Earnings Release Presentation - First Quarter 2010 (1Q10)

Earnings Release 1Q10May 07, 2010

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Earnings Release 1Q10

Rubens Menin

Opening Comments

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Growth with differentiated margins;

Largest operation in the housing program “Minha Casa, Minha Vida”, with 18% of the contracts under review of CEF;

Decreasing Cash Burn;

Business support – ready to keep growing

Highlights

Net Revenue (R$ million) Gross Profit (R$ million) and Gross Margin (%)

Net Income(R$ million) and Net Margin (%)

EBITDA (R$ million) andMargin EBITDA (%)

Consistency of Financial Results

272.5

568.5

-

100,0

200,0

300,0

400,0

500,0

600,0

1Q09 1Q10

108.7%

60.5

149.6

22.2%

26.3%

-

20,0

40,0

60,0

80,0

100,0

120,0

140,0

160,0

1Q09 1Q10

147.4%

49.0

115.9

18.0%

20.4%

-

20,0

40,0

60,0

80,0

100,0

120,0

140,0

1Q09 1Q10

136.4%

91.7

195.7

33.7%34.4%

-

50,0

100,0

150,0

200,0

250,0

1Q09 1Q10

113.4%


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Transfers CEF (units)

Real Estate Financing

Increasing volume of units under contracts with CEF

MRV is the largest partner of CEF in the housing program “Minha Casa, Minha Vida”

First homebuilder in Brazil to participate in the Pilot Project of CEF

Status Apr 13-2010

Under Analysis (units) 812,826 61,632 8%

00-03 MW 479,412 0

03-10 MW 333,414 61,632 18%

(VGV R$million) R$ 45,670 R$ 6,016 13%

Approved (units) 53,704

(projects) 289

Contracted (units) 408,674 22,612 6%

00-03 MW 203,997 0

03-10 MW 204,677 22,612 11%

(VGV R$million) R$ 22,800 R$ 2,217 10%

Source : Caixa, O Dia (04/18/2010) and MRV (04/20/2010)

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1,8422,553

3,709

4,702

697

2,539

5,092

8,801

0

1.000

2.000

3.000

4.000

5.000

6.000

7.000

8.000

9.000

10.000

1Q09 2TQ09 3Q09 4Q09 1Q10

Transfers

YTD


Constant financial discipline and reduction of the cash burn...

Cash Burn

Change in Net Debt

(R$ million)

6

100.6

123.8

0.1

89.8

75.9

1Q09 2Q09 3Q09 4Q09 1Q10


Shared Service Center

MRV Engenharia

Investing in people, processes and information technology....

BPM ECM GED

Cognos (Planning) SAP - BO (Cube) Microsoft (Report)

BI - Business Inteligence

RM - HR Management

Microsoft Dynamics

Microsoft Sharepoint

ECM - Content Management

ERP

Portal Colaboration

SAP ECC 6.0

MRV Obras

CRM

Client Relationship Management

New Organizational Chart

- Opening room for talents

Meritocracy

- New Stock Options Plan

Belo Horizonte Headquarter

- Lower Cost

- Edge on talent attraction

Talents

132 engineers and 315 trainees

Our People

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8

Land Bank

Launches

Contracted Sales

Inventories at Market Value

Productivity Index

Indebtedness and Net Debt

Unearned Results

Guidance

Operational and Financial Performance 1Q10

Operational and Financial Performance

... On March 31, 2010:

•Land bank of R$10,923.0 million

• 110,238 potential units

• Average price of R$99.1 thousand (focus on low income)

• 367 units per construction site (average)

... by financing source Mar/10

% swap / land cost % land cost/ PSV

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Land Bank (%MRV)

SFH - FGTS91%

SFH - SBPE

9%

Land Bank %MRV (R$ billion)

Swap43%

Cost9%

1Q10

... by price range in 1Q10


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1Q10

... by financing source in 1Q10

... in 1Q10

• Launches of 24 new projects

• PSV of R$606.1 million – 5,829 units

• 81% of the launched units are elegible to MCMV

Launches (%MRV)

SFH - FGTS81%

SFH - SBPE19%

Lançamentos %MRV (em R$ milhões)

268.5

606.1

-

100,0

200,0

300,0

400,0

500,0

600,0

700,0

1Q09 1Q10

125.7%

Below R$130,000

74%

Over R$130,000

26%

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Contracted Sales (%MRV)

... in 1Q10

• Total of R$732.7 million with sales

• 6,974 sold units

• Average Sales Speed of 16%

Contracted Sales%MRV (em R$ milhões)

... by price range in 1Q10

... by financing source in 1Q10

SFH - FGTS79%

SFH - SBPE21%

430.1

732.7

1Q09 1Q10

70.4%

Below R$80,000

9%

From R$80,001 to R$130,000

71%

Over R$130,000

20%

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Inventory distribution of units for saleper construction phase as of Mar/31/09

Inventory at Market Value 03/31/10 = R$ 1.5 billion

Inventory distribution of units for saleper financing source as of Mar/31/09


Inventory at Market Value (%MRV)

