EZTEC Empreendimentos e Participações S A : Notice to the Market - EZTEC announces Preview of 1Q21 Operating Results

Preliminary Operational Results

Earnings Release

May 13th, 2021

Conference Call

in English and Portuguese

May 14th, 2021

Contact IR:

A. Emílio C. Fugazza Hugo Grassi B. Soares Pedro Tadeu T. Lourenço Giovanna Dias

Tel.: [phone] ri.eztec.com.br/en/

EZTEC S.A.

ON (B3: EZTC3)

Closing Price: R$ 33.2

• shares: 227,000,000 Market Cap: R$ 7,536MN Date: 04/22/2021

EZTEC presents gross sales of R$259 million in 1Q21

Demand remains resilient despite restricted mobility

São Paulo, April 22nd, 2021 - EZTEC S.A. (BOVESPA: EZTC3; Bloomberg; EZTC3:BZ), announces the preview of the operating results for the first quarter of 2021 (1Q21). The results presented here are managerial and are subject to external audit review. The 1Q21 results are scheduled to be released on May 13th, 2021, after the close of the market.

Launches

		Launched PSV				Cumulative Launched PSV
		% EZTEC (R$ MN)				% EZTEC (R$ MN)
								1.428
								650	1972
564			381	28			778		1151	28
0	206	248
	1Q20	2Q20	3Q20	4Q20	1Q21		2017	2018	2019	2020	2021
			Stake Acquisition					EZ Towers

In March 2021 EZTEC carried out its single launch of the quarter: the ID Paraíso project, attached to the Signature by Ott tower. Considering that the red phase of the pandemic in São Paulo forced sales stands shut, the Company chose to launch ID Paraíso entirely remotely. This decision is justified by the underlying demand for units through the course of the pandemic, and also because of the project's special appeal to investors, who are more easily accessible through digital means. By the time of this publishing, as a subsequent event, the project counts with 91 out of its 231 units sold.

1Q21 Launches

ID Paraíso

Location: Av. Fernando

Ferrentini, Aclimação /SP

Segmentation: Residential

Standard: Smart Living

EZTEC's PSV: R$28.1 MN

• sold area: 40%* Units sold: 91*/231

*Update data on April 19th

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2021 Launches

The Company started 2021 having launched the following project:

Project

Actual% EZ

Launch

Conclusion

Region

Standard

# Units

Total PSV 100%

PSV EZTEC

Quarter

Expectation

Launch

(R$ MN)

(R$ MN)

ID Paraíso

50,00%

1Q20

May/24

South Zone

Smart-Living

231

56.2

28.1

Total 1Q21

231

56.2

28.1

Total 2021

231

56.2

28.1

Launching Guidance

By the beginning of 4Q20 EZTEC emitted a Material Fact announcing the guidance for launches for the two-year term of 2020-2021, with the expectations of launching R$4 billion to R$4.5 billion, considering exclusively residential launches. Through the first 5 quarters of the period the Company launched R$1.2 billion, and that same guidance implies an expectation of R$2.8 billion to R$3.3 billion for the following 3 quarters in 2021.

As a subsequent event, already in 2Q21, the Company launched the Dream View Vila Prudente, a mid-income project with a PSV of R$ 252 million, in the East Zone of São Paulo. Even though sales first started in a remote fashion, in a commercial effort targeting exclusive clients (avant-première), the project has its own physical sales stand and should be relaunched soon at a traditional physical fashion.

On April 18th, São Paulo's sanitary control efforts were eased down from a red phase to a transition phase, whereby sale stands have resumed their presential activities, allowing the Company to proceed with its launches. With that goal, EZTEC already counts with the all due licenses from the City Hall for a launch in St. Barão de Monte Santo (PSV of R$164 million), as well as with fully-built sale stands for Arkadio (R$423 million, in Av. Santo Arcadio) and for Altta Vista Residence Resort (R$165 million, at St. Laguna).

Sales and Cancellations

Net sales in 1Q21 were R$236.1 million, decomposed in R$258.7 million of gross sales and cancellations of R$22.6 million.

