17 Highlights 2Q17 Highlights
Results from Subsidiaries
58