2Q13 Apresentation

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  • 1. 2Q13 R Conferen August 12
  • 2. Safe-Harbor Statement We make forward-looking statements that are subject to risks and uncertainties. These statements are based on the beliefs and assumptions of our management, and on information currently available to us. Forward-looking statements include statements regarding our intent, belief or current expectations or that of our directors or executive officers. Forward-looking statements also include information concerning our possible or assumed future results of operations, as well as statements preceded by, followed by, or that include the words ''believes,'' ''may,'' ''will,'' ''continues,'' ''expects,'‘ ''anticipates,'' ''intends,'' ''plans,'' ''estimates'' or similar expressions. Forward-looking statements are not guarantees of performance. They involve risks, uncertainties and assumptions because they relate to future events and therefore depend on circumstances that may or may not occur. Our future results and shareholder values may differ materially from those expressed in or suggested by these forward-looking statements. Many of the factors that will determine these results and values are beyond our ability to control or predict. 1
  • 3. Recent Events – Gafisa S.A. Enters Into Agreement to Sell 70% Stake in Alphaville to Blackstone and Pátria ▲ Gafisa S.A. signed an agreement to sell a majority stake in Alphaville, valuing AUSA at R$2.01 billion. ▲ Sale transaction to generate expected gross cash proceeds of R$1.4 billion ▲ Proceeds to strengthen Gafisa’s balance sheet by reducing leverage and generating long-term shareholder value ▲ Transaction to allow shareholders, through the 30% remaining stake in Alphaville, to participate in the long-term value creation produced by partnering with two leading investment firms ▲ Opportunity to unlock significant value generated under Gafisa’s stewardship since the acquisition in 2006 ▲ Cash proceeds will reduce leverage, allowing increased focus on operating performance ▲ Gafisa also agreed to complete the purchase of the outstanding 20% stake in Alphaville which it did not already own, finalizing the arbitration process for a total consideration of R$367 million, 2
  • 4. Second Quarter Highlights ▲ 2Q13 sales of R$554 mm exceeded launches of R$461 mm and increased q-o-q ▲ Sequential improvement in SoS on higher gross sales and fewer dissolutions ▲ 1H13 unit deliveries represented 30% of guidance midpoint ▲ Performance of new Tenda launches sound and in line with the Company’s expectations ▲ During the 1H13, Gafisa Group expanded its landbank in order to support future growth, with acquisitions of R$1.0 billion in PSV ▲ At the end of June, the Company had R$1.1 billion in cash and cash equivalents 3
  • 5. Gafisa Segment – Status of the Turnaround Strategy Gafisa’s brand increasingly focused on Strategic Markets Gross Margin per Market (2011-1S13) Net Revenue per Market ▲ Gafisa’s operations in strategic markets, especially SP, are performing well. However, on a consolidated basis, margins continue to be impacted by non-core markets 4 20% 18% 8% 20% 17% 13% 60% 65% 79% 2011 2012 1H13 Other markets RJ SP -70.0% -50.0% -30.0% -10.0% 10.0% 30.0% 50.0% 2011 1Q12 2Q12 3Q12 4Q12 2012 1Q13 2Q13 1H13 SP RJ Other markets
