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Company Presentation - 1st semester 2014

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  • 1. 1st SEMESTER 2014
  • 2. A NEW BRAZILIAN COMPANY IN THE REAL ESTATE BROKERAGE BUSINESS OWNED BY THE MANAGEMENT LISTED IN THE SÃO PAULO STOCK EXCHANGE BOVESPA DXXI3 WHO IS DUXXI?
  • 3. VISION, MISSION & VALUES MISSION Marketing of real estate with a deeper understanding of what buyers seek and what assets mean to them, through the work of most qualified professionals and innovative, efficient and effective processes BRAND VALUES Ethics, dedication, long-term commitment, human development, innovation and owned by the management VISION To transform the purchase of real estate into a rewarding, secure and enjoyable experience for both the buyer and the seller
  • 4. TO THE BRAZILIAN REAL ESTATE BROKERAGE MARKET BUSINESS MODEL THAT VALUES EFFICIENCY TALENT AND TECHNOLOGY OVER VOLUME EXPERIENCED TEAMS NO TIES TO PAST MODELS AND NO LIABILITIES OR LEGACY COSTS Headquartered in São Paulo, we offer services for commercial and residential properties for all classes and we bring true value to our clients, brokers and investors NEW COMPANY NEW BEGINNING NEW APPROACH
  • 5. ECONOMIES’ GROWTH DYNAMICS 2013 GDP GROWTH Q1 2013 China Turkey Japan South Korea Chile Brazil Canada Australia UK Colombia USA South Africa Poland Mexico Germany France Euro Zone Russia Spain Italy -1 -0,5 0 0,5 1 1,5 2 1.6 1.6 1.0 0.8 0.8 0.6 0.5 0.5 0.3 0.3 0.3 0.2 0.2 0.0 0.0 -0.2 -0.2 -0.3 -0.4 -0.6 GDP GROWTH Q2 2013 Turkey China Brazil South Korea Japan South Africa Germany UK USA Australia France Chile Canada Poland Euro Zone Spain Russia Italy Mexico -1 0 1 2 3 2.1 1.7 1.5 1.1 0.9 0.7 0.7 0.7 0.6 0.6 0.5 0.5 0.4 0.4 0.3 -0.1 -0.3 -0.3 -0.7 6TH LARGEST GROWTH 3TH LARGEST GROWTH Source: BACEN
  • 6. BRAZIL’S SOCIAL & ECONOMIC SCENARIO BRAZIL IS NO LONGER AN ECONOMIC PROMISE. IT’S A REALITY 5% REGIONAL POPULATION AND GDP THE SOUTHEAST REGION (SP, RJ, MG & ES) CONCENTRATES MORE THAN HALF OF BRAZIL’S GDP POP. GPD 14.3% 16.5% 2013 GPD US$ 2,2 Trillion POP. GPD 8.4% 5.3% POP. GPD 27.8% 13.5% POP. GPD 7.4% 9.3% POP. GPD 55.4% 42.1% 5% AGRICULTURE SERVICES 69% 26% INDUSTRIES SOURCE: IBGE
  • 7.  Brazil presented fast growth from 2000 to 2010, and although this pace has slowed, the domestic economy continues to growth despite the unstable world scenario  Per capita GDP rose significantly between 2000 and 2010, increasing real household income  Interest rates and controlled inflation facilitated access to credit market growth of 7% - 8% p.a.  The value of real estate assets should increase at an average annual rate of 4% until 2030 (in real terms) GDP Growth 1.3% 2.7% 1.2% 5.7% 3.2% 4.0% 6.1% 5.2% - 0.3% 7.5% 2.7% 0,9 4.3% 2000 2010 7,010 11,127 Interest Rates and Inflation Evolution 0.0% 5.0% 10.0% 15.0% 20.0% 25.0% IPCA SELIC Per Capita GDP: US$
  • 8. TOTAL INHABITANTS AGE GROUP PYRAMID Source: IBGE BRAZIL’S SOCIAL & ECONOMIC SCENARIO
  • 9. SOCIAL CLASS POPULATION DISTRIBUTION Sources:IPEA/PNAD(IBGE) A CB D-E 6,4 10,5 6,4 10,5 65,9 100,3 96,2 69,6 Recently Brazil has become a nation with 50% of its population belonging to the middle class, with a great potential for consumption. The richest classes (A and B) have also registered significant growth. 2003 2011 Total: 175 MM Total: 195 MM Classes:
