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3Q13 Presentation
Presenters
Marcos Lopes – CEO
Francisco Lopes – COO
Marcello Leone – CFO and IRO
Bruno Gama - COO CrediPronto!
2
This presentation does not constitute or form part of any offer, or invitation or solicitation of any offer to purchase,
sell or subscribe for shares or other securities of the Company, nor shall this presentation or any information
contained herein form the basis of, or act as inducement to enter into, any contract or commitment whatsoever.
This presentation contains financial and other information related to the business operations of Lopes –LPS Brasil
Consultoria de Imóveis S.A and its subsidiaries (“LPS” or the “Company”) as of and for the period ended
September 30th 2013. It should not be considered as a recommendation for prospective investors to sell,
purchase or subscribe for securities of the Company. The information presented herein is in summary form and
does not purport to be complete. No reliance should be placed on the accuracy completeness of the
information contained herein, and no representation or warranty, express or implied, is given on behalf of the
Company or its subsidiaries as to the accuracy completeness of the information presented herein.
This presentation contains forward-looking statements. Investors are advised that whilst the Company believes
they are based on reasonable assumptions by Management, forward-looking statements rely on current
expectations and projections about future events and financial trends, and are not a guarantee of future results.
Forward-looking statements are subject to risks and uncertainties that affect or may affect business conditions
and results of operations, which therefore could materially differ from those anticipated in forward-looking
statements due to several factors, including competitive pressures, Brazilian macroeconomic conditions,
performance of the industry, changes in market conditions, and other factors expressed or implied in these
forward-looking statements or disclosed by the Company elsewhere, factors currently deemed immaterial.
The forward-looking statements contained herein speak only as of the date they are made and neither
Management, nor the Company or its subsidiaries undertake any obligation to release publicly any revision to
these forward-looking statements after the date of this presentation or to reflect the occurrence of unanticipated
events.
Forward-looking statements
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Schedule
I. Highlights
II. Operational Results
III. Credipronto!
IV. Financial Results
4
Highlights
3Q13 Highlights
5
Total transactions closed reached R$ 14.2 billion in 9M13 and 4.5 billion in 3Q13
We had the best quarter in transactions closed in the secondary market in our history. Secondary market
transactions achieved R$ 3.6 billion in 9M13 and R$ 1.3 billion in 3Q13;
Net revenue came to R$ 128.8 million, increase of 18% when compared to 3Q12
EBITDA of R$ 60.2 million, up 42% from 3Q12. EBITDA Margin of 46.7%, 890 bps above 3Q12
Adjusted EBITDA, without non-recurring effects came to R$ 38.2 million, with EBITDA Margin of 36,5%, 180 bps
above 2012 average (34.7%);
Net Income of Controlling Shareholders before IFRS was R$ 37.0 million with a net margin of R$ 28.7%. An
increase of 45% when compared to 3Q12 and an improvement of 590 bps of net margin
We generated R$ 37.4 million through our operating activities in the quarter, which represented 76% of our net
income
Credipronto! presented its best quarter ever in mortgage loans origination with R$ 564 million in 3Q13, up 56%
from 3Q12, and CrediPronto!’s ending portfolio balance increased 48% when compared to 3Q12
We recognized another share of the second stake of CrediPronto’s earnout, totaling R$ 24.9 million. We
already recognized R$ 42.4 million YTD, and this recognition is partial and a complete calculation will be held
during 2013
6
Operational Results