  • 6. Gafisa Segment - Status of the Turnaround Strategy ▲ Delivery of legacy projects is in line with guidance and should conclude by year-end. Currently, 3 projects remain under construction, with delivery scheduled for 2H13. Only 1 project (4 phases) is scheduled for 2014 Construction Execution per Market (2Q13-4Q15) 5 25% 19% 14% 17% 0% 14% 13% 9% 4% 0% 61% 68% 77% 78% 100% 2011 2012 2013E 2014E 2015E Other markets RJ SP 28% 18% 8% 9% 0% 15% 17% 16% 5% 0% 57% 66% 76% 86% 100% 2011 2012 2013 2014 2015 Other markets RJ SP Other markets data 2011 2012 2013 2014 2015 Number of phases/works 30 14 6 4 - Other markets data 2011 2012 2013 2014 2015 Units 6,300 2,714 720 360 - Projects/Phases Units
  • 7. 227 546 114 814 101 217 1Q12 2Q12 3Q12 4Q12 1Q13 2Q13 Descontinued markets Strategic markets Launches per Market (1Q12-2Q13) Gross Sales per Market (1Q12-2Q13) 9 47 48 26 65 48 42 71 123 75 127 90 1Q12 2Q12 3Q12 4Q12 1Q13 2Q13 Descontinued markets Strategic markets Resale of Cancelled Units (1H13)Dissolutions per Market (1Q12-2Q13) 27 55 46 56 48 63 340 520 453 544 244 291 1Q12 2Q12 3Q12 4Q12 1Q13 2Q13 Descontinued markets Strategic markets 40% 56% 21% SP RJ NM Gafisa Segment - Status of the Turnaround Strategy 6 ▲ Concentration of Launches and Sales in strategic markets ▲ Dissolutions gradually reducing, and should reach normalized levels
  • 8. Tenda Segment - Status of the Turnaround Strategy 0 5,000 10,000 15,000 20,000 25,000 30,000 35,000 4Q11 4Q12 1Q13 2Q13 3Q13 4Q13 1Q14 2Q14 3Q14 4Q14 2015 0 20 40 60 80 100 120 Units under Construction Sites Continued progress in the conclusion and delivery of Tenda legacy projects 600 650 700 750 800 850 900 950 4Q11 1Q12 2Q12 3Q12 4Q12 1Q13 2Q13 Legacy Inventory 7 units units R$ million
  • 9. Gross Sales (4Q11-2Q13) Dissolutions (4Q11-2Q13) 14 12 10 11 7 2Q12 3Q12 4Q12 1Q13 2Q13 Tenda – Financial Cycle (2Q2-2Q13) ▲ Dissolutions continue to decline as Tenda concludes the units of legacy projects, developed out of the new fundamentals, and transfer them to financial institutions Note: 61% of 1H13 cancelled units were already resold within the quarter Tenda Segment - Status of the Turnaround Strategy 467 340 329 264 318 232 158 4Q11 1Q12 2Q12 3Q12 4Q12 1Q13 2Q13 248 249 345 294 288 239 328 4Q11 1Q12 2Q12 3Q12 4Q12 1Q13 2Q13 NEW LAUNCHES LEGACY PROJECTS 8 4 ▲ Tenda’s financial cycle is sound. The average time has been halved to 7 months in the 2Q13, from 14 months in the same period last year ▲ In 2Q13, the financial cycle (average time between sale, unit transfer and registration) for new launches was around 4 months
  • 10. Launches resumed under new business fundamentals Tenda Segment - Status of the Turnaround Strategy Chart 5. Tenda New Launches Under Fundamentals Launches 1H13 Novo Horizonte Vila Cantuária Itaim Paulista Life Launches mar-13 mar-13 may-13 PSV Launches (R$ mil) 67.755 45.941 33.056 # Units Launched 580 440 240 % PSV Units Sold¹ 77,7% 22,1% 26,5% % Units Transferred² 37,6% 8,0% 0,0% Project Osasco - SP Camaçari - BA São Paulo - SP ¹In July 2013, the % of units sold reached 92% (Novo Horizonte), 29% (Vila Cantuária) and 28% (Itaim Paulista Life). ²In July, the % of units trasferred was 62% (Novo Horizonte), 17% (Vila Cantuária) and 0% (Itaim Paulista Life). 9 Information regarding Tenda’s launches on 1H13