  • 10. BRAZIL’S REAL ESTATE MARKET 2013 A 2/3 DECREASE IN HOUSING DEFICIT IN BRAZIL WILL COST R$18B PER YEAR UNTIL 2030 SOURCE: E&Y/SBPE/CAGED/Sinduscon/FGV 201.032.714 INHABITANTS 1.26 MILLION JOBS (2.8% ABOVE 2012) 5.7% OF BRAZIL’S GDP R$109.2 BILLION (approx. US$50 BILLION) INVESTED CREDIT IN REAL ESTATE, 32% MORE THAN 2012 529.8 THOUSAND UNITS FINANCED – 17% INCREASE OVER 2012
  • 11. Unemployment (%) Sources:IBGE,Bird,Febraban,FGVandCBIC-CâmaraBrasileiradaIndústriadeConstrução BRAZIL’S REAL ESTATE MARKET 12.5% 9.8% 9.3% 8.1% 6.0% 5.7% 1.43 1.48 1.53 1.54 1.63 1.67 1.76 1.82 1.86 1.88 Actual Efficiency (R$ THOUSANDS) Unemployment X Actual Efficiency
  • 12. Demand for New Homes During Period (millions) 36.9 Demand for New Homes/Year (millions/year) 1.6 Necessary Investments in Homes (R$ millions/year) 194,500 Estimated value of Housing Stock (R$ million) 1,967,000 Annual Investments for Replacement (R$ million) 59,010 Total investments to reduce the deficit by 2/3 by 2030 (R$ million) 420,919 Annual Investments (R$ million) 18,301 HOUSING DEFICIT Replacement of Homes DEMOGRAPHIC CHANGES Main housing demand factors will generate an approximate investment requirement of R$ 271 billion per year What it is (2013) R$ 222 bn What it Should Be R$ 271 bn/year Real Estate Sector’s GDP BRAZIL’S REAL ESTATE MARKET
  • 13. 258 261 260 267 267 277 282 293 298 308 317 338 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013P What it is (2013) R$ 222 bn What it Should Be R$ 271 bn/year Real Estate Sector’s GDP 133 127 146 145 146 158 169 184 215 225 213 222 1.7% 1.6% 1.8% 1.4% 1.6% 1.7% 2.1% 2.8% 4.8% 6.4% 3.7% 7.9% BRAZIL’S REAL ESTATE MARKET
  • 14. BRAZIL’S REAL ESTATE MARKET Launches by Region Brazil – 2012 79,9 million / 183 thousand units 28.5 11.1 3.9 3.3 3 2.7 2.4 2.2 2 2 1.9 1.5 0.711.11.3 10.8 Sources:IBGE,Bird,Febraban,FGVandCBIC-CâmaraBrasileiradaIndústriadeConstrução
  • 15. Real estate financing/GDP (%) Brazil 2011 / others 2010 Access to Mortgage Lending (% by Income Group) Absolute Housing Deficit 1997 - 2011 85% 63% 63% 62% 61% 60% 52% 41% 36% 23% 22% 16% 10% 5% 5% A & B Groups C Group D Group E Group 7.7% 5.0% 3.0% 1.7% Southwest Northwest North South Midwest 34.33% 33.47% 12.97% 12.56% 6.68% Sources:IBGE,Bird,Febraban,FGVandCBIC-CâmaraBrasileiradaIndústriadeConstrução BRAZIL’S REAL ESTATE MARKET
  • 16. BRAZIL’S REAL ESTATE MARKET Income Groups Population from 18 to 64 yearsNumber of Families by Income Group (million) Growth 2007 - 2030 Sources:IBGE,Bird,Febraban,FGVandCBIC-CâmaraBrasileiradaIndústriadeConstrução 2030E2007A A, B & C Groups D & E Groups The demographic dividend combined with the expansion of the economy will allow the migration of 35.6 million people from the actual D and E Social Class to A, B and C in the next 10 years. It is reasonable to assume that these new social configuration will certainly boost the demand for housing 15.5 8.4 3.3 1.1 0.3 29.1 27.6 21.8 11.0 4.3 1.6 31.7 (8%) 78% 160% 233% 291% 433% Less than R$ 1K R$ 1K to R$ 2k R$ 2K to R$ 4k R$ 4K to R$ 8k R$ 8K to R$ 16k More than R$ 16k 36% 64% 2009 18% 82% 2020E
  • 17. THE REAL ESTATE BROKERAGE MARKET IS STILL PLAYED THE OLD FASHIONED WAY
  • 18. MUCH HAS CHANGED OVER THE LAST 10 YEARS Traditional Model Key Challenges  Companies need to explore new and smarter ways to sell inventories and launches THE TRADITIONAL MODEL CANNOT KEEP UP WITH THE NEW DEMAND  M&A Based Models and/or Family run businesses  Ordinary sales approach  Offline communications  Lack of investment in technology and processes  Low/no business intelligence  Unfocused operations/sectorized organization  Real Estate is still a favorable market: only the best players will succeed  Real Estate IPO boom drove the industry to higher inventory levels;
