LAVV3

Lavvi Empreendimentos Imobiliários S.A. is a real estate developer and construction company founded in 2016, originally as Lavvi Empreendimentos Imobiliários Ltda., in a partnership between Cyrela Brazil Realty S.A. Empreendimentos e Participações, RH Empreendimentos Imobiliários Ltda. and entrepreneur Moshe Horn. In 2020, the company was converted into a corporation (sociedade anônima) and became a publicly held company in category A, with common shares traded on B3 under the ticker LAVV3. Following the IPO, carried out in September 2020, Lavvi consolidated its presence in the Brazilian capital markets and began reporting results and operating metrics with greater granularity, while maintaining a strong ownership and operating link with Cyrela.

Lavvi’s main activity is real estate development, focusing on the design, development, construction and sale of residential and non-residential projects. The company operates in a vertically integrated manner along the real estate product cycle, from land prospecting and acquisition through to delivery of units to the final buyer. Its business model involves structuring projects in different price ranges, with a predominance of mid, upper-mid, high-end and luxury segments, seeking to combine economic returns, sales velocity and control of construction costs. In 2024, Lavvi’s net operating revenue came entirely from real estate development, which reinforces the concentration of cash generation in this single operating segment.

Over its history, Lavvi has significantly expanded the scale of launches, PSV and results. Since 2016, the company has launched 28 developments, totaling 12,125 units and approximately 941 thousand m² of private usable area, with gross total sales value (VGV) of around R$ 11.8 billion on a 100% basis. In 2021, the first full year after going public, it recorded launched PSV of R$ 1.2 billion in projects such as Villa Versace, Wonder Ipiranga and Grand Vitrali, in addition to net sales of R$ 943 million. In 2022, even in an environment of high interest rates and contractionary monetary policy, it launched six developments totaling R$ 2.6 billion in PSV, with highlights including High Wonder and Verdant Parque Resort, which together accounted for R$ 520 million in launches. In 2023 and 2024, the company accelerated its development pace, including corporate partnerships and the creation of the Novvo brand, focused on the economic segment, recording in 2024 a record of 11 developments launched, R$ 2.8 billion in launches in its stake and net revenue of R$ 1.5 billion, with significant growth versus the previous year and net income of R$ 343 million.

Lavvi’s operations are concentrated in the city of São Paulo and its metropolitan area, in both residential projects and some non-residential developments. The company positions its products according to well-defined price brackets per square meter, ranging from the economic segment to luxury, although its historical focus has been on the mid, upper-mid, high-end and luxury segments. This segmentation is used in project design, in defining finishing standards, in configuring common areas and in choosing land locations, often in neighborhoods with good urban infrastructure, proximity to subway stations, parks and shopping districts. Lavvi’s landbank, with an estimated value of R$ 8 billion as of December 31, 2024, is almost entirely located in the city of São Paulo, spread across plots already acquired for future developments, which provides visibility for its launch pipeline for the coming years.

The company maintains a vertically integrated production process structured in interconnected stages: land acquisition, project development and permitting, construction and sales. The land acquisition phase is treated as a central strategic factor, with strong involvement from the Horn family and a dedicated new business team that conducts active prospecting, technical, financial and market analysis of each opportunity, and detailed legal due diligence. The project development stage involves hiring architecture, design and landscaping firms, closely monitored by the engineering department to ensure technical feasibility, compliance with regulatory requirements and cost control. In construction, Lavvi uses its own engineering team, with experience in millions of square meters planned and built, as well as partnerships with specialized designers for structures, foundations and installations.

From a commercial standpoint, Lavvi has a sales department focused on strong performance right at project launch, seeking high sales velocity to reduce marketing expenses and funding costs. The commercial strategy involves building an in-house base of brokers who work at the sales stands, daily training sessions on the products offered and multichannel lead-generation initiatives, including presence in key spots of target neighborhoods, targeted telemarketing campaigns and digital marketing. The company also maintains a customization department that allows buyers to adjust the finishes of their unit during the construction phase, as well as a customer service structure supported by customer relationship management systems and post-delivery satisfaction surveys. Client base diversification is high, with no relevant revenue concentration in a single buyer, and no individual client accounted for more than 10% of net revenue in 2024.

Lavvi’s operations are entirely domestic, with all net revenue coming from clients located in Brazil. The company operates under a regulatory framework specific to the real estate sector, subject to federal, state and municipal rules. The development of its projects requires obtaining approvals from city governments and environmental agencies, including construction permits, licenses, architectural project approvals and occupancy permits (habite-se). The development activity is governed mainly by Law 4,591/64, the Civil Code and municipal urban planning legislation, including master plans and zoning and land-use rules. Lavvi may adopt the segregation of assets (patrimônio de afetação) regime in certain developments, which separates the land and improvements from the company’s general assets and allows it to opt for the Special Taxation Regime (RET), with unified tax rates applied to development revenues.

In its relationship with the capital markets, Lavvi supplements the financing of its projects with structured debt instruments linked to the real estate sector. In 2024, it carried out two issuances of book-entry commercial notes for private placement, in multiple series, totaling more than R$ 400 million, which served as backing for offerings of Real Estate Receivables Certificates (CRI) securitized by Opea Securitizadora S.A. These transactions complement shareholders’ equity and cash generation from developments in composing the company’s capital structure, which ended 2024 with a net cash position, reflecting a low level of gross indebtedness. The combination of geographic focus, operations in mid- and high-income segments, vertically integrated processes and the use of real estate financing instruments defines Lavvi’s economic and financial profile and guides the perception of risk and return associated with LAVV3 shares on B3.