  • 11. 86% 55% 81% 14% 45% 19% Gafisa Tenda Alphaville Under construction Concluded units Inventory distribution by Construction Status, Launch Year and Market Inventories BP1 1Q13 Launches Dissolutions Pre-sales Price Adjustments + Others5 Inventories EP2 2Q13 % Q/Q3 SoS4 Gafisa (A) 1,921,120 215,910 137,674 (354,585) 87,690 2,007,810 5% 9.8% Alphaville (B) 808,927 212,077 59,350 (226,237) 32,248 886,365 10% 15.8% Tenda (C) 772,992 33,056 157,848 (327,689) 43,492 679,699 -12% 20.0%% Total (A)+(B)+C) 3,503,039 461,043 354,872 (908,511) 163,430 3,573,874 2% 13.4% Note: * 1) BP beginning of period – 1Q13. 2) EP end of period – 2Q13. 3) % variation 2Q13 vs. 1Q13 4) Sales speed on 2Q13. 5) Cancelled projects in the period Inventories at Market Value at 2Q13 x 1Q13 (R$ 000) Inventory at market value per construction status 84% 16% SP and RJ Other Markets 88% 12% Legacy Projects New Projects Gafisa segment- Inventory at market value per market Tenda segment - Inventory at market value by vintage 10
  • 12. Classification of Alphaville as held for sale, with the retention of associate non-controlling interest Given the impending sale of a 70% stake in Alphaville and associated transfer of operations to the buyers, these assets have been classified as held for sale 1H13 Official Numbers Versus Non-Audited Reconciliation R$000 Official 1H13 Adjustments Pro-Forma 1H13 Income Statement Amounts posted 06.30.13 Impact of adopting CPC 18(R2), 19 (R2) and CPC 36 (R3) Impact of adopting CPC 31 Excluding the impact of the effects mentioned Net Operating Revenue 1.148.414 89.792 394.772 1.632.978 Operating Costs (926.471) (82.549) (201.967) (1.210.988) Gross profit 221.943 7.243 192.804 421.990 OPEX (250.762) (14.815) (90.065) (355.642) Equity Income 3.631 (6.880) 3.249 0 Net Interest Income (82.827) 8.345 (14.629) (89.111) Income Tax and Social Contribution (13.429) (1.016) (7.344) (21.789) Minority Shareholders (25.307) 243 (0) (25.064) Results Descontinued Operations 80.765 0 (80.765) 0 Net Loss from Continued Operations (69.617) 0 0 (69.617) EBITDA Margin 13,2% 12,3% Balance sheet Official 1H13 Adjustments Pro-Forma 1H13 Current Assets 6.745.681 769.575 (631.039) 6.884.207 Long-term Assets 1.042.373 (12.963) 452.409 1.481.819 Intangible and Property and Equipment 149.850 28.563 143.517 321.930 Investments 554.840 (589.953) 35.113 0 Total Assets 8.492.744 195.222 0 8.687.966 Current Liabilities 2.873.442 (103.748) (293.425) 2.683.765 Shareholders' Equity 2.618.458 (2.763) 0 2.615.695 Shareholders' Equity 2.449.326 0 0 2.449.326 Non controlling interests 169.132 (2.763) 0 166.369 Liabilities and Shareholders' Equity 8.492.744 195.222 0 8.687.966 ND/E 96% 102% 11 On June 30, 2013 Gafisa’s financial statements reflect the effects of the70% stake sale of AUSA which its assets and liabilities were classified as "non- current assets and liabilities held for sale" in accordance with CPC 31 Between July 2013 and the date of completion of the sale of AUSA, given the purchase of the remaining 20% ​​stake of the AUSA on July 3, 2013, we will report on a consolidated 100% of the result of AUSA as "Income from discontinued operations", without highlighting this minority investment. In the holding Company will report the result of 100% AUSA in the line of equity income. The assets and liabilities continue to be reported as "assets and liabilities held for sale". After the completion of the sale of 70% stake in AUSA we will no longer consolidate the assets, liabilities and results of the company. Our minority interest of 30% will be demonstrated throughout the account line "Investments" and the results will be captured through equity income. At the same time, classifications of "Assets and Liabilities held for sale" and "Income from discontinued operations" will no longer exist.
