OPERATING PREVIEW

3Q23

Belo Horizonte, October 10th, 2023 - Direcional Engenharia S/A, one of the largest homebuilders and real estate development companies in Brazil, focused on the development of low-income and medium-income projects and operating in several regions of the Brazilian Territory, discloses here its operating statements for the third quarter of 2023 (3Q23). Unless otherwise stated, the information in this document is expressed in national currency (Brazilian Reais - BRL or R$) and the Potential Sales Value ("PSV") demonstrates the consolidated amount (PSV 100%).

NOTICE TO THE MARKET

3Q23 OPERATING PREVIEW

  • RECORD-HIGHNET SALES IN 3Q23: BRL 1.0 BILLION, A 19% INCREASE VERSUS 3Q22 AND
    4% VERSUS 2Q23
  • LAUNCHES REACHED BRL 3.5 BILLION IN 9M23 (+34% OVER 9M22), PUTTING UP BRL 4.5

BILLION IN THE LAST 12 MONTHS

HIGHLIGHTS

  • In 3Q23, PSV launched totaled BRL 1.4 billion, 18%higher than in 3Q22, being 58% in the Direcional segment and 42% in the Riva segment.
  • Net Sales of BRL 2.8 billionin 9M23, a 20%growth in relation to 9M22.
  • In the 12-month period ending in 3Q23 (3Q23 LTM), Net Sales came in at BRL 3.5 billion.
  • Riva's Net Sales totaled BRL 441 millionin the quarter, the highest level in the segment's history.
  • Net Sales Speed ratio (VSO) of 17%in the quarter in the consolidated view, while Riva's VSO came in at 19%.

1

OPERATING PREVIEW

3Q23

LAUNCHES

In the third quarter of 2023 (3Q23), Direcional Group launched 15 new projects, totaling a PSV of BRL 1.4 billion (BRL 1.3 billion

  • Company), an 18% increase in relation to the year-ago period, consonantly with the Company's strategy of delivering operating growth.

Projects under Direcional brand accounted for 58% of the total PSV launched, while projects under Riva brand accounted for 42% of the total volume.

Considering the 9-month period ended in September 2023 (9M23), the PSV launched totaled BRL 3.5 billion (BRL 3.0 billion % Company), a 34% growth versus 9M22. Likewise, it is also important to highlight the PSV launched in the last twelve months (3Q23 LTM), which totaled BRL 4.5 billion (BRL 3.9 billion % Company), showing the clear evolution carried out by the Company over the last few years.

Also noteworthy is the growth in the Company stake of launches, which represented 90.0% of the total PSV launched in the quarter. Thus, when considering the PSV owned by the Direcional Group (BRL 1.3 billion), the metric shows an even greater growth (+16% in relation to 2Q23 and +30% in relation to 3Q22), indicating an upward trend in the representativeness of projects with smaller stakes of partners in the mix of launches.

Launches

Launches Track Record

(PSV 100% - BRL million)

(PSV 100% - BRL million)

Riva

+34%

4,525

CAGR:

Direcional

3,467

3,636

+27%

3,138

2,579

1,296

+18%

1,053

1,905

1,946

1,763

1,457

1,399

1,189

-4%

576

586

2,171

1,109

549

1,526

832

880

814

640

3Q22

2Q23

3Q23

9M22

9M23

2016

2017

2018

2019

2020

2021

2022

3Q23

LTM

Table below provides further information on projects launched in 3Q23 and in 9M23:

Launches

3Q23

2Q23

3Q22

Δ %

Δ %

9M23

9M22

Δ %

(a)

(b)

(c)

(a/b)

(a/c)

(d)

(e)

(d/e)

PSV Launched - 100% (BRL million)

1,399.4

1,456.6

1,189.1

-3.9%

17.7%

3,467.3

2,578.5

34.5%

Direcional

813.5

880.3

639.8

-7.6%

27.2%

2,171.1

1,525.8

42.3%

Riva

585.9

576.3

549.3

1.7%

6.7%

1,296.2

1,052.7

23.1%

PSV Launched - % Company (BRL million)

1,259.3

1,088.9

966.7

15.6%

30.3%

2,958.7

2,227.6

32.8%

Direcional

725.3

711.2

556.6

2.0%

30.3%

1,913.0

1,378.4

38.8%

Riva

534.1

377.7

410.1

41.4%

30.2%

1,045.7

849.3

23.1%

Launched Units

4,152

5,268

4,113

-21.2%

0.9%

12,182

10,205

19.4%

Direcional

3,106

3,507

2,711

-11.4%

14.6%

9,089

7,283

24.8%

Riva

1,046

1,761

1,402

-40.6%

-25.4%

3,093

2,922

5.9%

Average % Company

90.0%

74.8%

81.3%

15 p.p.

