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2Q08 Results Conference Call
Heitor CantergianiCEO
Overall Outlook
Main Operating and Financial Highlights
Leonardo DinizSales Officer
Launches and Sales
Economic Segment
Geographical Expansion
Gerson CohenController
2Q08 Performance
Margin Analysis
Indebtedness
Agenda
4
Launches
2Q08: R$ 1,085 million in 18 projects
1H08: R$ 1,353 million in 23 projects
Contracted Sales
2Q08: R$ 711 million in 2,819 units
1H08: R$ 1,127 million in 4,430 units
Margin recovery in 2Q08 (gross margin of 39.7% and EBITDA margin of 16.0%)
Economic Segment
R$ 264 million launched in 8 projects
R$ 500 million in the pipeline to be launched in 2008
R$ 4.4 billion land bank
Land bank
R$ 16.3 million PSV, of which 72% in swaps
Accounting Practices in line with International Standards
Awards – Magazine Isto É Dinheiro
Best Company in Corporate Governance Management in general category
Best Company in HR Management in the engineering and construction sector
Overall Outlook
2Q08 Results Conference Call
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2Q08 - 18 projects:
Launches
2Q07 2Q08
Rossi
776
309
401
92
Launches Breakdown by Price Segment and State in 1H08
120%
1H08 - 23 projects
Partners
1H07 2H08
811
954
399142
42%
Campinas, Florianópolis, Fortaleza, Guarulhos, Juiz de Fora, Mogi das Cruzes, Belo Horizonte, Novo Hamburgo, Porto Alegre, Recife, Rio de Janeiro, São Paulo, SJ Rio Preto, Vila Velha.
Launches 1H08 (R$ million)
47%
24%
9%
7%
7%
6% > R$ 500,000
Affordable Segment
R$ 200,000 to R$ 350,000
< R$ 200,000
Commercial
R$ 350,000 to R$ 500,000
26%
23%
10%
10%
8%
6%
5%
5%4% 3%
São Paulo (metropolitan region)
São Paulo (other cities)
Ceará
Rio Grande do Sul
Minas Gerais
Rio de Janeiro
Espírito Santo
Rio Grande do Norte
Santa Catarina
Pernambuco
493
1,085
953
1,353
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Contracted Sales Breakdown by Price Segment and State in 1H08
1,127
2Q08
Rossi
533
24717871
124%
Partners
1H07 2H08
534
846
281159
63%
Contracted Sales (R$ million)
27%
25%15%
14%
13%
6% > R$ 500,000
R$ 200,000 - R$ 350,000
R$ 350,000 - R$ 500,000
Affordable Segment
< R$ 200,000
Commercial
26%
22%
19%
10%
9%
5%
4%5%
São Paulo (metropolitan region)
São Paulo (other cities)
Rio Grande do Sul
Rio de Janeiro
Espírito Santo
Ceará
Rio Grande do Norte
Paraná, Minas Gerais, Pernambuco and
Santa Catarina
318
711 693
2Q07
2Q08 Results Conference Call
1H08
Launches: R$ 264 million
3 Buildings
5 Residencial Plazas
Contracted Sales: R$ 126 million
2H08
Projects: approximately R$ 500 million in PSV, 28 projects and 5,000 units
6 Buildings
15 Residencial Plazas
7 condominium in 2 Villa Flora’s community
Villa Flora Plazas Buildings
8
AffordableSegment
2Q08 Results Conference Call
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Potential PSV (100%): R$ 16.3 billion
Rossi’s Share: R$ 11.8 billion
Land bank PSV in R$ million
2Q08
Total
Total Rossi
16,271 11,763
Breakdown
Launches PSV 2Q08
Final 1Q08
Origination 1Q08
Final 2Q08
15,247
(1,085)
2,109
16,271
10,684
(776)
1,854
11,763
Acquisition Method
Land Bank distributed in 138 lands in 53 cities, not concentrated.