Transactions Closed
(R$ MM)
Transactions Closed
7
Number of Transactions Closed
-10%
9M13
14,202
10,576
3,626
9M12
13,880
10,503
3,376
3Q13
4,497
3,188 1,310
3Q12
4,975
3,793
1,181
+2%
Primary Market Secondary Market
-29%
-18%
9M13
35,125
28,525
6,600
9M12
42,841
35,333
7,508
3Q13
10,730
8,528 2,202
3Q12
15,061
12,525
2,536
(# units)
Sales Speed over Supply
Lopes' Consolidated Sales Speed Habitcasa’s Sales Speed
8
3Q13
17.3%
2Q13
16.6%
3Q13
25.8%
2Q13
29.0%
(%) (%)
Transactions closed/supply ratio fell when compared to 2Q13
Units
Transactions Closed
9
10,730 units
R$ 4,497 million
Transactions Closed by Income Segment – Primary / Secondary Markets
34%
28%
31%
7%
45%
26%
24%
5%
10%
37%
19% 34%
>600 <150 150-350 350-600
15%
36%
22%
27%
R$ 4,975 million
15,061 units
3Q12 3Q13
3Q12 3Q13
Transactions Closed by Region – Primary and Secondary Market
Transactions Closed
10
5%
15%
4%
20%
50%
6% 4%
20%
4%
18%
48%
6%
Northest
South
Brasília
Rio de janeiro
São Paulo
Others
3Q12 3Q13
Increase of 500 basis points of South region’s stake
Breakdown of Transactions Closed
11
Breakdown Transactions Closed
(%)
3Q13
40%
60%
3Q12
32%
68%
Listed Homebuilders
Non Listed Homebuilders
Breakdown Transactions Closed Primary Market
(%)
29%
43%
28%
Listed Homebuilders
Secondary Market
Non Listed Homebuilders
Breakdown of Homebuilders
53% 55%
64% 67% 65%
47% 45% 36% 33% 35%
2011 2012 1Q13 2Q13 3Q13
Other Homebuilders Top 10 Homebuilders
10% 9% 7% 5% 6%
5% 7% 5%
5% 5%
5% 5%
5% 4% 5%
5% 5% 5% 4% 4%
4% 4% 4% 3% 4%
2011 2012 1Q13 2Q13 3Q13
1st 2nd 3rd 4th 5th
12
Breakdown – Homebuilders Breakdown Top 5 Homebuilders
(%) (%)
Launches 3Q11 | 3Q12 | 3Q13
(R$ MM)
3Q13
5,345
3Q12
7,809
3Q11
6,918
-1,573
-2,464
3Q13 Launches
3Q13 presented less launches than 3Q11, that was already seasonally weak
13
Concentration of Launches
(%)
Breakdown of Homebuilders
26% 15%
45% 44% 45%
25%
23%
22%
12% 10%
15%
18%
42% 4Q13E
4Q11 4Q12
3Q13
3Q11 3Q12
2Q13
2Q11 2Q12
1Q13
1Q11 1Q12
In line with the historical
seasonality observed in
the pipeline of
launches, we believe in
a strong turnaround of
the volume of launches
in 4Q13
14
LPS Brasil in the Mortgage Market
CrediPronto!
15
CrediPronto!
16
R$564 MM in
Mortgages Average LTV of
57.7% 1,855 Contracts
Average Period
of 308 months Average Rate
of 8.7% + TR
3Q13
Financed Volume
CrediPronto!
(R$ MM)
17
(R$ MM)
Mortgage Portfolio
564
362
+56%
3Q13 3Q12
+48%
Ending Portfolio Balance 3Q13
3,688
Ending Portfolio Balance 3Q12
2,492
The average portfolio balance was R$ 3.6 billion in 3Q13. The total volume granted until Sep,13 reached R$ 5.0 billion
CrediPronto!
517 707
881
1,162
1,454
1,756 1,989
2,266 2,492
2,771 2,986
3,328
3,688
Sep, 10 Dec, 10 Mar, 11 Jun, 11 Sep, 11 Dec, 11 Mar, 12 Jun, 12 Sep, 12 Dec, 12 Mar, 13 Jun, 13 Sep, 13
18
Ending Portfolio Balance
(R$ MM)
The ending portfolio balance of Credipronto! has been growing on average 5.9% per month since Sep,10 and reached R$ 3.7 billion in Sep, 13
Financial Results
19
20
Net Commission by Market
Net Comission Fee
3Q11 4Q11 1Q12 2Q12 3Q12 4Q12 1Q13 2Q13 3Q13
BRAZIL 2.4% 2.4% 2.3% 2.4% 2.4% 2.4% 2.4% 2.4% 2.4%
Primary
SP 2.9% 3.1% 2.8% 3.1% 3.0% 2.9% 2.9% 2.9% 2.9%
Habitcasa 2.1% 2.1% 2.0% 1.9% 2.1% 2.0% 2.4% 2.4% 2.4%
RJ 2.2% 2.1% 2.1% 2.1% 2.0% 2.2% 2.2% 2.1% 2.0%
Other Markets 2.1% 2.1% 2.1% 2.0% 2.1% 2.1% 2.1% 2.1% 2.1%
Secondary
SP 2.3% 2.4% 2.2% 2.2% 2.4% 2.2% 2.3% 2.4% 2.1%
RJ 2.4% 2.3% 2.3% 2.0% 2.3% 2.2% 2.3% 2.2% 2.3%
Other Markets 2.4% 2.5% 2.3% 2.5% 2.1% 2.5% 2.0% 2.3% 3.0%
Gross and Net Revenue
Net Revenue
21
(R$ MM)
Gross Revenue
(R$ MM)
+16%
3Q13 3Q12
123.7 118.3
24.9
143.2
-4%
104.8
3Q12 3Q13
+18%
108.8
128.8
-4% 24.0
Net revenue grew 18% and reached R$ 128.8 million in 3Q13
CrediPronto’s earnout CrediPronto’s earnout
3Q13 Gross Revenue Reconciliation
IMPORTANT CRITERIA FOR CONTRACTED SALES
The contracted sales released in the quarter is exclusively based on the invoiced sales,
which multiplied by the net commission result in the gross revenue of the quarter.
