Consorcio Ara Sab De Cv · BMV:ARA
Consorcio Ara Sab De Cv — Investor Presentation (June 2016)
33 slides from Consorcio Ara Sab De Cv's investor presentation, June 2016
Slide 1: Consorcio ARA June 2016
ConsorcioARA’ June, 2016
Slide 2: Contents
Contents I. ARA´S Strenghts II. Our Strategy III. ARA’s Results 1Q16 and LTM 2016
Slide 3: Consorcio ARA
Consorcio ARA 39 years of experience 323,500 homes sold throughout its history, inhabited by 1.3 million Mexicans. Focus on developing high-quality houses and Integrated Communities. -1-
Slide 4: ARA's Strengths
I. ARA´S Strengths Geographic and product diversification Strategic land bank ARA’s Financial solidity strengths Vertical integration Flexible construction process A highly experienced management team Robust corporate governance - -52- -
Slide 5: Geographic diversification
Geographic diversification Operating in: 16 States 18 Cities 33 Municipalities 44 Developments -6- -3-
Slide 6: Product diversification
Product diversification AFFORDABLE ENTRY LEVEL Price Range: P$300,000 to P$550,000 USD$16,000 to USD$29,000 MIDDLE INCOME RESIDENTIAL Price Range: P$550,001 to P$1,200,000 Price Range: From P$1,200,0001 USD$29,001 to USD$64,000 From USD$64,001 -4-
Slide 7: Product diversification: Shopping Malls
Product diversification 5 Shopping Malls - -95- -
Slide 8: Shopping Malls
Shopping Malls Shopping Malls Centro San Centro San Miguel Centro las Américas Plaza Carey Plaza Centella Buenaventura Municipality or City Cuautitlán Izcalli Ecatepec Ixtapaluca Veracruz Cuautitlán State State of Mexico State of Mexico State of Mexico Veracruz State of Mexico Community Regional Cen
Slide 9: Strategic land bank by state
Strategic land bank 19 States State Units % State of Mexico 48,278 32.5 Quintana Roo 35,766 24.1 Baja California 10,371 7.0 Nuevo León 7,989 5.4 Jalisco 7,165 4.8 Veracruz 6,892 4.6 Hidalgo 6,203 4.2 Puebla 6,002 4.0 Guerrero 5,401 3.6 Querétaro 2,605 1.8 Subtotal 136,672 91.9 Others (9 states) 12,0
Slide 10: Strategic land bank
Strategic land bank 148,674 master plan units % by Revenues (A) Middle Middle Income 21% Income Affordable Entry 24,601 Affordable Level 16.5% 75.4% Entry 51% 112,108 Level 8.0% 28% Residential Residential 11,965 (A) Percentage obtained from multiplying units per LTM Average Price. -8-
Slide 11: Financial solidity
Financial solidity Act cautiously, Prudent use of grow profitably. debt. Highest S&P and Moody’s credit ratings in the Mexican housing industry for 10 years in a row. Focus on generation of free cash flow to the firm. -9-
Slide 12: Positive trend in our results
Positive trend in our results Millions of pesos 8,000 Revenues +19.3% 700 Net Income +29% 6,843.8 599.4 7,000 600 6,206.1 6,000 5,735.7 490.0 500 464.3 5,000 400 4,000 300 3,000 2,000 200 1,000 100 2013 2014 2015 2013 2014 2015 Cash and Cash Equivalents Net Debt +128% 2,000 1,600 1,467.1 1,787.6 1,4
Slide 13: Vertical integration: value chain
Vertical integration Environment Start and market research Planning and acquiring Post-Sale land bank Final Service Design of homes and Delivery of developments home Value Chain Applications, Titling permits, etc. Procurement Construction /Supply: COMACI Sales - -15 11- -
Slide 14: Vertical integration: ready-mix plants
Vertical integration 20 plants to produce our own ready-mix. 9.1 million m3 of ready-mix produced from 1996 to 2015, enough to build a 60-inch wide, 4-inch-thick sidewalk that would reach around the world one and a half times. - -16 12- -
Slide 15: Flexible construction process
Flexible construction process Monolithic System for the on-site construction of floors and walls. 40% of our housing production is in vertical development. - 13 -
Slide 16: Vertical Construction
Vertical Construction • We have had several vertical housing developments. • “IntegrARA” vertical projects in Mexico City and State of Mexico. • Dream Lagoons ARA projects include vertical construction. • We have been aligned to the public policy of vertical construction and re- densification scheme
Slide 17: A highly experienced management team