13.2 million m2 buildable area
future launches (in units) – 87,816
4 to 5 years PSV in the bag for future launches
Land Bank
Swap by unit46%
FinancialSwap26%
Cash28%
Partners
Rossi
9.6 10.1
4.0 4.6
0
4
8
12
16
3Q07 4Q07
10.7
4.6
1Q08
11.8
4.5
2Q08
R$ billion
2Q08 Results Conference Call
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Land Bank : Potencial PSV
Land Bank 2Q08 (in R$ million) - PSV by Region and by Segment
State Affordable Segment
R$ 120,000 to
R$ 200,000
R$200,000to
R$350,000
R$350,000to
R$500,000
> R$500,000
Commercial Lots Total %
Bahia 75 322 1,053 152 - - - 1,603 10%
Ceará 323 - - 104 - - - 428 3%
Distrito Federal - 63 46 - - 242 - 351 2%
Espírito Santo 368 - 36 - 62 102 - 595 4%
Goiás 797 43 - - - - - 840 5%
Mato Grosso do Sul 53 - - - - - - 53 0%
Minas Gerais 134 85 - - 248 - - 467 3%
Paraná 90 - - - 122 111 - 323 2%
Rio de Janeiro 35 165 1,242 195 180 - - 1,817 11%
Rio Grande do Norte 134 - 70 - - - - 205 1%
Rio Grande do Sul 1,855 87 474 823 - - - 3,239 20%
São Paulo (metropolitan region)
673 86 355 771 974 176 224 3,259 20%
São Paulo(other cities)
729 203 1,036 400 82 4 639 3,092 19%
Total 5,295 1,055 4,312 2,445 1,666 635 863 16,272 100%
Distribuition 33% 6% 27% 15% 10% 4% 5% 100%
2Q08 Results Conference Call
Focus on low to middle income segments – 66% PSV < R$ 350,000
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Geographical Presence
53 Cities 14 States
PE
RN
PB
RS
PR
SP
MG
RJ
ES
BA
SC
CE
GO
MS
AM
PAMA
AL
AC
RRAP
ROTO
PI
MA SE
Regional São Paulo (RSP)São PauloCotiaGuarujáGuarulhosJacareíMogi das CruzesOsascoPraia GrandeSantana de ParnaíbaSanto AndréSantosSão Bernardo do CampoSão Caetano do SulSão José dos CamposSão PauloMato Grosso do SulCampo Grande
Regional Belo Horizonte (RBH)Minas GeraisBelo HorizonteNova LimaUberlândiaDistrito FederalBrasíliaÁguas ClarasGoiásGoiânia
Regional Sul (RPOA) ParanáCuritibaSanta CatarinaFlorianópolisRio Grande do SulCanoasNovo HamburgoPorto AlegreSão Leopoldo
Regional Rio de Janeiro (RRJ)Rio de JaneiroNiteróiRio de JaneiroVolta RedondaEspírito SantoSerraVila VelhaVitóriaMinas GeraisJuiz de ForaBahiaLauro de FreitasSalvador
Regional Nordeste (RNE)CearáFortalezaPernambucoRecifeRio Grande do NorteNatal
Regional Oeste Paulista (ROP)São PauloMaríliaRibeirão PretoSão CarlosSão José do Rio Preto
Regional Campinas (RCPS)São PauloCampinasHotolândiaIndaiatubaJaguariúnaPaulíniaPiracicabaSorocabaSumaréValinhosVotorantim
2Q08 Results Conference Call
Long Term Sustainable Competitive Advantage: Building up Local Know-How
66.0
115.5 122.6
180.6
2Q07 2Q08 1H07 1H08
176.1
291.1342.9
496.6
2Q07 2Q08 1H07 1H08
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Financial Highlights (R$ million)
Net Revenue Gross Income and Gross Margin
37.5%
39.7%
35.8%
36.4%
Unearned Revenue and Results Jun/08 Mar/08 Var.
Unearned Revenue 1,460.8 1,165.7 25.3%
Unearned Results 506.0 409.0 23.7%
Backlog gross margin 34.6% 35.1% -0.5 p.p.
65%
45%47%
75%
2Q08 Results Conference Call
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Gross Margin Breakdown and Performance
Net Operating Revenue(R$ million)
2Q08 2Q07 Var. 1H08 1H07 Var.
