MRV Engenharia e Participações (MRVE3) Investor Update summary

Strategic review and lessons learned

• Over 13 years in the U.S. market, the company completed 25 projects totaling 7,450 units and $1.2 billion in sales, experiencing both successful and challenging cycles, especially after pandemic-driven expansion.

• The company matured by gaining local market knowledge and implementing a distinct, industrialized construction process, mainly in South Florida.

• Utilizes concrete walls and off-site components to reduce labor needs and accelerate build times.

Strategic evolution and performance

• Initial phase (2012-2019) focused on building a rental portfolio with gross margins above 30% and favorable cap rates; post-2020, the strategy shifted to developing properties for sale, requiring significant capital.

• Projects completed in 2020-2022 delivered strong results (YoC 6.8%, Cap Rate 4.8%), but 2023-2024 projects saw lower YoC (4.7%) due to high interest rates and inflation.

Portfolio restructuring and divestment plan

• A new management team and strategy were introduced at the end of 2023, focusing on recycling legacy properties and selling assets, even at a loss, to generate cash and deleverage.

• The divestment plan targets ~$800 million in asset sales through 2026, with $117 million already sold and expected total cash generation of $493 million, reducing net debt by ~$365 million.

• Four legacy projects remain for sale, with three expected to be stabilized by year-end; 11 additional land plots are being prepared for sale, all expected to be sold within two to three quarters.

• Total impairment from asset and land sales is $144 million, with $81 million from land and $63 million from projects, recognized in 2Q25 for assets to be sold below cost.