A highly experienced management team • Germán Ahumada Russek CEO more than 39 with ARA • Miguel Lozano Pardinas CO-CEO more than 8 years with ARA 31 years of industry experience • Sacramento Soto Solís CFO more than 25 years with ARA “The homebuilder that’s still standing” - -18 15- -
Slide 18: Robust corporate governance
Robust corporate governance 19 years of uninterrupted listing on the Mexican Stock Exchange. 8 our of 11 Board Members are independent. Applies the Code of Best Corporate Practices. - 16 -
Slide 19: Dividends
Dividends ARA has had a policy on paying dividends subject to two conditions: 1) a sufficient balance in the net tax income account, and 2) positive Free Cash Flow generation. Assuming these two circumstances were present, dividend payments would normally amount to between 15% and 25% of our net pro
Slide 20: II. Our Strategy
II. Our Strategy Maintain a diversified portfolio of products with an increased weight in Middle Income and Residential-level homes, accounting for between 55% and 60% of total revenues. Units Revenues 100% 1.0% Other 100% Real Estate 3.9% 1.9% Projects 2.5% 2.2% 2.8% 3.7% 4.5% 6.2% 5.8% 5.6% 13.7%
Slide 21: Our Strategy: differentiated middle income and residential homes
Our Strategy Our Strategy Middle Income and Residential-level homes: A product differentiated from the rest. Paraíso Country Club Dream Lagoons Cancún Dream Lagoons Foresta - -20 19- -
Slide 22: Our Strategy
Our Strategy Our Strategy Paraíso Country Club Club House - -21 20- -
Slide 23: Our Strategy
Our Strategy Our Strategy Dream Lagoons Foresta Dream Lagoons Foresta Dream Lagoons Veracruz Dream Lagoons Cancún - -22 21- -
Slide 24: Some examples of new prototypes
Some examples of new prototypes Our Strategy - -23 22- -
Slide 25: Some examples of new prototypes
Some examples of new Some examples prototypes Our of new Strategy prototypes - -24 23- -
Slide 26: Shopping centers: Increase leasable area
Our Strategy Shopping centers: Increase leasable area. - 24 -
Slide 27: Our Strategy
Our Strategy • Sustained growth in revenues and net income growing at a higher pace than revenues. • Selective approach to land purchases. • Maintain healthy leverage ratios. • Free cash flow generation. - 25 -
Slide 28: Statement of Comprehensive Income 1Q16 - LTM
III. Statement of Comprehensive Income 1Q16 - LTM First Quarter Change LTM Change 2016 / 2015 1Q16 / 1Q15 2016 / 2015 12M16 / 12M15 1Q16 % 1Q15 % $ % 12M16 % 12M15 % $ % Revenues 1,697.2 100 1,669.7 100 27.5 1.6 6,871.3 100 6,402.2 100 469.1 7.3 Costs 1,243.7 73.3 1,225.5 73.4 18.2 1.5 5,012.9 73.0
Slide 29: Revenues: Product Mix 1Q16 Results
Product Mix 1Q16 Results 1Q16 1Q15 Chge. 1Q 16/15 Units % Av. Price Mill. $ Rev% Units % Av. Price Mill. $ Rev% Mill. $ % Affordable Entry Level 1,914 70.1 392.8 751.8 44.3 2,164 68.7 353.9 765.8 45.9 -14.0 -1.8 Middle Income 603 22.1 689.8 416.0 24.5 825 26.2 711.4 586.9 35.2 -171.0 -29.1 Residenti
Slide 30: Revenues: Product Mix LTM 2016
Product Mix LTM 2016 LTM Apr'15-Mar'16 LTM Apr'14-Mar'15 LTM 16 / 15 Av. Av. Units. % Mill. $ Rev% Units. % Mill. $ Rev% Mill. $ % Price Price Affordable Entry Level 6,937 60.4 367.9 2,552.2 37.1 7,344 64.5 345.3 2,536.2 39.6 16.1 0.6 Middle Income 3,829 33.3 688.7 2,636.9 38.4 3,402 29.9 754.0 2,56
Slide 31: Balance Sheet March 2016
Balance Sheet March 2016 Change As of Mar'16 As of Dec'15 Amount % ASSETS CURRENT ASSETS: Cash and cash equivalents 1,413.9 1,467.1 -53.2 (3.6) Accounts Receivable 512.3 463.8 48.5 10.5 As of March 31, 2016: Land for development 4,767.8 4,751.4 16.4 0.3 Work in process (mainly) 8,685.2 8,685.2 0.0 (
Slide 32: Disclaimer
Disclaimer This presentation contains certain statements about future plans and expectations which constitute forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. Such forward looking statements are generally stated in terms of the Company’s plans, e
Slide 33: Contact
Contact Alicia Enriquez Investor Relations Director E-mail: aenriquez@ara.com.mx Phone: (+5255) 5246-3100 x 4096 Address: CONSORCIO ARA Arcos Bosques Marco II. Paseo de Tamarindos 90, Torre I. 25th floor, Bosques de las Lomas, Zip Code 05120. México City, México www.consorcioara.com.mx