Sale of property and services 273 167 63% 469 336 39%
Monetary Variation (INCC) 30 14 118% 46 17 172%
(-) Taxes over sales (12) (5) 146% (19) (10) 82%
Total 291 176 65% 497 343 45%
Construction works + lands 166 106 57% 299 212 41%
Financial Charges 10 5 110% 17 9 97%
Total 176 110 59% 316 220 43%
Gross MG 39.7% 37.5% 2.2 p.p 36.4% 35.8% 0.6 p.p.
Adjusted Gross Mg (-) Finan. Charges 43.0% 40.1% 2.9 p.p. 39.8% 38.3% 1.5 p.p.
Adjusted Gross Mg (-) Finan. Charges (-) INCC 36.4% 35.0% 1.4 p.p. 33.6% 35.0% -1.5 p.p.
Adjusted Gross Mg (-) INCC 32.8% 32.2% 0.6 p.p. 29.8% 32.4% -1.5 p.p.
2Q08 Results Conference Call
36.646.6
62.267.9
2Q07 2Q08 1H07 1H08
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Financial Highlights (R$ million)
EBITDA and EBITDA Margin Net Income and Net Margin
35.050.8
63.471.1
2Q07 2Q08 1H07 1H08
20.8%
16.0%
18.1%
13.7%
19.9%
17.4%
18.6%
14.3%
EBITDA 2Q08 2Q07 Var. 1H08 1H07 Var.
Operating Income (Loss) 56 42 33% 81 77 5%
(+) Depreciation and Amortization 0 0 43% 1 1 41%
(+/-) Financial Expenses (Revenues) (15) (8) 100% (24) (18) 31%
(+) Financial Charges 10 5 110% 17 9 97%
(-) Profit sharing (4) (3) 61% (6) (5) 20%
EBITDA 47 37 27% 68 62 9%
EBITDA Margin 16.0% 20.8% -4.8 p.p. 13.7% 18.1% -4.5 p.p.
45%
11%
27%
9%
2Q08 Results Conference Call
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Total Debt: R$ 623.3 million
Cash Position: R$ 134.2 million
Net Debt: R$ 489.1 million
Shareholders’ Equity: R$ 1,135.1 million
Indebtedness
Cash and Banks
Investments - ST
Investments - LT
Linha Stand by Bradesco R$ 100 millionDebentures R$ 300 million
17%
35%
48%76%
23%
1%
Construction Financing - LT
Debentures
ConstructionFinancing - ST
Working Capital51% 18%
15%
16%
2Q08 Results Conference Call
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Analyst CoverageInstitution Analist Contact
UBS PactualGuilherme Vilazante Gordon Lee
Credit Suisse Marcelo Telles Vanessa Quirog
[email protected] [email protected]
Bradesco Carlos Firetti Marcos Suzaki
[email protected] [email protected]
JP Morgan Adrian HuertaSomesh Agarwal
[email protected] [email protected]
Bulltick Rafael Pinho [email protected]
Santander Marcello MilmanGonzalo Fernández
[email protected] [email protected]
BB Investimentos Antonio Emilio Ruiz [email protected]
Unibanco Carlos Macedo [email protected]
Merrill Lynch Alexandre Miguel Carlos Peryrelongue Esteban Polidura
[email protected] [email protected] [email protected]
Deutsche Bank Dan McGoeyMichelle Dorea
[email protected] [email protected]
Citigroup Cecília del CastilioRodrigo Villanueva Bravo
[email protected] [email protected]
Banco Fator Renato Pinto [email protected]
Itaú Tomas Awad [email protected]
Goldman Sachs Jason B. Mollin [email protected]
Raymond James Conrado Vegner [email protected]
2Q08 Results Conference Call
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2Q08 Results Conference Call
IR Team
Sergio Rossi CuppoloniInvestor Relations Officer
Maria Claudia BiolchiniInvestor Relations [email protected]. (55 11) 3759-7516
20
2Q08 Results Conference Call
DisclaimerThis material is a presentation of general background information about Rossi Residencial S.A. (“Rossi”) as of the date of this
presentation. Information contained herein has been summarized and does not purport to be complete. This presentation shall not be
considered an advice of investment by potential investors. This presentation is strictly confidential and may not be disclosed to any third
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This presentation contains statements and information that are forward-looking pursuant section 27A of the Securities Act of 1933, as
amended, and Section 21E of the Securities and Exchange Act of 1934. Such forward-looking statements and information are only
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