A Leader in Alternative Investments in Latin America

3Q16 Earnings Conference Call

November 11, 2016

Disclaimer

GP Investments presents its results excluding non-controlling interests to reflect the participation of GP
Investments as a Limited Partner in the funds it manages and the fees received from the Private Equity,
Real Estate and Asset Management businesses, as a general partner and shareholder, respectively. It
also includes the consolidated financial figures from Spice Private Equity. They are management figures
and, therefore, not audited. The complete financial statements which include minority interests and are
reviewed by our independent auditors are presented in the 3Q16 earnings release.
These financial statements are in US GAAP standards and are being released simultaneously in all
jurisdictions in which GP Investments has its securities traded. In compliance with the Brazilian Securities
and Exchange Commission (Comisso de Valores Mobilirios), the issuer releases financial statements in
IFRS standards which may differ from these financial statements, due to different grounds of such
accounting standard.

Earnings Release 3Q16 Conference Call GP Investments

Agenda

Financials

Portfolio Companies Performance

Earnings Release 3Q16 Conference Call GP Investments

Financial Results
GP Investments posted a net result of US$9.9 million during the third quarter of 2016, increasing YTD
net results to US$73.4 million. This result was mainly driven by the positive performance of the shares
from our publicly listed portfolio companies
3Q16

Income Statement

9M16

Fund
Management

Capital Results

Total

Fund
Management

Capital Results

Total

Management fees

6.4

6.4

19.1

19.1

Performance fees

0.0

0.0

3.0

3.0

Unrealized change in FMV

14.3

14.3

64.3

64.3

Net realized gains

0.2

0.2

2.2

2.2

Dividends and others

2.1

2.1

6.4

6.4

Gain on purchase of investment

41.6

41.6

(1.0)

(1.0)

3.1

3.1

In US$ million

Unrealized performance fees

Net Revenues

5.4

16.6

22.1

25.2

114.5

139.6

Operating expenses

(8.4)

(8.4)

(27.3)

(27.3)

Bonus and carried interest sharing expenses

(0.5)

(0.5)

(2.2)

(2.2)

Unrealized carried interest sharing

Expenses

0.4

0.4

(2.0)

(2.0)

(8.5)

(8.5)

(31.5)

(31.5)

Intercompany management fees

(1.3)

(1.3)

(4.0)

(4.0)

Intercompany performance fees

(1.3)

(1.3)

Stock options

(0.6)

(0.6)

(1.4)

(1.4)

(2.9)

(2.9)

(27.6)

(27.6)

(3.1)

11.7

8.6

(6.3)

80.1

73.8

(0.4)

(0.4)

(1.2)

(1.2)

1.7

1.7

1.7

1.7

(3.5)

13.4

9.9

(7.5)

81.8

74.3

Financial income / loss net

EBT
Income taxes
Spice's Net Income
Net Income

Earnings Release 3Q16 Conference Call GP Investments

NAV Change Breakdown

GPs NAV reached US$385 million in the quarter, an increase of US$9.3 million or 2.5% during the
period. NAV per share increased to US$3.53 in 3Q16 from US$3.45 in 2Q16
Magnesita
Par Corretora
BR Properties

$ 8.2
$ 7.7
$ 2.0

17.8

(In US$ million)

GP RE

(0.5)

$ (0.5)

Dividends
Unrealized Fees
Interco. Fees
Others

(3.0)

$ 2.1
$ 0.3
$ (1.3)
$ (1.4)

(2.9)
1.7

(0.3)

385.0

Spices Net
Income

Other

NAV 3Q16

Change in FMV:
US$14.3 million

375.7

(3.5)

NAV 2Q16

Fund
Management
Results

Mark-toMarket Effect

Privately Held
Companies

Foreign
Exchange
on Portfolio

Net Financial
Results

Earnings Release 3Q16 Conference Call GP Investments

Share and NAV Performance (BRL)

Discount to NAV: 40%

LTM Share Performance (BRL): +5.4%

3Q16 Share Performance (BRL): -8.5%

140.00

130.00

120.00

110.00

100.00

90.00

80.00

Share Price (USD):

NAV per Share (USD):

NAV Discount:

2.11

3.53

40%

As of September 30, 2016

As of September 30, 2016

As of September 30, 2016

Earnings Release 3Q16 Conference Call GP Investments

Agenda

Financials

Portfolio Companies Performance

Earnings Release 3Q16 Conference Call GP Investments

Listed Portfolio Companies

Earnings Release 3Q16 Conference Call GP Investments

Performance of our Publicly Listed Portfolio Companies

During the third quarter of 2016, there has been a significant share appreciation among
GP Investments four publicly listed portfolio companies
Par Corretora

