EZTC3

EZTEC Empreendimentos e Participações S.A., traded on B3 under the ticker EZTC3, is a developer and construction company focused on the São Paulo Metropolitan Area. Founded on February 15, 1979, originally as EZ TEC Engenharia Ltda., by entrepreneurs Ernesto Zarzur, Flávio Ernesto Zarzur and Silvio Ernesto Zarzur, the company has built a track record in the real estate development and construction sector over more than four decades. In 2007, it carried out its initial public offering and joined B3’s Novo Mercado segment, with a corporate structure geared toward enhanced corporate governance. Its headquarters are located in the city of São Paulo, and the company’s history has been marked by gradual growth, a focus on profitability and capital preservation, which has allowed it to navigate different cycles in the real estate market.

Since its inception, EZTEC has developed a vertically integrated business model, in which it internally concentrates the main stages of development: land acquisition, project design, construction, marketing, sales and after-sales, including offering its own financing. This approach is intended to provide greater control over costs, deadlines, quality and margins of its projects. The company operates predominantly in the development and sale of residential and commercial projects, and to a lesser extent in the management and leasing of its own properties, land subdivision and the provision of construction and civil engineering services. Its corporate structure is organized through holding companies and special purpose entities (SPEs) for each project, allowing for risk isolation and segmented management of its developments.

Operationally, EZTEC operates in two main business segments: residential and commercial. The residential segment is the core revenue driver, accounting for about 99% of gross revenue in 2024, and ranges from the low-income segment, operated mainly by its subsidiary FIT CASA, to middle, upper-middle and high-end projects, conducted by EZTEC itself and by controlled or affiliated SPEs. The portfolio includes categories such as High-End, Upper-Middle, Middle-End, Low-Income and Smart Living, segmented by total price range and price per square meter, with attention to urban trends and eligibility for housing programs such as Minha Casa, Minha Vida in the case of low-income units. The commercial segment, operated mainly through EZINC and associated SPEs, includes commercial offices, corporate floors and larger-scale projects such as the EZ Towers and Esther Towers corporate towers, in addition to assets aimed at strategic leasing.

The company’s geographic footprint is concentrated in the state of São Paulo, with a focus on the São Paulo Metropolitan Area, which enables operational proximity among land plots, construction sites and sales stands. All of the company’s revenue in 2024 was generated in Brazil, with no material revenue abroad. This geographic concentration facilitates logistics, construction monitoring and team coordination, and also allows for greater specialization in specific local markets, including neighborhoods and areas with their own urban and regulatory dynamics. The company has no customers that individually account for more than 10% of net revenue, which indicates a dispersed buyer base typical of developers focused on individual homebuyers and multiple institutional investors in the corporate segment.

EZTEC’s production process in real estate development begins with the prospecting and acquisition of land, a stage considered critical to the financial feasibility of its projects. The analysis involves studying location, urban characteristics, topography, potential demand, technical feasibility and compliance with zoning laws. After acquisition, the company leads the development of the architectural and engineering project, defining the project concept, unit sizes, layouts and price positioning. In parallel, it seeks the necessary municipal licenses, permits and approvals, a stage that can take several months depending on the size of the land. Construction is managed by its in-house engineering and supervision team but executed mostly by subcontractors hired at fixed prices, which reduces fixed labor costs and allows it to adjust capacity in line with the volume of projects under way.

In portfolio management, EZTEC maintains a significant landbank to support its future launch pipeline, with a potential gross sales value of approximately R$ 11.0 billion in December 2023, predominantly in residential projects ranging from low-income to high-end. In addition to this consolidated landbank, there are land parcels subject to resolutory clauses linked to the completion of technical and legal due diligence. The company ended 2024 with inventory available for sale of around R$ 2.7 billion, mostly residential, distributed among completed projects, projects under construction and recent launches, as well as commercial projects under development. Management of this inventory is supported by specific sales campaigns, with an emphasis on selling units under construction, whose percentage-of-completion (PoC) directly impacts revenue recognition in the financial statements.

EZTEC’s commercial projects follow a business logic that combines leasing and disposal of assets. In corporate floor projects and single-tenant corporate towers, the company tends to lease out units or buildings, seeking to consolidate occupancy and generate income, and then subsequently assess the best timing for sale to institutional or strategic investors. Transactions such as the sale of the towers in the EZ Towers complex to specialized real estate investment groups illustrate this strategy of asset creation and monetization. At the same time, the leasing activity, though representing a small share of total revenue, plays a relevant role in generating recurring cash flow from selected assets and in boosting the value of commercial projects prior to divestment.

From an institutional and regulatory standpoint, EZTEC operates in an environment governed by federal, state and municipal legislation specific to the real estate sector. Developments must comply with the Condominium and Real Estate Development Law, the Civil Code, the Consumer Defense Code and the City Statute, as well as master plans, zoning and land-use laws, building codes and environmental regulations in the municipalities where it operates. The company may adopt the “patrimônio de afetação” regime in certain projects, separating the land and rights associated with the project from the developer’s general assets, which allows adherence to a special tax regime (RET) and greater legal protection for buyers. Real estate financing based on the Real Estate Financing System and the types of collateral provided for by law complement the financial structure of projects, alongside direct financing offered by the company itself to buyers in certain transactions.

Over its more recent trajectory, EZTEC has expanded its activities through partnerships and joint ventures, such as the association with Construtora Adolpho Lindenberg, which resulted in the creation of EZCAL to develop upper-middle and high-end projects. The increased stake in CAL to a co-control position strengthened the company’s presence in these segments, especially in projects aimed at higher-income customers in prime areas of São Paulo. The corporate structure also includes subsidiaries such as EZINC, focused on commercial developments, and FIT CASA, which operates in the low-income segment, as well as various SPEs for each project. This arrangement allows the company to diversify its product standards, control risks by project and adjust the pace of launches according to the macroeconomic and real estate environment in the city of São Paulo.

Common shares EZTC3 reflect this business model centered on residential development in the São Paulo Metropolitan Area, complemented by selective commercial projects and assets for strategic leasing. The combination of a concentrated regional footprint, a robust landbank, a vertically integrated structure and segmentation by income brackets positions the company in a typical manner among developers focused on the middle and high-end markets, with additional participation in low-income products and in larger corporate projects. Revenue generation remains predominantly tied to property sales, with accounting recognition influenced by construction progress and the pace of unit sales over each project’s life cycle.