Multiplan Empen Unsp/Adr

Good morning ladies and gentlemen and welcome to Multiplan's second quarter earnings conference call. Today we have with us José Isaac Pérez, CEO, Mr. Armando Dalmeida Neto, CFO and IRO, Mr. Marcelo Barnes, CIO, Mr. Hans Melchers, Planning and Investor Relations Director, and Mr. Richard Schwarzman, Digital Strategy Director. We would like to tell you that today's event is available for download at the website irmultiplan.com.br. We would also like to let you know that the participants will only hear the earnings call during the presentation. Thereafter, we will start with a Q&A session when we will provide you with further instructions. Should you need any assistance during this earnings call, please press asterisk 0 to reach the operator. And before proceeding, let us mention that forward-looking statements that are based on the beliefs and assumptions of multi-plan management and non-information currently available to the company. Well, these forward-looking statements are not guarantees of performance and they involve uncertainties and risks that are related to future events. Therefore, they depend on circumstances that may or may not occur. Investors should understand that industry macroeconomic conditions may affect the results and may lead to results that are materially different from those expressed in the forward-looking statements. The earnings call should last about 60 minutes. Thereafter, the investor relations team will be available should you have any questions. Now I'd like to give the floor to Mr. José Isaac Pérez, CEO. He will start with the presentation. Mr. Pérez, the floor is yours. Hello, thank you. Ladies and gentlemen, it is a great pleasure to be here. A renewed pleasure, actually, to be here for our earnings call. I think that we have great things to talk about today. in the second quarter of 2022 Multiplan actually achieved new records. And we leveraged many of our results here from our management team. And it's great to see that the sales are increasing. With a growing number of people walking by our shopping malls, this is visible. even more movement than we had before the pandemic. And it's great to see that the customers are in a family environment, a happy environment, an environment that sparks joy because the shopping malls in Brazil are that. That combination of a growing quarter and the rate of occupancy that has grown a lot, many of the stores as well, with a low index of people that are having issues, economic issues. And now we have stability. We don't have that many defaults. And our tenants, as I've told you, are growing at an accelerated pace. We're talking about 4.9 billion reais in this quarter, reaching a new record in sales for the second quarter. Always the end of the year is the strongest quarter, but we have a total revenue of sales that we should get to 20 billion for this company. We never actually got to that number before. And that shows, that highlights actually, This result is 64% higher to the same period in 2021. And if you compare it to 2019, a year that we had a growth in the economy, we didn't have the pandemic, we had a growth of almost 29% in comparison to 2019. So we've had a growth in sales in our shopping malls, above 25% in comparison to the first quarter of 2021, and 14 of them actually grew on double digits in regards to the same period of 2019. And I'd like to actually mention a few exceptional cases. It's important to mention them. Park Shopping Canoas. It's a mall that is completing its five-year... Let's just say spectacular sales. We actually got a growth in sales to the same period of 2018, right? 2018. Yeah. Well, a growth of 86% since the second quarter of 2018. It is something fantastic. I mean, it's as if you are doubling the size of your shopping mall. You're doubling the sales. It's great. Also, we have to talk about Village Mall. And we have to highlight that in the second quarter of 2022, we have sales that surpass 59% in the same period of 2019. If you compare it to 2021, even higher, higher percentage of growth. The flow of vehicles has also grown and we are basically at the same levels of 2019, which is a great news. So the, we have the different transport systems with Uber or, you know, the, the regular, uh, privately owned cars that has grown and that's very good. We have to highlight that most of our tenants, they, They have e-commerce and it doesn't hinder the services provided for the shopping mall by the tenants. It actually complements. But remember, nothing actually surpasses the on-site sales. And I'd like to comment a little bit more on that. Our net revenue got to our gross revenue actually got to 473 million reais that's a revenue by the company and here there is a relation let's just say that i'd like to highlight i always noticed that usually the gross revenue of the shopping mall, it's always 10% of the actual value of the mall. So if the gross revenue is 2 billion, it's because probably we before got to 20 billion in the value of the mall, maybe more. But the beginning of the year is also a bit slower than the end of the year. And this year we have the elections. I don't think that the behavior of our customers will actually change. The operational revenue was 428 million Reais, also a record for the second quarter, the highest in the history of Multiplan in that period. That result allowed us to get to 300 million Reais in EBITDA just on this quarter. And I think that these numbers that we are presenting to you, they are