  • 13. 57% 54% 49% 30% 0% 43% 46% 51% 70% 100% Until Jun/14 Until Jun/15 Until Jun/16 Until Jun/17 After Jun/17 Corporate Debt Project Finance 3,620 1,062 128 996 736 697 Total Investors Obligations Working Capital SFH / Project Finance Debentures Working Capital Debentures FGTS 3,620 2,519 1,604 1,101 915 Total debt Cash Net debt Net Proceeds (sale transaction + purchase 20% stake) Post transaction Net Debt Indebtedness (R$ mm) and TaxesLeverage 2Q13 vs Pro-forma Post Transaction Note: preliminary unaudited results 1 Net of liabilities related to R$250 mn in securitization 2 Pro-forma Post Transaction 2Q13. Debt Maturity as % of Total Debt Net Debt/ Equity 0.96x 8.2% - 10.2% (TR) 0.7% - 1.9% (CDI) 8.3% - 12.0% (TR) 0.2% - 1.0% (CDI) 9.54% Gafisa Group - Post-Transaction, Flexible Balance Sheet 0.54x 1.3% - 2.2% (CDI) 1,179 1,252 920 341 237 R$ R$ Gafisa’s net debt/equity ratio is expected to drop from 96% reported in 2Q13 to approximately 54%, based on pro forma unaudited information for the period 12
  • 14. 2T13 1T13 2T12 Project financing (SFH) 736 785 579 Debentures - FGTS (Project Finance) 1.062 1.190 1.213 Debentures - Working Capital 698 585 568 Working Capital 996 908 987 Investor Obligations 128 134 243 Total Consolidated Debt + Obligations 3.620 3.602 3.590 Consolidated Cash and Cash Availabilities 1.101 1.146 834 Net Debt + Investor Obligations 2.519 2.456 2.756 Equity + Minority Shareholders 2.618 2.644 2.745 (Net debt + Obligations) / (Equity + Non-controlling) 96% 93% 100% Debt Profile Project Finance Debt 1.798 1.975 1.792 Corporate Debt and Investor Obligations 1.822 1.627 1.798 Total Consolidated Debt + Obligations 3.620 3.602 3.590 Project Finance (% stake of total debt) 50% 55% 50% Corporate Debt (% stake of total debt) 50% 45% 50% Net Debt to Equity stable at 96% (R$ million) 13 Note: Consolidated Pro-Forma unaudited financial information are presented for 1Q13 and 2Q12 only for informative and comparability purposes with 2Q13 data. The calculation of this amount considered Alphaville consolidation effects and the adoption of new accounting rules over the consolidation of joint arrangements control. Comfortable cash position of R$1.1 billion Consolidated cash burn of R$28 million in 2Q13 Net Debt / Equity was 96% Project finance represented 50% of total debt 43% of short-term debt comprises project finance (1) excluding R$35 millions of expenses related to the share buyback program.
  • 15. Outlook Launches Guidance – 2013E Guidance (2013E) Actual numbers 2Q13A Consolidated Launches R$2.7 – R$3.3 bi 769mn Breadown by Brand Launches Gafisa R$1.15 – R$1.35 bi 299mn Launches Alphaville R$1.3 – R$1.5 bi 323mn Launches Tenda R$250 – R$450 mn 147mn Guidance (2013E) Actual number 2Q13A Consolidated Stable 95% 96% Guidance (2013) Actual numbers 2Q13A Consolidated (# units) 13,500 – 17,500 4,673 Delivery by Brand # Gafisa Delivery 3,500 – 5,000 1,728 # Alphaville Delivery 3,500 – 5,000 419 # Tenda Delivery 6,500 – 7,000 2,526 Guidance (2013E) Actual number 2Q13A Consolidated 12% - 14% 13% Launch Guidance – 2013 Estimates Guidance Leverage (2013E) Guidance EBITDA Margin (2013E) Delivery Estimates 2013E 14 Considering Alphaville’s sale to Blackstone and Pátria, 2013 operational goals established in the beginning of 2013 remain unchanged The Company will provide guidance to reflect changes in accounting criteria in a timely manner