Thus, the contracted sales meets all the criteria for accounting the Company’s gross
revenue, even including the contract approval by the homebuilder. Additional sales
generated during this same period, that do not meet all the accounting criteria were not
considered as contracted sales of the period.
22
3Q13 - Gross Revenue Reconciliation (R$ Million)
Contracted Sales (a) 4,497
Net Comission (b) 2.40%
Gross Brokerage
Revenue (a) x (b)107.8
Earn Out Recognition 24.9
Revenue to Accrue from Itaú
Operations3.6
Other revenues 7.8
Adjustment to Present Value (0.9)
Gross Revenue 143.2
Expenses
72.1
3Q12
65.0
3Q13
63.4
1Q13
65.6
4Q12
68.1
2Q13
Operating Expenses¹ 3Q13 (R$ MM)
3Q13 represented a lower level of operating expenses
23 1. Excludes costs and expenses of CrediPronto!.
Results 3Q13 Before IFRS
(R$ thousand)
Launches Pronto! CrediPronto!Consolidated
Ex. Non-recurringNon-recurring Consolidated
Gross Service Revenue 80,110 32,592 5,598 118,300 24,894 143,194
Revenue from Real Estate Brokerage 77,275 32,713 5,598 115,586 - 115,586
Revenue to Accrue from Itaú Operations 3,625 - - 3,625 - 3,625
Earn Out - - - - 24,894 24,894
Adjustment to Present Value (790) (121) - (911) - (911)
Net Operating Revenue 70,888 28,840 5,093 104,821 23,985 128,806
(-)Costs and Expenses (34,622) (12,601) (3,469) (50,693) (1,710) (52,403)
(-)Shared Services (11,037) (4,490) - (15,527) (363) (15,890)
(-) Stock Option Expenses CPC10 (381) - - (381) - (381)
(-) Expenses to Accrue from Itaú (238) - - (238) - (238)
(+/-) Equity Equivalence - - 260 260 - 260
(=)EBITDA 24,610 11,748 1,884 38,243 21,912 60,154
EBITDA Margin 34.7% 40.7% 37.0% 36.5% 46.7%
(-)Depreciation and amortization (2,817) (1,041) - (3,859) - (3,859)
(+/-) Financial Result 3,311 570 5 3,886 - 3,886
(-)Income tax and social contribution (7,591) (2,702) (609) (10,903) (2,708) (13,611)
(=)Net income before IFRS 17,512 8,575 1,280 27,367 19,203 46,570
Net Margin before IFRS 24.7% 29.7% 25.1% 26.1% 36.2%
(-) Non-controlling Shareholders (9,601) (9,601)
(=) Net Income Attributable to Controlling Shareholders Before IFRS* 17,766 19,203 36,969
Net Margin Controlling Shareholders 16.9% 28.7%
*We consider the net income ajusted by non cash IFRS 3 effects (Business Combination) the best net income indicator
3Q13 Results
24
A
B
C
Net effect of partial recognition of the second installment of CrediPronto’s earnout;
Non-recurring expenses: (R$ 1.6 million) restructuring charge and (R$ 0.5 million) bonus accrual referred to partial recognition of CrediPronto’s earnout;
Income Tax impact referred to partial recognition of CrediPronto’s earnout;
A
B
C
Net Income 3Q13 by segment
25
Launches Net Income Before IFRS
Net Margin (%)
17,512 (25%)
Amortization of intangible assets
6,365
Impairment
8,457
Taxes over intangible assets
1,531
Earnout impact
7,225
Call/put effect
11,315
Launches Net Income After IFRS
Net Margin (%)
22,761 (32%)
Earnout Impact
127
Amortization of intangible assets
4,589
Impairment
6,360
Pronto! Net Income after IFRS
Net Margin (%)
4,957 (17%)
Call/put effect
7,458
