Embed Size (px)
DESCRIPTION
Apresentação Institucional 2T09
Citation preview
Institutional Presentation
August 2009
Disclaimer
This presentation does not constitute an offer, or invitation, or solicitation of an offer to subscribe for or purchase
any securities neither does this presentation nor anything contained herein form the basis to any contract or
commitment whatsoever.
The material that follows contains general business information about LPS Brasil – Consultoria de Imóveis S.A
(“Lopes”) as of the 30th of June 2009. It is not intended to be relied upon as advice to potential investors. The
information does not purport to be complete and is in summary form. No reliance should be placed on the
accuracy, fairness, or completeness of the information presented herein and no representation or warranty,
express or implied, is made concerning the accuracy, fairness, or completeness of the information presented
herein.
This presentation contains statements that are forward-looking and are only predictions, not guarantees of
future performance. Investors are warned that these forward-looking statements are and will be subject to
many risks, uncertainties, and factors related to the operations and business environments of Lopes and its
subsidiaries such as competitive pressures, the performance of the Brazilian economy and the industry, changes
on market conditions, among other factors disclosed in Lopes filed disclosure documents. Such risks may cause
the actual results of the companies to be materially different from any future results expressed or implied in such
forward-looking statements.
Lopes believes that based on information currently available to Lopes management, the expectations and
assumptions reflected in the forward-looking statements are reasonable. Lastly, Lopes expressly refuses any duty
to update any of the forward-looking statements contained herein.
2
Investment Highlights
3
Simple and Focused Value Added
Business Model
Main Distribution Channel in the Industry with a
National Footprint
Low Risk Business with a Diversified
Client Base : Cash Generator Company
Already scaled down to face new
market conditions in 2009
UnmatchedScale and Reach
Experienced Management Team
and Outstanding Track Record
Investment Highlights
4
Mr. Francisco Lopes initiates its activities intermediating properties
193540´s
50´s60´s
70´s
80´s
90´s
00´s
Launch one of the first buildings under the condominium concept
First TV advertisement for a real estate development
Start of long term partnership with Gomes de Almeida Fernandez (Gafisa)
Launch and sell of 14 office buildings at Av. Paulista
Launch and sell of 11 office buildings at the Faria Lima region
Creation of the launching system with sales stands and marketing materials, attracting customers specially during weekends
Identification of Marginal Pinheiros as an attractive area and launch one of the first buildings in the region
Start up of sales of hotel condominium (Flats)
Partner of Grupo Espírito Santo in selling one of the largest launching in Lisboa: Parque dos Príncipes
Introduction of the concept of condominium clubs
First “Top Imobiliário” award, in 1993 – Largest Brokerage Company
Lopes becomes an important player at the segment of gated communities
Triples in size in a decade, strengthening its leadership
Wins its 15th consecutive “Top Imobiliário”
Lopes’ IPO Lopes starts its geographic
expansion process Lopes’ website become
leader on real state market
The company’s first logo
Becomes reference in real estate launchings and presents its new logo
Brokerage Market Has No Other Company With The History and Track Record of Lopes
5
Lopes’ Operation
6
Lopes is exclusively focused on providing value-added real estate brokerage services to its client-developers, with a permanent concern of avoiding conflicts of interest
Formal relationship through exclusivity agreements
Over 160 Clients
– 46,393 effective buyers1
– 80,000 prospects included in our data base in 2007
Client-DevelopersClient-Developers Client-BuyersClient-Buyers
Ho
w d
o w
e d
o
Ho
w d
o w
e d
o
bus
ine
ss?
bus
ine
ss?
Ho
w d
o w
e m
ake
mo
ney?
Ho
w d
o w
e m
ake
mo
ney?
