Multiplan Empen Unsp/Adr

Good morning and welcome everyone to Multiplan's first Q22 earnings conference call. Today we have Mr. José Isaac Pérez, CEO. Mr. Armando Dalmeida Neto, CFO and IRO. We also have Mr. Marcelo Barnes, CIO. Mr. Hans Melcher, Planning and Investor Relations Director, and Mr. Richard Schwartman, Digital Strategy Director. Now, we inform you that today's live webcast and presentation will be accessed through Multiplan website at ir.multiplan.com.br. We also would like to inform you that This event is being recorded and all participants will be in a listen-only mode during the company's presentation. Thereafter, we're going to start with a Q&A session. And at the time further, we will receive further instructions. Should any participant need any assistance during the call, please press asterisk or star zero to reach the operator. Before proceeding, We would like to let you know that any forward-looking statements that are based on the beliefs and assumptions of Multipliance Management and based on operational goals. And it's based on information that is currently available for the company. These forward-looking statements are not Guarantees of performance and they involve risks and uncertainties. We are talking about events of the future. Therefore, they depend on circumstances that may or may not occur. The investors should understand that conditions related to the macroeconomic scenario, industry and other factors could also cause the results to differ materially from the expressed in such forward-looking statements. This earnings call will last for approximately 16 minutes. After this period, the investor relations team will be available for the Q&A session. Now, I would like to give the floor to Mr. José Isaac Pérez, President That will start with the presentation. Please, Mr. Perez.

Good morning, ladies and gentlemen.