Pronto! Net Income Before IFRS
Net Margin (%)
8,575 (30%)
Net Income from launches 3Q13 (R$ Thousand)
Net Income from Pronto! 3Q13 (R$ Thousand)
26
3Q13 Results – Launches segment before IFRS
Launches EBITDA & Margin
Launches Net Income & Margin before IFRS
-37%
17.5
(25%)
3Q12 3Q13
27.6
(34%)
(R$ MM) (R$ MM)
24.6
(35%)
3Q12
34.8
(42%)
-29%
3Q13
27
3Q13 Results – Pronto! segment before IFRS
6.6
(27%)
11.7
(41%)
3Q12 3Q13
+77%
Pronto! EBITDA & Margin
Pronto! Net Income & Margin before IFRS
3Q12
3.8
(16%)
+123%
8.6
(30%)
3Q13
(R$ MM) (R$ MM)
EBITDA and Net Income
28
3Q12
42.3 (39%)
3Q13
38.2 (36%)
+42%
60.2 (46%)
-10%
21.9
EBITDA1
EBITDA Margin (%)
(R$ MM)
19.2
3Q12 3Q13
+45%
-30%
25.5 (23%) 17.8
(17%)
37.0 (30%)
Net Income Attributable to Controlling
Shareholders ex-IFRS 2
Net Margin (%)
(R$ MM)
1) Includes results from subsidiaries and companies under shared-control, in accordance with equity accounting, and results from non-controlling shareholders. Note: EBITDA is not an accounting measure and does not represent the cash flow for the reported periods, and therefore should not be used as an alternative to cash flow as a measure of liquidity. The Company’s EBITDA was calculated in accordance with CVM Instruction 52. a. 2) We consider the net income adjusted by non cash IFRS 3 effects (Business Combination) the most accurate net income indicator. 3) Non recurring: Partial recognition of the 2nd installment of CrediPronto's earnout, expenses related to CrediPronto's earnout and restructuring charge.
Non-recurring³ Non-recurring³
29
IFRS Impacts – Net Income before non-controlling shareholders
(1) Impairment of Goodwill and Intangible Assets from Acquisition. Since 2010, the acquisitions made by LPS Brasil are accounted by the “CAP” of “Earnout” amounts. Every year, as the CAP amounts are not confirmed by the performance of the companies, goodwill and intangible assets are impaired accordingly, with a counter-entry reducing the earnout amounts payable. (2) Amortization of Intangible Assets. (3) Combined effect from: i) Gains and Losses, with non-cash net effects, from the booking of call and put options at subsidiaries, based on the fair value of future estimates, and ii) non-cash correction/write-off of earnout installments payable. (4) Deferred income tax on intangible assets of LPS Brasil.
(5) Effects related to deferred income tax and amortization of intangible assets at non-controlling shareholders.
R$ Thousand
DescriptionBefore
IFRSIFRS Effects* After IFRS
Net Operating Revenue 128,806 128,806
Costs and Expenses -67,050 -14,817 -81,867 (1)
Non-Recurring Losses -1,602 0 -1,602
Depreciation and Amortization -3,859 -10,954 -14,813 (2)
Finance Result 3,886 25,871 29,757 (3)
Operational Profit 60,181 100 60,281 (1)+(2)+(3)
Income tax and social contribution -13,612 1,531 -12,081 (4)
Net Income 46,570 1,631 48,201 (1)+(2)+(3)+(4)
Non-controlling Shareholders -9,601 5,918 -3,683 (5)
Net Income attributable to
controlling shareholders36,969 7,549 44,518 (1)+(2)+(3)+(4)+(5)
* IFRS 3 non cash effects (business combination)