Net Sales	Cumulative Net Sales
% EZTEC (R$ MN)	% EZTEC (R$ MN)

							605	1.565	1.196
					650
458		334	282	236			605			236
123	216
1Q20	2Q20	3Q20	4Q20	1Q21
2017	2018	2019	2020	2021

EZ Towers

Since the beginning of March, on the 3rd, up to the end of 1Q21, the State of São Paulo had been under the red phase of sanitary controls, forcing sale stands shut. Despite the fact that EZTEC offers the full path for virtual sales, the quarter's performance was still impacted negatively (16% below 4Q20). That's largely attributable to clients postponing their investment decision, with no structural harm to demand. Such circumstantial impact is more visibly felt amid ready units (31% below 4Q20), as clients prefer to await a physical visit to their prospected unit before committing to the purchase, given that condominiums have blocked brokers' access through the red phase. The pent-up demand in the city of São Paulo has been reinforced by the low pace of launches that the sector

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has put forth through 2021 so far. That has contributed for improvements on the Company's sales performance since the last week of March and up to the date of this publishing, despite the deteriorating sanitary conditions.

In regards to the R$22.6 million cancelled in the quarter (39% below 4Q20 and 48% below 3Q20), it is worth highlighting that 44% of cancellations actually refer to downgrades, upgrades, and transfers. In other words, the act of cancelling a sale was tied to a purchase of a different unit, or even to the transferring of the amount paid to a different unit already being financed, such that there was both a sale and a cancellation registered simultaneously. With that said, the volume of cancellations reflect the proactive effort of the Company's credit recovery team to retain clients in a mutually advantageous way

Gross Sales and Cancellations per Status (% EZTEC R$ MN)

259

60

90

													23	2
	104	5						17
															3
	Gross Sales 1Q21									Cancellations 1Q21
			Launches 1Q21		Stand		In Construction			Ready Units

It's worth noting that the former 'launches' category status was subdivided into Launches 1Q21 and Stand. This segmentation is based on the assumptions below (accompanied by examples of the quarter's commercial highlights):

• Launches 1Q21:launched in the quarter;
  (ID Paraíso)
• Stand:projects launched in prior quarters but whose construction is yet to be started, or that was started in the quarter;
  (Eredità Parque da Mooca, Signature by Ott, Fit Casa Estação José Bonifácio, Pin, Meu Mundo Estação Mooca, Gran Maia Giardino, and Gran Maia Piazza)
• In Construction:projects whose construction has started;
  (EZ Parque da Cidade, Jardins do Brasil - Reserva JB, Fit Casa Brás, Air Brooklin, Diogo Ibirapuera, Fit Casa Alto do Ipiranga, etc)
• Ready units:completed projects with proper housing permit issued.
  (Cidade Maia, In Design Liberdade, Up Home Vila Mascote, Centro Empresarial Jardins do Brasil, Clima São Francisco, Jardins do Brasil residencial, Splendor Brooklin, etc.)

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Guided by the transparency and continuity, the graph below discloses gross sales and cancellation figures, accumulated over 12 months:

Sales and Cancellations - LTM (R$ MN)

																2.769	3.014	3.130	3.361	2.936		3.039	2.925	2.598
														2.276
										1.496	1.914									1.798
1.307	1.280	1.443	1.433											1.648			1.550		1.556
															1.393
																												1.309
1.191	1.032											339	1.193
899									206												1.095
		740	610
				463	932	268
													192	194	191		224	235	245
				695	680		681	802
574	617
	421		400
			368
					313
						259		197		144		112			89		88		88		88			106		118		121
3Q17	4Q17	1Q18		2Q18	3Q18	4Q18	1Q19	2Q19	3Q19	4Q19	1Q20	2Q20	3Q20	4Q20	1Q21
									Gross Sales 12M (R$ MN)		Cancellations 12M (R$ MN)
									Gross Sales 12M (unit)					Cancellations 12M (unit)

The following chart shows the sales oversupply calculations, weighted by EZTEC's participation, highlighting the liquidity of the projects originated by the Company:

Sales over Supply (SoS)	1Q21	1Q20
+ Initial Inventory (m²)	215,774	223,250
+ Launches in the period (m²)	0*	47,137
Launches in the period (m²)	0*	48,012
Stake Acquisitions (m²)	0	-875
= Inventory + Launches (m²)	215,774	270,387
- Net Sales in the period (m²)	27,963	49,512
Gross Sales in the period (m²)	31,016	52,145
Cancellations in the period (m²)	-3,054	-2,633
= Final Inventory (m²)	187,811	220,875
Net Sales Over Supply (%)	13.0%	18.3%
Gross Sales Over Supply (%)	14.4%	19.3%

*For this calculation, the area of ID Paraíso had already been accounted for upon the launch of Signature by Ott (4Q20), with no impact to 1Q21 SoS.

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