It is a great pleasure to be here in this earnings call. Now we start the first presentation for the year 2022. We have some great news for you. And I will be as brief and objective as possible to talk about these performance. We are joyful about the performance that we have had so far this year. And I would like to explain to you what is the base that we use to demonstrate this. Now, the sales for this quarter are almost 4 billion Reais. If you compare it to 2019, the first quarter, which was a year of growth, a great year, 2019, then we had 13.5% more growth comparing the first quarter of 19 with the first quarter of 22. 26.4% if you compare it to the first quarter of 2020 and 74.8% if you compare it to the first quarter of 2021. Our sales have increased month by month. Here, it's an observation, a digression. In Rio de Janeiro, we are comparing with 2019. In January, we grew 4.9%. In February, we grew 15.3%. In March, 20.8%. And in April, if you consider the first 25 days of April, we grew 32.3% in regards month by month, if you compare it to 2019. In April, the sales are estimated to be around 1.6 billion. The acceleration is an increase of 140.2% if you compare it to April 2021. And here is a fantastic number. 2,125% if you compare it to April 2020. These are kind of scary numbers, but nonetheless, very good numbers. So you see that the pandemic affected our sector severely. Still talking about of April 22 and comparing it to April 2019, if we estimate, we did an estimation. And looking at the present, we believe that our sales can get to 20 billion Reais even. And our last estimate would be a growth of 20% if you compare it to 2019. If you compare it to the other years, it's not even fair because we were closed, you know, we had a pandemic. We all know how it affected and the concern of the municipal state authorities, regardless of us doing a fantastic work, of investigating the level of contamination at the shopping mall. And we hired an international company with several countries. And then after the evaluation, we got a result that was shocking. But we let the municipalities know the results of our report. there was no virus in our shopping malls. So that idea that the virus lasts on wood, on clothing, that did not happen. In the air conditioning we had nothing, in the air we had nothing, nothing in the restrooms. So what I would like to say is that regardless of our efforts to show the authorities that we're taking all the hygiene precautions, all the sanitary precautions, with social distancing and all the protocols that were established by the Brazilian Association of Shopping Malls, we suffered with this. But this is a moment for recovery. And I believe that this is very similar to other sectors of the economy. So in this first quarter, the malls of Rio de Janeiro were really a highlight. And it was the first one to release the people from having to use the mask in closed quarters. And it was a decision of the authorities that we do not have to use the masks. So it had a very significant effect. and it was recognized at the shopping mall level. So in this first quarter of 2022, the shopping malls of Rio de Janeiro grew 30%. Village Mall, for example, the growth is 77%, 57% in comparison to 2019. And this happened because during the pandemic, the population of that southern zone went more to the Village Mall. It's a very international mall. It has a lot of different clothing companies, so that really helped. So regardless of not having a mask mandate, we are still doing very well. And a very expressive piece of data, and I believe Modum B Shopping, it has an increase in vehicle transit, 36% above 2019. That has to do also with the event that we are sponsoring, the Van Gogh Exposition that really brought over 50,000 people, and it's the That's how we celebrate Morumbi shopping, which will be 40 years old in May. We have a few 40-year-olds in our portfolio. In this quarter, the gross revenue is 453 million, grew 33% if you compare it to 2019. If we compare it to 2020, 59%, so on and so forth. The numbers speak for themselves. The fact that I'd like to remind everyone is that our DNA, the Multiplan Company, was born out of the real estate sector. And at this moment, we have 825,000 square meters for future projects, future real estate developments. The shopping malls, we still have a project for expansion for over 200,000 square meters. So the best thing that we can have in terms of profitability is to grow where the malls are already profitable, where there is a high demand. The expansion has to adapt the mall to the new needs of the society. Our concern throughout these 50 years was taking into consideration the social demands. Before the shopping malls, they were focused on clothing, fast food, and some other activities. But nonetheless, today, the shopping malls, they concentrate big areas for leisure, restaurants, and therefore, This is demanded from society. It is an area of entertainment, joyfulness, where people can meet with safety. The shopping mall is a product of the urban chaos. If there wasn't any malls, the cities would not work. If you remember years ago, we had an exponential growth in automobiles and It's evident that there was no way that we could simply park the car in the street to do our shopping. The shopping mall is a creative urban solution and today, evidently, we realize that people go to the mall, at least in Rio de Janeiro, and then you park, for example, in Rio de Janeiro at the shopping mall and then you go to the beach. People actually use our parking lots to go to the beach. So we hope that today We, the shopping mall in the cities, are the big point for meeting up. That's where the families go. And we are gathering the fruits of our labor, regardless of the moment of the pandemic. And we see growth in our sales. And I estimate that things are going to continue to grow. We can see that the companies that were, well, the tenants, we were at the peak of the pandemic, 10% was our vacancy. Now it's 5% vacancy. And usually the usual number was two to 3%. So we somehow are gathering the fruits of our labor when we talk to our tenants when we basically did not charge those condominium charges from our tenants over billions and billions of reais. The tenants are our partners. Therefore, we had to give them good facilities and we have to work with them. That's why the company had a recovery. And we understand that the public, the shopping mall, everybody is our public. But this partnership, long-term partnership, today bears the fruit, positive fruits. And I think that we have one of the lowest vacancy rates in Brazil. We also would like to talk about we're building in Porto Alegre a great project. It's a neighborhood. And the southern region of Porto Alegre that is growing after we invested in Barra Shopping Zoo, we have Orla do Guaíba, which is always a highlight. And now we are building Golden Lake for Billion Reais project. We started the first core. The area is practically already urban. It's a closed neighborhood. It's a fantastic neighborhood. You can imagine that everybody has everything that they need to live in a community. And it is integrated to Barra Shopping Soul. So the neighborhood Guaíba is part We sold the first quarter, we sold 40% and we started with the building and six works of real estate. The project is estimated in 4 billion Reais and it will be done throughout these years and we are going to get a great return on investment. This project Its approval is 10 years. It is a very, very long story. So, we are happy that we're changing how Zona Sul looks at itself and it goes to counterpoint the northern zone of Porto Alegre. So, a data that I would like to highlight is the issue of using technology. Facing our traffic of about 200 million people that go to our malls. But 20% of these people go there almost every day. And this is a potential that is used by our MIND, M-I-N-D, our digital innovation and marketing program, And we're investing in technology. This is very useful for the company. And we have good results. The mind department. So our marketing and digital innovation department, we gather great results. Over 200,000 clients, customers downloaded multi. And this year is a total of downloads of 2.2 million. Since the launch. 2.2 million since launch. Correct. Yes. So what I want to understand is when we talked about technologies, they are disruptive. So I would like to say that this did not happen and a great deal of of what we saw are based on technology. And every mall has an app. But the mall is where people go, they examine, they see the merchandise. It's a little bit romanticized, in my opinion, but the clothing in the shopping mall, the buying on site is much better than just simply buying at the digital level. Digital is a need. Sometimes you need to order some pizza. Sometimes you need to order a book. It's almost like a purchase of a commodity. So when you talk about restaurants, people complain that if it's not a pizza, the food is not so great when it's delivery. So that search for technology and integration and the fact that All of our tenants also have their own apps. It has a greater potential because today we have two fronts of communication. Millions of people that go to the mall and we receive over 2 million people per month and we can see the products. It is very different. At the same time, today, all the tenants have their app. So I would like to say that the building of the mall, the integration of the mall and technology is very streamlined.