EZTEC - Investor Relations Mobile

Notice to the Market - EZTEC announces Preliminary 3Q16 Operating Results

Cancellations volume stabilizes in the 3Q16
Finished Inventory showed an increase in Net Sales

São Paulo, October 24th, 2016 - EZTEC SA (BOVESPA: EZTC3; Bloomberg: EZTC3: BZ), announces its preliminary operating results for the third quarter of 2016 (3Q16). Note that the results presented here are managerial results and are subject to revision following the external audit. The complete and audited results for the 3Q16 are scheduled to be disclosed on November 09th, 2016, after market closure.

Contracted Sales and Cancellations

The Company had a quarter in which the cancellations exceeded sales. When we analyze the net result of -R$ 17.7 million in 3Q16, with a positive accumulation of R$35.2 million in 9M16, it is important to place some points: [i] despite the gross sales have been reduced between the months of July and August compared to the second quarter of this year, 74% came from completed units; [Ii] unlike the last quarters, the 3Q16 showed no increase in the volume of cancellations; [Iii] with less intense period of deliveries, there was a reduction in cancellations of performed projects, and these had net sales of R$20.0 million in the quarter. In 2Q16, net sales of performed units was R$9.2 million.

Still regarding the current sales situation, from the point of view of cash flow for the Company the cancellations represent disbursement of only part of the amount paid by customers, which value is at most 15 to 20% of the total value of unit. However, when we observe gross sales, which in 9M16 were 60% from units completed by September 2016, it is not only full revenue recognition, but the coming into of the total value in cash, or direct financing from EZTEC with the statutory lien. Thus, we could observe in 1H16 generation of more than R$160 million in cash and the 3Q16, managerial unaudited figures also indicate new generation of approximately R$45 million.

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Contact IR

Telephone: +55 11 5056 8313
E-mail: ri@eztec.com.br