9 p.p.

85.3%

86.4%

-1 p.p.

2

OPERATING PREVIEW

3Q23

CONTRACTED SALES

As was the case in the previous quarter, Direcional Group once again surpassed the BRL 1 billion mark in Gross Sales in 3Q23. This time, however, also the Net Sales metric reached the historic mark of BRL 1 billion (BRL 751 million % Company), setting yet another record-highquarter. When compared to the year-ago period, there was a growth rate of 19%, and when compared to the previous quarter, the amount was 4% higher.

In terms of mix of products, it is worth highlighting the share of Riva's projects in the volume sold in the period, which totaled BRL 441 million (BRL 322 million % Company), which also set the best quarter in the history of the segment, +35% versus 3Q22 e +16% versus 2Q23.

In 9M23, Net Sales reached BRL 2.8 billion (BRL 2.1 billion % Company), a 20% growth over 9M22. In the period, the PSV of projects under Direcional brand grew 9%, while the PSV of products under Riva brand grew 44%.

Considering the 3Q23 LTM, there was an amount of BRL 3.5 billion in Net Sales (BRL 2.7 billion % Company), reinforcing the growing performance of the Group's operations year after year.

It is worth noting that a significant part of the quarter's sales came from products developed in partnerships - mainly from projects launched at the end of the previous quarter (2Q23), and/or from SPVs that were sold during 2Q23, whose Group's stake in the shareholder structure decreased considerably, as mentioned in the previous Earnings Release. In that sense, as mentioned before regarding the Launches, it is important to highlight the growth tendency of the Company stake in total PSV, as projects with a smaller stake of partners gain representativeness in the sales mix.

Net Sales

Net Sales Track Record

(PSV 100% - BRL million)

(PSV 100% - BRL million)

Old Harvest

+20%

Riva

2,770

3,465

2

Direcional

2,304

CAGR:

2,999

3

1,055

+32%

2,440

733

+19%

1,005

1,451

1,680

847

962

1,320

0

3

+4%

1,713

1

914

326

380

441

1,569

494

520

582

561

3Q22

2Q23

3Q23

9M22

9M23

2016

2017

2018

2019

2020

2021

2022

3Q23

LTM

3

OPERATING PREVIEW

3Q23

Table below presents information about Net Sales in 3Q23 and in 9M23:

Net Sales

Net Sales - PSV 100% (BRL million)

Direcional

Riva

Old Harvest1

Net Sales - PSV % Company (BRL million)

Direcional

Riva

Old Harvest

Contracted Units

Direcional

Riva

Old Harvest

Net Sales Speed (VSO) in PSV

Direcional

Riva

Old Harvest

3Q23

(a)

1,004.6

560.7

441.2

2.7

751.4

427.2

322.3

2.0

3,458

2,344

1,109

5

17%

15%

19%

7%

2Q23

3Q22

Δ %

(b)

(c)

(a/b)

962.5

846.9

4.4%

581.8

520.1

-3.6%

380.3

326.0

16.0%

0.4

0.7

604.9%

733.9

682.3

2.4%

467.7 450.0 -8.7%

265.8

232.3

21.3%

0.4

0.1

459.7%

3,575

3,403

-3.3%

2,458

2,597

-4.6%

1,116

804

-0.6%

1

2

400.0%

18%

19%

-1 p.p.

17%

19%

-2 p.p.

18%

19%

1 p.p.

1%

2%

6 p.p.

  • %
    (a/c)
    18.6%
    7.8%
    35.3%
    261.8%
    10.1% -5.1%38.7%

3347.4%

1.6%

-9.7% 37.9% 150.0%

-2 p.p.

-4 p.p.