2, 3
2, 3
$ 0.53$ 0.12
$ 2.45
$ 100
$ 10
Total Price per Unit
Down-payment
GrossCommission
$ 0.73
$ 0.12
$ 1.05
Agents +Managers
Reve
nue
Rec
og
nition
Reve
nue
Rec
og
nition
$ 5
Developer
1 Over the last 5 years in Sao Paulo2 Figures only for example, not related to financials3 Considering Sao Paulo market
$ 1.90
$ 3.10
Net Commission Premium Contract Advisory Fee
Simple and Focused Business Model…
7
Lopes Net Commission
SP GVS / Consolidated GVS 100% 95% 80% 50% 42%
Net Commission São Paulo
Net Commission Brazil
2005 2006 2007 2008 2Q09
8
Lopes’ business is clearly fundamental to the profitability and returns of its clients…
Working Capital
Is FundamentalPre Sales
Speed of Sales Concentrated in
the Launch Period
Reliance on Sales Force Scale and EfficiencyReliance on Sales Force Scale and Efficiency
Speed of Sales is the Key
for Profitability
With a Key Role in the Real Estate Value-Chain
More than 5.000 brokers
Real Estate DevelopmentReal Estate DevelopmentBrazilian Market DynamicsBrazilian Market Dynamics
…and its scale and reach – nearly impossible to replicate – enhance this importance
9
Lopes is focused on providing its clients with a full range of consulting services, from land procurement advisory to product formatting, development and sale
Value-Added Services Across the Development Cycle
Determines Determines the Site’s the Site’s Vocation Vocation
Masters Masters Market Market
ResearchResearch
Formats Formats ProductProductMeeting Meeting Buyers’Buyers’
““Wants and Wants and Needs”Needs”
Develops Develops Marketing Marketing CampaignCampaign
Optimizes Optimizes Media Media
NegotiationsNegotiations
Coordinates Product
Launching Events
Individual Individual Sales Strategy Sales Strategy
Created to Created to Each Product Each Product
Coordinates Coordinates Product Product
Launching Launching EventsEvents
10
Competitive Advantage
Competitive Advantage: A single, integrated solid Company
“Lopes” culture in all business units of different states
National Integration of Systems
One single brand, recognized by the market
Identity that stands Lopes out from the competitors
11
Institutional Website
Evolution of visits to Lopes’ Website
Source: Google Analytics12
Notes: Managerial Reports.
Absorption calculated over available units
Location
Usable Area
Sales
Location
Usable Area
Sales
Location
Usable Area
Sales
Location
Usable Area
Sales
Location
Usable Area
Sales
100% sold in one day
Developer: Helbor.
CASE
100% sold within 10 days.Developer: Living / Cury.
CASE
100% sold in one day.Developers: Yuny.
CASE
85% sold within 2 months.Developer: Maxcasa.
CASE
65% sold within 8 months.Developer: Yuny.
CASE
Sales Expertise in all Market Segments
HIGH
MEDIUM-HIGH
MEDIUM
ECONOMIC
GATED COMMUNITIES
Ibirapuera / SP
322 to 367m²
Le Paysage – Oct / 08
24 un. – R$ 60,000,000
Campinas / SP
34 / 44 / 53 / 78 m2
Helbor Offices Norte Sul – Apr / 09
238 un. – R$ 45,000,000
São Miguel / SP
43 / 45 m2
Dez Vila Curuça – Jun / 09
252 un. – R$ 22,105,440
Vila Carrão / SP
96 to 206 m2
Lugano Club– May / 09
104 un. – R$ 42,150,000
Panamby / SP
70 m2
MaxHaus Panamby– Apr / 09
201 un. – R$ 55,000,000
13
Geographic Expansion
14
Lopes is Growing Nationwide
SOUTHEAST REGIONSão Paulo – Beginning of operations in 1935. Acquisition of 60% of Capucci &Bauer, in October 2007, for R$9 million (7.1x P/E 2008) and an earn-out payment.
Rio de Janeiro – Entry by greenfield operation, with beginning of operations in July 2006, with LCI-RJ.
Espírito Santo – Acquisition of 60% of Actual, in July 2007, for R$5.76 million (7.0x P/E 2008) and an earn-out payment.
Minas Gerais – Entry by greenfield operation with beginning of operations in February 2008.
SOUTHERN REGIONStates of Rio Grande do Sul, Santa Catarina and Paraná – Acquisition of 75% of Dirani, in May 2007, for R$15.1 million (7.5x P/E 2008) and two ear-out payments. In July 2008, Lopes acquired the 25% left by the call/put mechanism.
MIDDLE WEST REGIONFederal District – Acquisition of 51% of Royal, in November 2007, for R$12 million (9.0x P/E 2008) and an earn-out payment.
Goiás - Greenfield operation with beginning of operations in August 2008.
NORTHEAST REGIONBahia - Greenfield operation with beginning of operations in October 2007.
Pernambuco – Acquisition of 60% of Sérgio Miranda, in August 2007, for R$ 3 million (10.0x P/E 2008) and an earn-out payment.