  • 19. IT'S TIME TO THE BRAZILIAN MARKET REINVENT
  • 20. 3 SALES FORCE  Market intelligence department  Highly trained teams / client management guidance  Well defined incentives; commissioning + benefits  Enhanced capacity to attract efficient salesforce CAPACITY TO ATTRACT AND RETAIN THE BEST SALESTEAM IN THE INDUSTRY 1 PROCESS  Integrated front end; sales front + ERP+ CRM  Streamlined process; qualified team + contract cycle management  Dynamic monitoring salesteam activities FOCUS ON CONTINUOUS IMPROVEMENT 2 ONLINE TOOLS  Reversed approach versus traditional sales  Clients will filter options on the website BEFORE reaching to sales team  Intelligent tool: geolocation, local convenience (hospitals, malls, schools, convenience stores,etc) ENABLES DEEP KNOWLEDGE ON CUSTOMER BEHAVIOR 4 Capacity to offer tailor-made projects and to address new industry demands CONSISTENT AND PLANNED SALES STRATEGY
  • 21. BUSINESS STRATEGY READY FOR NEW LOCAL CHALLENGES OBJECTIVE OUR GOAL IS TO BECOME ONE OF TOP 3 COMPANIES IN THE BRAZILIAN MARKET IN THE NEXT 10 YEARS 1 TECHNOLOGY ONLINE SALES TOOLS AND SMART INTERFACES WITH CLIENTS AND BROKERS 2 PROCESSES INNOVATIVE TOOLS WILL ALLOW A LOW COST OPERATION WITH EFFICIENCY, QUALITY TO MAXIMIZE RESULTS 3 TALENTS KEY MANAGERS ARE ALSO STOCKHOLDERS AND BROKERS ARE RECRUITED FROM THE BEST IN THE MARKET
  • 22. STRATEGIC SHIFT IN MARKET PARADIGMS USER FRIENDLY INNOVATION WORLD WIDE WEB IS THE NEW MARKET PLACE FOR ADVERTING AND MARKETING REAL ESTATE PROPERTIES DUXXI WILL LEVERAGE ON A GROUND-BREAKING ONLINE STRATEGY AND REINVENT THE BUSINESS MODEL FOR DOING BUSINESS OVER THE INTERNET WITH NEW SEARCHING, PRICING AND COMPARING CAPABILITIES
  • 23. STRATEGIC SHIFT IN MARKET PARADIGMS OPERATION EXCELLENCE DUXXI IS PLANNING, DEVELOPING AND STRUCTURING THE MOST EFFICIENT OPERATIONAL PROCESSES, BUILT UPON THE BEST INDUSTRY PRACTICES IN A NEW, FAST GROWING MARKET, IT’S EASY TO BE OVERWHELMED BY THE VOLUME OF BUSINESS COMING IN WE AIM HAVING THE LOWEST COST OPERATION, HIGHEST EFFICIENCY AND QUALITY PROCESS TO MAXIMIZE RESULTS AND COMPETITIVENESS
  • 24. DUXXI IS A NEW, FULL-SERVICE COMPANY FOUNDED, OWNED AND MANAGED BY SOME OF THE MOST SUCCESSFUL PROFESSIONALS IN THE BUSINESS UNITED BY THE SAME PRINCIPLES AND VALUES STRATEGIC SHIFT IN MARKET PARADIGMS FOUNDED AND MANAGED BY OWNERS A BUSINESS IS FORGED THROUGH INNOVATION, HARD WORK AND FACE-TO-FACE RELATIONSHIPS BY ATTRACTING TALENTS AS SHAREHOLDERS, WE ENSURE LOYALTY AND LONG TERM COMMITMENT TO OUR PROJECT
  • 25. FINANCIAL POSITION & CORPORATE GOVERNANCE  Board of directors (3 to 8 members, at least 1 independent)  Listed in BM&FBovespa  Audited by PWC  Quarterly financial reports  IFRS Accounting Standards  ERP system installed: Senior  Proprietary sales management  Legal Advisor: Levy & Salomão
  • 26. OPERATIONAL SCHEDULE Foundation and listing on BOVESPA & CVM Business Plan prepared by E&Y Senior Management Hired Headquarters and operational offices setup Supera IBG starts BPO mapping CRECI brokerage license obtained Brokers team trained and certified Infrastructure and systems implemented Offices in São Paulo, Campinas and Alphaville inaugurated Sales operations Started Office in Santos Inaugurated Expectations to inaugurate new offices SEP 13 NOV 13 FEV 14 FUTUREDEZ 13OCT 13AUG 13 PRIOR TO JUL 13
  • 27. ri@duxxi.com.br www.duxxi.com.br +55 11 3199 5000