  1. p.p.
  1. p.p.

9M23

9M22

Δ %

(d)

(e)

(d/e)

2,770.4

2,304.5

20.2%

1,712.7

1,568.5

9.2%

1,055.5

732.9

44.0%

2.2 3.1 -27.6%

2,128.2 1,864.5 14.1%

1,358.1

1,315.7

3.2%

768.1

547.4

40.3%

2.0

1.4

36.9%

10,279

10,268

0.1%

7,334

8,062

-9.0%

2,941

2,200

33.7%

4

6

-33.3%

36%

39%

-4 p.p.

36%

43%

-7 p.p.

36%

35%

1 p.p.

8%

3%

6 p.p.

1 - Old Harvest: Comprises projects of the middle income, upper-middle income and commercial segments, developed in the former model.

NET SALES SPEED (VSO)

In 3Q23, Net Sales Speed, measured by the VSO index (sales-over-supply ration), came in at 17% in the consolidated view, with a 15% index in Direcional's projects (excluding Old Harvest segment) and a 19% index in Riva's projects.

Net Sales and VSO

(PSV 100% - BRL million)

19%

19%

18% 18%

19%

17%

19%

19%

17%

17%

17%

15%

15%

13%

12%

962

1.005

847

3

803

0

1

694

380

441

Old Harvest Sales

326

234

Riva Sales

207

Direcional Sales

520

489

570

582

561

Direcional VSO

Consolidated VSO

-2

-1

Riva VSO

3Q22

4Q22

1Q23

2Q23

3Q23

4

OPERATING PREVIEW

3Q23

INVENTORY

Direcional Group ended 3Q23 with 17,617 units in Inventory, adding a PSV of BRL 5.0 billion (BRL 4.1 billion % Company).

Table below shows the Inventory at market value, detailed by stage of construction and by the type of product. It is worth mentioning that less than 2% of the total PSV refers to completed units, with about 1% related to Direcional projects (ex-Old

Harvest products).

Breakdown of Inventory at Market Value

In progress (BRL million)

% Total

Completed (BRL million)

Total PSV

Direcional

3,078

61%

40

Total PSV

%

Riva

Old Harvest

1,865

0

37%

0%

2

37

Total PSV

Total

4,942

98%

79

% Company

Direcional

2,517

62%

38

% Company PSV

Total PSV

Riva

Old Harvest

1,486

0

37%

0%

2

22

Total

4,003

98%

62

% Total

1%

0%

1%

2%

1%

0%

1%

2%

Total (BRL million)

3,118

1,867

37

5,021

2,555

1,487

22

4,064

% Total

62%

37%

1%

100%

63%

37%

1%

100%

Total Units

12,848

4,658

111

17,617

12,848

4,658

111

17,617

% Total Units

73%

26%

1%

100%

73%

26%

1%

100%

LANDBANK

The Direcional Group's landbank totaled a development potential of 180,830 units at the end of 3Q23, representing a PSV of BRL 35.6 billion (BRL 32.2 billion % Company).

The average cost of acquisition was equivalent to 11% of the PSV, and 83% of the payment shall be made through swaps, which causes a reduced impact on the Company's cash position before the beginning of the development of the projects.

Evolution of Landbank

2022

9M23

9M23

Adjustment1

9M23

9M23

(BRL million)

Landbank

Acquisitions

Launches

Landbank

(PSV % Co.)

Total PSV

32,459

6,550

(3,467)

103

35,644

32,171

1 - Adjustment: update of sales prices, canceled sales and swaps.

Units

180,830

Land Acquisition

During 3Q23, 6 plots of lands were acquired, with a construction potential of 4,961 units and a PSV of BRL 1.3 billion (BRL 1.3 billion % Company). The average cost of acquisition in the quarter was equivalent to 12% of total PSV, and 87% of the payment shall be made via swaps.

Considering 9M23 acquisitions, the PSV totaled BRL 6.6 billion (BRL 6.0 billion % Company), at an average cost of acquisition of 11% in the period, with 90% of the payment being made through swaps.

5

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Disclaimer

Direcional Engenharia SA published this content on 10 October 2023 and is solely responsible for the information contained therein. Distributed by Public, unedited and unaltered, on 11 October 2023 04:12:21 UTC.