Magnesita

BR Properties

Spice

PARC3.SA

MAGG3.SA

BRPR3.SA

SPCE

3Q16: +14.4%

3Q16: +48.2%

3Q16: +14.0%

3Q16: +4.4%

Earnings Release 3Q16 Conference Call GP Investments

Par Corretora & Magnesita Update

Recent Developments

Financial Highlights
Net Revenues

EBITDA

R$mm

R$mm

Another quarter of solid growth and

higher operational efficiency

+9%

+12%
103

95

Continued gains in efficiency and

improvements in products performance
Despite the increase in taxes over
revenues, the EBITDA margin presented
a 1.5 p.p. increase

Negative impact from lower steel

production in most of Magnesitas core
markets

55

50

3Q15

3Q16

3Q15

Net Revenues

EBITDA

US$mm

US$mm

3Q16

-3%
246

-10%

239

39

35

Sustained YTD Adjusted EBITDA

margin vs. 2015 on the back of cost
control measures
3Q15

Earnings Release 3Q16 Conference Call GP Investments

3Q16

3Q15

3Q16
9

Transaction between Magnesita and RHI AG

On October 5, 2016, Magnesita announced a transaction to combine its operations with RHI AG,
creating a leading company in refractory solutions (RHI Magnesita). For more information, please
see Magnesitas Material Fact published on the same date

Relevant Precedent Conditions

1

Approvals by the relevant competition authorities

Migration of RHI to Netherlands

Listing of RHI Magnesitas shares in a premium segment of the London Stock Exchange

RHIs shareholders not having exceeded the cap related to statutory withdrawal right

Impact for GP

451 million valuation for Magnesitas share capital

42% higher when compared to Magnesitas market cap as of September 30, 2016
Significant impact on GPs NAV,

but depending on the evolution of Magnesitas share

price until closing

Earnings Release 3Q16 Conference Call GP Investments

10

BR Properties & Spice Update

Recent Developments
The company continued to show resilience with above-market
average occupancy rates and margins
Significant quality of its portfolio and tenant strategy
Ongoing corporate reorganization to optimize fiscal structure and
debt profile

NAV increased 1.3% during the 3Q16, to US$42.30 per share

Strong performance of the investment portfolio
Total NAV of US$226.2 million, mainly Cash & Equivalents (32%),
Receivables (33%) and current EM Portfolio (35%)
Liquidity position of US$73.4 million, allowing investments to be
made under the new investment guidelines

Earnings Release 3Q16 Conference Call GP Investments

11

Private Portfolio Companies

Earnings Release 3Q16 Conference Call GP Investments

12

Centauro & EBAM Update

Recent Developments
Continued on a positive trend during the quarter, with better gross
margins and important expense reductions
Relevant improvement in the EBITDA on both YoY and QoQ
comparisons for bricks-and-mortar and e-commerce
Company continues to integrate on- and off-line operations, aiming
at better serving clients and increasing share-of-wallet

Noticeable improvements in the results on the back of

infrastructure projects that were on standby mode
Higher revenues and lower administrative expenses translated into
higher EBITDA and margins

Earnings Release 3Q16 Conference Call GP Investments

13

BHG, Allis & Beleza Natural Update

Recent Developments
Hospitality industry continues to suffer with over capacity and decrease
in corporate travel
The Olympic Games in Rio de Janeiro attracted significant tourism,
which resulted in relevant improvements in results

Labor-oriented offerings with more competitive pricing and shorter

implementation times prevented further erosion of revenues

Cost cutting measures reduced SG&A expenses, partially offsetting the

negative impact of revenues on the EBITDA

Challenging market for the Beauty and Care sector

Management has implemented important cost cutting initiatives
International expansion plan to enter the US market
Earnings Release 3Q16 Conference Call GP Investments

14

Real Estate Portfolio

Earnings Release 3Q16 Conference Call GP Investments

15

Real Estate
During the 3Q16, GPRE I launched two new projects: Central da Barra L.04, a residential
development in So Paulo, and Vila Rica, a residential development in Santos
Projects launched in 3Q16

Partner: Bueno Netto

Launched: Sep/16
Delivery: Oct/18
Residential building
targeting the
low income
segment

Product:
384 units
79 units sold

Vila Rica Santos

Residential

Residential

Central da Barra L.04 So Paulo

Partner: Gafisa
Launched: Oct/16
Delivery: Sep/19
Residential building
targeting the
middle-to-high-income
segment
Product:
62 units
10 units sold

As of September 30, 2016, the Real Estate fund had invested or committed to invest US$132 million since
its inception (roughly 108% of the total commitment, due to proceeds re-investment permission)

Earnings Release 3Q16 Conference Call GP Investments

16