Ceará – Acquisition of 60% of Immobilis, in January 2008, for R$2.4 million (10.0x P/E 2008) and an earn-out payment.
Lopes tracks developers’ regional movements, consolidates its position as the largest consulting and sales player
PR
RJ
BA
SP
RS
ES
SC
PE
MG
DF
CE
GO
15
Lopes’ Market Mix
São Paulo
Rio de Janeiro
Brasília
South
Northeast
Other*
*Other: Estpírito Santo, Minas Gerais and Goiás. 16
Lopes in the Low Income Segment
17
HABITCASA: Focus on Low Income Segment
Focus on Low Income Segment
Units up to R$ 180 thousand
Utilização da marca em todos os mercados de atuação da LopesThe Habitcasa brand is applied in all Lopes’ markets
18
Units SoldUnits Sold
Sales by Income Segment 2Q09
Total units sold = 8,321
Contracted GVSContracted GVS
Total Contracted GVS = R$2,183 million
The economic segment will be one of the most important drivers for the long term growth of the real estate industry, due to the Brazilian housing deficit of 8 million homes1.
1 According to Fundação Getúlio Vargas – FGV
19
Better Economic Situation of the Low Income Segment…
Monthly Income (Millions of Families) 2007 2008
Untill R$1,000 31.7 53% 29.1 31%
From R$1,000 to R$2,000 15.5 26% 27.6 29%
From R$2,000 to R$4,000 8.4 14% 21.8 23%
From R$4,000 to R$8,000 3.3 5% 11 12%
From R$8,000 to R$16,000 1.1 2% 4.3 5%
From R$16,000 to R$32,000 0.3 0% 1.3 1%
More than R$32,000 0 0% 0.3 0%
TOTAL 60.3 100% 95.4 100%
Source: “Minha Casa, Minha Vida” Program Source: FGV
Source: IBGE, FGV, Ernst & Young
20
2.2 3 4.99.3
18.425.2
3.8 3.95.5
7
6.9
10.2
2003 2004 2005 2006 2007 Savings untill Oct 2008 FGTS untill Nov 2008
Financed with FGTS' Funds Financed with Savings' Funds
Housing Credit (R$ billions)
Housing(‘000)
Total of houses
New houses formed
New houses financed
% of new houses
financed
2002 48,035 1,530 83 5%
2003 49,710 1,675 104 6%
2004 51,752 2,042 112 5%
2005 53,114 1,362 101 7%
2006 56,610 1,496 151 10%
2007 56,343 1,733 166 10%
... and also Better Supply of Mortgages
Source: ABECIP, Central Bank of Brazil, CEF e FGV
Source: IBGE, BC
21
Increase in the Potential Demand
Maturity in years
10 15 20 25 30
12% 13 11 10 10 9
11% 13 10 9 9 9
10% 12 10 9 8 8
9% 12 9 8 8 7
8% 11 9 8 7 7
7% 11 8 7 6 6
6% 10 8 7 6 6
5% 10 7 6 5 5
Maturity in years
10 15 20 25 30
12% 1,377 1,152 1,057 1,011 987
11% 1,322 1,091 991 941 914
10% 1,269 1,032 926 872 842
9% 1,216 974 864 806 772
8% 1,165 917 803 741 704
7% 1,115 863 744 679 639
6% 1,066 810 688 619 576
5% 1,018 759 634 561 515
Unit ValueR$120,000
MortgageR$96,000
30% of income commitment
80% of the total value financed
In Minimum Wages Monthly Payment (R$)
22
Lopes in the Secondary Market
23
The Secondary Market
Source: ITBI, Gafisa prospectus, Cushman Wakefield report, team analysis
118
Primary
Secondary
100%
(Total in R$ billion, % of total potential sales value)
Real estate market by segment
In the city of São Paulo, the difference is as high as 30% ~ 50%
Difference (in %) between the average price per m² in new development vs. used properties
24
Pronto!’s Business Model
Capillarity and greater expansion to all Regions
Conversions
Franchises
Owned Stores
Pronto! present in 11 Brazilian States, and in the Federal District. It has 48 Stores, 29 of which in the city of São Paulo.
25
Pronto! One Stop Shop Concept
One Stop Shop
Purchasing/Selling your property
+Financing
26
CrediPronto!
27
Strengthening of mortgage origination and other related services.
