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GP Investments 1 GP Investments Earnings Release Fourth Quarter 2020 Earnings Release 2Q18 2 2020 highlights March 31, 2021 – This release reports the 4Q20 and full-year results of GP Investments, Ltd. (‘GP’) [B3: GPIV33], a leader in private equity and alternative investments. 2020 was a challenging year worldwide; and for GP Investments this was no different. At the beginning of the Covid-19 pandemic, most of the companies in GP’s portfolio that have physical premises had to close facilities or operate under restrictions. Brick-and-mortar stores had to be closed, restaurants had to depend mostly on delivery and take-out, and many businesses had to be reinvented fast. In March, GP moved 100% of its team members, across all its offices, to remote working, following procedures in its Business Continuity Plan. The transition to a work-at-home model was seamless, with no interruptions in our activities, and we have continued to leverage multiple digital technologies to enable our teamwork. The results reported by GP Investments in 2020 reflected the volatility of the financial markets, and the economic impacts of the pandemic. In the 4th quarter of 2020, GP posted net income of USD 33.8 million, which was driven by increases in the share prices of our listed companies – primarily Centauro – as well as the positive impact of the temporary BRL appreciation. Nevertheless, for the full year, mark-to-market adjustments in the companies in the portfolio have translated into significant net unrealized losses, which together with the rapid devaluation of the Brazilian Real have led to a total net loss of USD (91.8) million in 2020. Despite the difficulties created by the pandemic, GP has been able to offer extensive support to the management teams leading our portfolio companies, while at the same time leveraging its resources to pursue new investments and take advantage of opportunities created by market dislocations and accelerated digitalization across industries. Highlights of the year include: 1. On June 5, 2020, Centauro raised BRL 900 million in a follow-on offering, priced at BRL 30.00 per share. The company used the proceeds mainly in the acquisitions of (i) the Brazilian operations of Nike, and (ii) NWB (Network Brasil) – a sports content producer that owns the sports-related YouTube channels Desimpedidos and Acelerados, among other operations. 2. Expanding our portfolio of tech-enabled businesses, GP concluded, in the first quarter, an investment in Blu, a Brazilian fintech focused on reducing transaction costs between retailers and suppliers. In the second quarter, GP invested in sim;paul, a brokerage platform that is redesigning the way the financial market relates to the customer. In the third quarter, a new investment was made in CERC, a company that provides the underlying infrastructure of credit financial markets. Recently, in the first quarter of 2021, the investment in Mercado Bitcoin was made – the company is the largest digital assets platform in Latin America. 3. In September, an organizational restructuring was announced: GP Investments and Spice PE contributed their high- growth assets to create G2D Investments, Ltd (‘G2D’), a vehicle that will target primarily minority investments in tech-enabled companies that have developed disruptive technologies and operate in large addressable markets, led by outstanding management teams, and with clear competitive advantages. G2D is exploring an initial public offering (“IPO”) and has submitted preliminary documents to the Brazilian Securities and Exchange Commission. About GP Investments GP Investments is a leading private equity and alternative investments firm. Since its founding in 1993, it has raised USD 5 billion from investors worldwide, completed investments in more than 50 companies, and executed over 25 equity capital market transactions. GP Investments has a consistent and disciplined investment strategy targeting established companies that have the potential to grow and to be more efficient and profitable by becoming leaders in their industries. Since 2006, the Class A shares of GP Investments have traded in the form of Brazilian Depositary Receipts (BDRs) on the Brazilian Stock Exchange (B3 S.A. – Brasil, Bolsa, Balcão), under the ticker GPIV33, and on the Luxembourg Stock Exchange. The firm currently has offices in São Paulo, New York, London and Bermuda. For more information, please see www.gp-investments.com GP Investments 3 GP Investments – Portfolio Overview GP Investments has a diversified portfolio of companies held directly or indirectly through affiliated vehicles that are managed by GP and have significant influence on their investee companies. Each investment vehicle focuses on specific strategies, mainly differentiated by company size, geography, and sectors. Spice Private Equity Ltd (‘Spice PE’) is an investment company focused on global private equity investments. GP Investments became the controlling shareholder of Spice PE, listed on the SIX Swiss Exchange (SPCE), , using proprietary capital as part of its strategy of pursuing a portfolio of companies with global leadership ambitions. 