amongst the best, the most important numbers of the listed companies in the stock exchange here in Brazil. And also, I would like to bring your attention to a point. We have had a better result if we didn't actually Denied, let's just say, we didn't get 1.3 billion Reais in revenue. And this is important because we relinquished that 1.3 billion Reais so we could actually allow some breathing room for our tenants. And that's the key issue here. There are partners. So we wanted to solve the issue of vacancy. We reallocated many of our tenants and many of these spaces, we actually implemented new technologies. And today we are hearing a lot about what we said that the onsite commerce is over and everything was going to be remote. No, that's not the way. People are gregarious by nature. They want to be somewhere physically. They want to be on site. Purchasing at a shopping mall is a party. And it's, you know, people are simply, they don't want to just buy things. They want to get the whole experience of getting to meet each other on site. So we would like to Always have a great experience, a fun experience, as we have in Jacarepagua, for example, at the end of last year. The shopping mall is one of the most beautiful and intriguing shopping malls of the country. And we always have to raise the bar. We have to have a reference. We are the reference. Our challenge is always to deliver more than the threshold, more than people actually expect. Jacarepaguá, if you can go there, you will see, I would say, the most unique shopping mall in the world. And not only internally, but externally. We have the park for children, for pets, for dogs, and for cats as well. I don't know if there's any other pets that you can actually bring to the shopping mall, but anyway, cats and dogs. We actually pay a lot of attention to the human factor, the desire of people, the feeling of, you know, getting together. And I always mentioned that at our company. We have desire because humans are a machine moved by desire and feelings as well. and it's on that with that thing in mind in Ribeirão Preto we implemented last year the management center of emotions so now we are servicing something that human beings actually are lacking sometimes that something that humans need we have an innovation the first one in the world When we had, for example, the medical centers and the shopping malls 30 years ago, we were the first ones, if you remember. People thought that that was not compatible, but now that's the norm. And we receive over 300,000 appointments monthly, 300 medical appointments per month. That's a lot. So the company will always go in the direction of what the client, the consumer needs. putting ourselves in the shoes of our customers. What would be good for our customer? And whatever is good for us is better, is the best actually for our customers. So we would always like to deliver more. And in that way, you give a wholesomeness sense and feeling to our clients, to our customers. And maybe this is one of the best performances in shopping malls in the world that we had this year. Not only in Brazil, in the world. Because this year was exceptional growth in sales, that is exceptional growth in revenue, growth in everything. I'm just going to stop with the philosophy and I will continue. Otherwise, I'm going to take too much of your time. Well, I've said that people are... Now, exercising the right to freedom that we couldn't exercise during the pandemic. Now, the collective will to live, our leitmotif, is what is behind the growth and the shopping malls. Remember, the human behavior is gregarious, and that's a key issue. And a poet said once, One, a poet said once that a monkey can never be a monkey by himself or by herself. They work in groups. And in the pandemic, we are advanced monkeys and we like to live in our gregarious groups. Remember, and with that thing that people like to get together, we've had over 170 events, 35 more than the second quarter in 2019. Just the first quarter, right? Second. Okay, what's the second? So we would like to highlight that one of the things that we did was the immersive show on Van Gogh, the Dutch painter. We have started actually in modern B shopping and it surpassed all expectations. And we had a global record of sales for the franchise of 370,000 tickets. I'm talking about 370,000 tickets to see the show based on Van Gogh. And just on this, we're talking about 370,000 tickets. And Modern B Shopping had a growth that was exceptional as well. In the second quarter, we grew 40% and 28% in traffic, car traffic, in comparison to the same period in 2019. So we are surpassing all the numbers from 2019. That project that is also in Rio de Janeiro and Brasilia, it just started in Brasilia, And the company continues with promotion, marketing that is ever stronger, adding news, news that is fun, that bring comfort, that bring culture. And now we get to Rio de Janeiro. with the 8K technology that just made its debut here in Barra Shopping. And we saw it in Sao Paulo. And also I mentioned that actually we have faced many adversities during the pandemic and Parque Jacarepaguá was one of the ones that we faced a lot of adversities as well. Now, we've went through many, many crises over these last 50 years since the inception of our company, and we've always learned, and this is not a Chinese invention, that crises generate opportunities. No. This is something that is in the DNA of any entrepreneur. You have to take the crisis and make it into an