Leadership position in their respective
markets
Management Excellence High Value Brands
Joint Venture Lopes Itaú
Establishment of a Promotion Sales Company (non-financing company) to promote and offer financial products and services – mortgage and other related – with emphasis on the secondary market and with
exclusivity to Lopes’ clients
Direct and exclusive access to its customer database
Seamlessly integrated operation with Lopes’ sales process, including an incentive compensation plan
Lopes media exposure
Service excellence Competitive financing terms and
conditions Speed and quality of processing Experienced credit analysis Successful exposure to the lending
business and in joint ventures
28
CrediPronto!
Foco no Mercado Secundário
Efficiency on releasing mortgages;
Agility and perception of a non-financial institution; and
Lower process costs.
Focus on the Secondary Market
Opportunity to work in the Primary Market with small Developers
Competitive Advantages
29
Innovative Real State Financing Process
The deadlines mentioned are linked to the complete delivery of the documentation and they can change in case of any restrictions.
CrediPronto!
30
Synergies Between Credipronto! and Pronto! – Competitive Advantage
31
Easy Credit
Access
(Financing)
Distribution
Channel
Pronto! and CrediPronto! acting together create a competitive advantage that is hard to replicate.
CrediPronto!
94.6
147.9
Accumulated Mortgage Inventory in 2008 and 1H09:
-GVS: R$148MM;-Volume Financed: R$95MM
- Contracts: 321
CrediPronto!’s FinancingCrediPronto!’s Financing
(R$ MM)
32
Brazilian Real Estate Market
33
Social Economic Scenario and Housing Shortage
5,4
6,7
1991 20062000
7,9
Source: Fundação João Pinheiro e Ministério das Cidades
Source: Credit Suisse
47 million homes
19%A/B > 10 minimum wages- US$ 1.900 52%
5 – 10 minimum wages- US$ 950 - US$ 1.900
30%C 28%
< 5 minimum wages - US$ 950
51%D/E 20%
Source: Losango
* Qualitative Housing Shortage is the number of times that a family moves to different houses in life
Age Pyramid in Brazil Segments by Income in Brazil
Quantitative Housing Shortage(millions of homes) Qualitative Housing Shortage
Source: IBGE
34
AAA
AAA
AA
A+A+
A
A-
BBB+
BBB-BBB-
BBB+
Mortgage Market as a % of GDP
Mortgage Market and the Investment Grade
Source: Lopes, FMI, S&P and Santander
X Rating S&P
35
Number of Launches - RMSP
GVS¹ Launched (R$ bn) - RMSP
Units Launched (‘000) - RMSP
¹ Launched values adjusted by the INCC until June/09.
1996 1997 2006 2007 2008
Nominal GVS launched in 2008 was the same amount as 2007: R$ 20 bn.
20,6
Launches RMSP – Historic data (1996 - 2008)
Source: Lopes’ Market Intelligence*2009E – 1997 + GDP growth or similar amount of 2006 (GDP growth – CAGR with data from IBGE, GDP of 2008 was annualized).
2009E*
36
1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008
+14%
1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008
+37%
1H09 1H09
R$/m2
SPMR Real Estate Market Overview – Prices
Source: EMBRAESP
Nominal
INCC Adjusted
Evolution of Average Launches’ Prices in the SPMR
R$/m2
37
Factors that Sustain the Growth in the Real State Market
38
Lopes’ Confidence Index
39
116,9
Lopes’ Confidence Index intend to measure clients confidence, so Lopes can follow and anticipate, in the short term,
housing purchase tendency.
The sample has 585 interviews, with Grande São Paulo resident clients, which contacted Lopes in the last 3 months and
are interested in purchasing a new home.
Lopes’ Confidence Index (LCI) July/09
(base: jan/2009=100)Source: Lopes Market Intelligence
Lopes’ Confidence Index (LCI) - July/09
Lopes is the first company to create a Real Estate Consumer Confidence Index.
40
+42%
The scenario is positive when compared the present purchase intention with the purchase intention for the next 6 months, for
all segments.
The factors that show the optimism for the future are:
•the perception about the Brazilian economic situation in the next 6 months; and
•the purchase intention for the next 6 months.