4Q20 update At the end of 4Q20 Spice PE reported Net Asset Value of USD 136.8 million, up 18.1% when compared to 3Q20, and its balance sheet comprised: cash & cash equivalents (19% of total NAV); direct investments (74%); and the Legacy Portfolio (7%). Its balance sheet is debt-free. The increase in NAV mainly reflects the appreciation of the shares of Rimini Street, which is listed on NASDAQ, in the quarter and the FMV reassessments made in private companies. In July 2020, GP Investments and Spice PE created G2D Investments, Ltd (‘G2D’), a new investment vehicle focused on companies that have developed disruptive technologies. G2D will primarily target minority investments in tech enabled companies operating in large addressable markets, led by outstanding management teams, and with clear competitive advantages. G2D was born with a geographically diversified portfolio and with platforms that allow it to pursue new investment opportunities in companies headquartered in Europe, the United States and Brazil. As of December/20, G2D Investments’ portfolio comprised: Blu, The Craftory, Expanding Capital, Quero Educação, CERC and sim;paul. GP Investments 4 The Publicly Listed Portfolio – Performance GP’s portfolio of publicly listed companies this quarter had a positive contribution of USD 13.8 million (excluding the FX impact) resulting in a fair market value (“FMV”) within GP’s 4Q20 results as shown in the quarter below: LTM Share Performance (in local currency¹) Base: Dec. 2019 = 100. 150 1. BR Properties (BRPR3) and Centauro (CNTO3) are priced in Brazilian Reais, while Rimini Street (RMNI) is priced in U.S. Dollars. 140 130 120 113 110 100 90 81 80 70 66 60 50 Dec-19 Feb-20 Apr-20 Jun-20 Aug-20 Oct-20 Dec-20 Centauro BRPR Rimini Street 1. BR Properties (BRPR3) and Centauro (CNTO3) are priced in Brazilian Reais, while Rimini Street (RMNI) is priced in U.S. Dollars. GP Investments 5 GP Investments portfolio: Centauro Date of investment Investment vehicle November 2012 GPCP V Industry Asset liquidity Sporting Goods Retail Publicly traded Centauro (B3: CNTO3) is Latin America’s largest retailer of sporting goods. Founded in April 1981 in Belo Horizonte, Minas Gerais, Brazil, it now operates nearly 200 stores across 22 of Brazil’s 27 states. The stores are designed as ‘temples for sports’, aiming to offer customers not only products but an outstanding experience in sports shopping. Centauro focuses on making technology an increasingly important element in this experience. The backbone of this technological strategy is supported by wholly integrated on-line and off-line sales and support operations. 4Q20 update The company’s performance improved in 4Q20 driven by its digital strategy. In 2020, same-store sales (‘SSS’) were down 28.6% from 2019. E-commerce sales alone, on the SSS basis, were up 74.5% from 2019. Sales through the App were 48% of the digital platform sales in 2020. In September, Centauro signed a contract with NWB (Network Brasil) – a sports content producer that owns the sports-related YouTube channels Desimpedidos and Acelerados, among others. Since it started operating in 2013, NWB has had more than 10 billion views, and currently has the largest audience base in the sports entertainment market in Brazil. The acquisition was approved by the Brazilian antitrust authority, CADE, and the closing has already taken place. In November, CADE also approved the Nike transaction. Nike’s Brazilian operating company was renamed Fisia and is now a wholly owned subsidiary of Centauro’s parent company, Grupo SBF. The partnership agreement establishes Fisia as: (i) the exclusive distributor of Nike products in Brazil, and the operator of its e-commerce, until 2030; and (ii) the Nike Store Partner, authorized to open and operate further Nike stores in Brazil for an initial period of 5 years. GP Investments 6 GP Investments portfolio: BR Properties Date of investment Investment vehicle June 2016 GPCP VI Industry Asset liquidity Commercial real estate Publicly traded BR Properties (B3: BRPR3) is one of Brazil’s leading commercial real estate investment companies. It operates in acquisition, rental, management, development and sale of commercial real estate, primarily in the high-end segment, including offices and warehouses (both logistics and industrial) in Brazil’s main metropolitan areas. 4Q20 update BR Properties (‘BRPR’) is continuously working on improving its occupancy rates, operational efficiency, and capital structure. In 2020, net revenues were BRL 313.6 million, 11% higher on a same-properties basis than in 2019. Same-properties Ebitda was BRL 227.9 million, 19% higher than in 2019, with Ebitda margin of 73%. Physical vacancy at the end of January 2021 was 19.9%. Due to the optimization of its capital structure over recent years, BRPR reduced financial expenses by 83% from 2019 to 2020. As a result FFO in 2020, at BRL 189.4 million, was 234% higher than in 2019.
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