opportunity. Lemons into lemonade. I remember that in 1963, when we had the political changes here in Brazil and my first big business here, and we continued with resilience ever since. And finally, Multiplan. So I started my life in as an entrepreneur in 1963. And I believe that in the next year, I will have six years experience in the business. I am not, let's just say crazy. And we continue to create many, many things that many entrepreneurs cannot do because we are visionaries. And for many of you that look as age as something bad, don't do that. Growing old is something that happens naturally, but you can choose to feel old. You can choose to feel old at 40 years old, but you can be young in your mind at whatever age you have. And I am very happy to do what I love, which is to create, to innovate, to provide happiness to people, and that has brought a lot of good results for the company. And that's the feeling. You receive what you, you reap what you sow. So we have to deliver more than what people expect. The reality, we have to turn dreams into reality because when the reality is larger than the dream, it's always good. And that's what we are pursuing to surprise people, to all our clients and provide more comfort, more joy, sparking that joy in our clients. Because when you can actually work with health, work with the soul and work also with the desires, with what you covet, Then you have an environment that you can create a micro city. It's not a Disney world, but we could say that it's an oasis in our cities. That's the DNA of our company to invest in the joy of our clients, of our customers. I would like to highlight that real estate DNA Well, we started as a real estate company and now we have more projects. And remember, I would like to say that our project in Porto Alegre, Golden Lake, just by the side of Barra Shopping Zoo, right in front of Orla do Guaiba, it's still in expansion. And we just launched in October of last year. Our first core, several condominiums. It's a big condominium that encompasses several condominiums. It's like a neighborhood. So we actually sold already 50% of the DGB, which is estimated, which is 570 million. Now we just, regardless of the economic moment that it's of uncertainty in regards to politics, the election, the economy, the pandemic, the SARS-CoV-2, but we continue. We continue regardless, pushing forward regardless of the adversities. So I would like to say that Multiplan has 825,000 square meters in private area that is potential for future developments in real estate. And this is already paid. We already acquired these. Many of these real estate are around our malls, and they had an exceptional valuation. And 200,000 square meters of these 825,000 are expansions of our malls itself, which are projected. And we are just waiting for the most opportune moment to actually start the works. Also, what I would like to highlight and we've been working. It's the investments in technology. We continue to advance in digital innovation. Our app named Multi has over 2.5 million accumulated downloads and has been used in this quarter alone by 700,000 different customers. Over double what we actually got Last year, there is inside of the company a potential for digital content, a huge potential. There is almost one Brazil inside of all of our models, and we are still developing this potential to offer to our clients More sales, making purchasing easier, more awards, more points, more advantages. Therefore, inside of the company, we have this content. And those of you that go to our malls, ear on ear, you can see that. Once again, we can use this app for several of our services that we already provide. And I would like to highlight that we've been working for 15 years. Actually, it's been 15 years since we did our IPO. We take part on all the indexes of the stock exchange, IBRX50, IBOV, and there are several others. The secret to success is to do things right. Just to give you a bit of context of what has happened over these 15 years. We actually multiply the company. Since we did the IPO, this company already invested over. Well, it's, it's, it's, it's pure value over. So more than 20 billion reais. Uh, when we had the revenue that was half of that today, we have double the revenue and, uh, and The idea that the wholesale commerce, the on-site commerce would be over with the remote commerce, that fallacy is over. With the post-pandemic, we can see that people go and they want to go to our malls and they want to be there. Our customers, they're not simply satisfied standing in front of a computer and purchasing something and pressing a button, no. That on-site thing, seeing each other is something key of the human behavior. Maybe I got a bit over the time and I apologize for that. So I will finish saying that. What has happened over these last 15 years since the IPO for our shareholders? We have a revenue of 368 million reais in 2007. And now we catapulted that to 1.7 billion reais over the last 12 months. And I believe that we're going to get to close to 2 billion or even surpass the 2 billion mark. And in that IPO, the revenue of the company is $21 million in 2007 and now the revenue in the last 12 months is $657 million and I hope that this number is much better towards the end of the year. And that's all that I have to say to you. Thank you for your trust and now I apologize for taking too long and now I give the floor to our colleagues. Thank you very much.

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