116,9
Lopes’ Confidence Index by Segment
Low Income
Medium-High
High
41
(base: jan/2009=100)Source: Lopes Market Intelligence
Lopes’ Confidence
Index
Present Situation Index
Expectation Index
39%
49%43%
Operational Highlights
42
Operating Performance
43
2007 2008
Launches
Contracted Sales
Market Value (R$ million)
States
Headcount
Independent Brokers
9,285
5,221
4,873
348
11
1,683.5
508
4,993
21,260
10,099
9,370
728
13
563
5,799
Secondary Market
Primary Market
1H09
4,535
3,595
3,359
235
11
519.2
699
5,495
326.4
Contracted Sales’ Historical*
* Unaudited managerial information.
Total GVS – Primary Market(in R$ million)
CAGR: 36%
44
Contracted Sales
(R$ MM)
Contracted Sales
3,279
1,441
55%
2,183
45
Units Sold per Region and per Income Segment
Sales per Segment(in units)
Sales per Region(in units)
46
Sales Speed over Supply
Brazil Consolidated Sales Speed Lopes+HabitCasa
*Management information,The Sales Speed over Supply is obtained based on the quarter’s contracted GVS compared to inventory and launches.
Habitcasa’s Sales Speed
47
Financial Highlights
48
2Q08
2Q09
Net Commission by Market
Net Commission Net Commission
49
2Q09 Results(R$’000)
LOPES PRONTO! CREDIPRONTO! CONSOLIDADO
Net Revenue 51,727 1,792 366 53,885
Operating Costs and Expenses (29,438) (1,738) (905) (32,081)
Stock Option Expenses (CPC 10) (824) - - (824)
Expenses accrual from Itaú (238) - - (238)
Pro-Forma EBITDA 22,051 55 (540) 21,566
Pro-Forma EBITDA Margin 42.63% 3.07% -147.69% 40.02%
Pro-Forma Net income 11,223 (242) (133) 10,849
Pro-Forma Net Margin 21.70% -13.47% -36.38% 20.13%
Without Pronto! and CrediPronto!’s effects, Lopes’ EBITDA would’ve been
R$22.1 million, with a 43% margin, and a Net Income of R$11.2 million, with a 22%
margin.
Brasília had a R$6.9 million Income, while Campinas had a R$2.8 million Income, what explains the Minority
Interests of R$5.7 million.
Results 2Q09
50
Costs of Services Provided and Operating Expenses
Operating Costs and ExpensesOperating Costs and Expenses
(R$ MM)
Other R$2.6MM
Itaú‘s expenses accrual R$0.2 MM
Depreciation R$1.6 MM
Stock Option(CPC 10) R$0.8 MM
Other
51
55%
18%
Primary Market Costs and ExpensesPrimary Market Costs and Expenses Net RevenueNet Revenue
Operational Leverage as a basic premise for growth.
Result: Net Income Pro Forma increase of 246% with a 20% Margin.
Operational Leverage
(R$ MM) (R$ MM)
52
Guidance for 2009
53
Sales’ Guidance for 2009
(R$ MM)
* The General Value of contracted sales (Contracted GVS) projected in this release may change due to many variables. This material fact includes forward looking statements related to business perspectives, results estimates and, also, the growth outlook for Lopes. Such forward looking statements may be substantially affected by changes in market conditions, government decisions, stronger competition, industry performance as well as Brazilian economy performance, in addition to those risks presented in the documents released and filed by Lopes, consequently, they are subject to changes without previous notice. 54
Additional Information
55
Two seasonality components:
• Natural variation in sales related to holidays or vacation periods over the year. The first quarter is more significantly affected by summer vacations and the week of Carnival celebrations.
• Variations in sales stemming from the sales pipeline in the real estate development market, in which projects launched are subject to licensing and permit requirements, which account for significant distortions in a quarter-over-quarter comparison.
Lopes’ Contracted Sales Seasonality
Unstable sales behavior in each quarter accounts for variations in yearly sales
56* The seasonality can not be verified in 2008, because of the effects of the world financial crises.
Ownership Structure
Total of 49,448,033 common shares
Ownership Structure Post-IPO
57
Institution Analyst Contact
Agora Cristiane Viana (+55 21) 2529-3393 [email protected]
Banco Espírito Santo TBD -
Credit Suisse Marcelo Telles (+52 55) 5283-8933
Itaú David Lawant (+55 11) [email protected]
Link Celso Boin Jr. (+55 11) 4505-6701 [email protected]
Planner Ricardo Martins (+55 11) 2172-2600 [email protected]
UBS Pactual Rodrigo Monteiro (+55 21) 3262-9208 [email protected]
Coin Valores Marco Barbosa (+55 11) [email protected]
Analysts Coverage
58