SFH - FGTS85%

SFH - SBPE15%

Construction not initiated

60%

Under costruction

37%

Finished3%

Selling Expenses

(R$ million)

Selling Expenses / Contracted Sales %MRV (%)

and Selling Expenses / Net Revenue (%)

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Productivity Index

24.8

35.8

0

5

10

15

20

25

30

35

40

1Q09 1Q10

44.2%

9.1%

6.3%

5.8%4.9%

0,0%

1,0%

2,0%

3,0%

4,0%

5,0%

6,0%

7,0%

8,0%

9,0%

10,0%

1Q09 1Q10

% Net Revenue

% Sales

G&A Expenses

(R$ million)

G&A Expenses / Contracted Sales %MRV (%)

and G&A Expenses / Net Revenue (%)

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Productivity Index

7.9%

5.3%

5.0%4.1%

0,0%

1,0%

2,0%

3,0%

4,0%

5,0%

6,0%

7,0%

8,0%

9,0%

1Q09 1Q10

% Net Revenue

% Sales

21.6

30.3

1Q09 1Q10

40.5%

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Debt Maturity Schedule

Loans and Financing and Net Debt


Composition of the Indebtedness Net Debt

(R$ million) mar-10 dec-09 Chg. %

Total debt 1,374.6 786.5 74.8% ↑

(-) Cash and cash equivalents (1,226.4) (714.0) 71.8% ↑

Net Debt (Net Cash) 148.2 72.5 104.5% ↑

Shareholder's Equity 2,509.8 2,392.9 4.9% ↑

Net Debt / Shareholder's Equity 5.9% 3.0% 2.9 p.p. ↑

91.6 120.9

359.3 359.9

280.8147.7

14.4

12 months 13 to 24 months 25 to 36 months Over 37 months

Debentures Construction Financing

mar/10 dec/09

Debentures - 1st Issuance

1st series 06/15/2013 CDI + 1.5% p.a. 279.1 272.6

2nd series 06/15/2013 IPCA + 10.8% p.a. 34.0 32.4

Debentures - 2nd Issuance 05/25/2011 CDI + 3.7% p.a. 101.1 101.2

Debentures - 3rd Issuance 02/01/2014 CDI + 1.6% p.a. 524.5 -

Construction Finance 04/01/2010 to 11/30/2013 TR + 8% to 12% p.a. 378.9 348.0

Working capital – CDI 12/29/2010 to 05/06/2012 CDI + 4.03% to 5.03% p.a. 63.2 35.0

Others 0.7 1.5

Expenses from debenture's issuance (7.0) (4.2)

1,374.6 786.5

CDI – interbank deposit rate

TR – a managed prime rate

IPCA – extended consumer price index

(R$ million) Maturity ChargesBalance Due

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Unearned Results


(R$ million) mar-10 dec-09 Chg. %

Unearned Sales Revenues 2,482.6 2,278.0 9.0% ↑

(-) Unearned Costs of Units Sold (1,304.9) (1,230.8) 6.0% ↑

Unearned Results 1,177.7 1,047.2 12.5% ↑

Unearned Results Margin 47.4% 46.0% 1.5 p.p. ↑

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Guidance 2009 / 2010


2010 Guidance

Contracted sales (%MRV) - R$ million 3,700 ~ 4,300

EBITDA Margin* 25% ~ 28%

* according to the accounting practices of 2009

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Disclaimer


The material that follows is a presentation of general background information about MRV Engenharia e Participações S.A. and its

subsidiaries (collectively, “MRV” or the “Company”) as of the date of the presentation. It is information in summary form and does

not purport to be complete. No representation or warranty, express or implied, is made concerning, and no reliance should be

placed on, the accuracy, fairness, or completeness of this information.

This presentation may contain certain forward-looking statements and information relating to MRV that reflect the current views

and/or expectations of the Company and its management with respect to its performance, business and future events. Forward

looking statements include, without limitation, any statement that may predict, forecast, indicate or imply future results,

performance or achievements, and may contain words like “believe,” “anticipate,” “expect,” “envisages,” “will likely result,” or any

other words or phrases of similar meaning. Such statements are subject to a number of risks, uncertainties and assumptions. We

caution you that a number of important factors could cause actual results to differ materially from the plans, objectives,

expectations, estimates and intentions expressed in this presentation. In no event, neither the Company nor any of its affiliates,

directors, officers, agents or employees shall be liable before any third party (including investors) for any investment or business

decision made or action taken in reliance on the information and statements contained in this presentation or for any

consequential, special or similar damages.

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The market and competitive position data, including market forecasts, used throughout this presentation was obtained from internal

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of this information or these reports are inaccurate in any material respect, we have not independently verified the competitive

position, market share, market size, market growth or other data provided by third parties or by industry or other publications. MRV

does not make any representation as to the accuracy of such information.

This presentation and its contents are proprietary information and may not be reproduced or otherwise disseminated in whole or in

part without MRV’s prior written consent.

Leonardo CorrêaChief Financial Officer

Mônica SimãoChief Investor Relations Officer

Felipe GonçalvesInvestor Relations Manager

Ph.: (31) 3348-7150

E-mail: [email protected]

www.mrv.com.br/ri

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