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Second Quarter 2006
                               Earnings Conference Call




Second Quarter 2006 Launches




         ...
Overview of the 2Q06 and Recent Developments

Wilson Amaral – Chief Executive Officer




                                ...
Well Defined Strategy



                                      Our Strategy

       Create the leading residential develop...
Highlights

     Launches increased 151% y-o-y
      Launches increased to R$ 274.2 million in 2Q06 from R$ 109.1 million ...
Gafisa Reports 151% Growth in Launches and 168% in Pre-Sales

    Launches (R$ mm)                                        ...
Growth Prospects of São Paulo Market

                            Core Market – Metropolitan Area of São Paulo
           ...
Growth Prospects in Rio de Janeiro

                            Core Market - Rio de Janeiro State
                       ...
Growth Prospects in New Markets

                           Well Defined Strategy
                               Develop l...
Rapidly Expanding Mortgage Supply

   Mortgage Availability                                                      Recent De...
Land Bank
 Land Bank representing 2-3 years of future sales


   Land Bank


                    Potential Units          ...
Financial and Operational Performance

Duílio Calciolari – Chief Financial Officer




                                   ...
Operating Highlights

     Net Revenues (R$ mm)                           Gross Profit (R$ mm)



                        ...
Operating Highlights

      Net Revenues (R$ mm)                                                  Gross Profit (R$ mm)

  ...
Despite the strong results in pre-sales, we’re still recognizing previous years
revenues
 Pre-sales x Recognized revenues ...
Strong Pre-sales performance will positively impact future earnings
 Currently, Gafisa has approximately R$243 million of ...
Strong Financial Position…
 …coupled with focus on working capital management



       (R$ million)                      ...
Our Goals for 2006

         Continued Growth Pace
     ►   Launching growth guidance for 2006 of 25-28% in nominal curren...
Gafisa: Premier Growth Opportunity




                                     Professional Management
           Industry Le...
“Safe-Harbor” Statement

  We make forward-looking statements that are subject to risks and uncertainties. These statement...
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2Q06 Presentation

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  1. 1. Second Quarter 2006 Earnings Conference Call Second Quarter 2006 Launches Blue Land – Rio de Janeiro Belle Vue – Porto Alegre Paço das Águas – São Paulo Vistta Ibirapuera – São Paulo Beach Park Living - Fortaleza Investor Relations Contact: Gustavo Felizzola ir@gafisa.com.br 2Q06 Earnings Conference Call São Paulo August 8, 2006 12PM (Brasilia Time), 11AM (US-ET) 1 Phone: +1 (973) 582-2734 Code: 7617321 Webcast: http://www.gafisa.com.br/ir
  2. 2. Overview of the 2Q06 and Recent Developments Wilson Amaral – Chief Executive Officer 2
  3. 3. Well Defined Strategy Our Strategy Create the leading residential development company in Brazil based upon sales, profitability and quality Maintain land Maintain debt Strong Focus on high Continued bank of policy of revenue return geographic 2-3 years of 40% - 60% net growth opportunities expansion future sales debt / equity 3
  4. 4. Highlights Launches increased 151% y-o-y Launches increased to R$ 274.2 million in 2Q06 from R$ 109.1 million in 2Q05 Pre-Sales grew 168% y-o-y Pre-sales increased to R$228.8 million in 2Q06 from R$85.3 million in 2Q05 Record-level Backlog Margin of 43.3% vs 33.1% in 2Q05 Backlog of Revenues rose to R$560.7 million in 2Q06 from R$382.2 million in 2Q05 Revenues Increase 47.5% to R$ 152,5 million and Adjusted EPS up 600% to 0.21 S&P raised Gafisa’s credit ratings to BBB+ from BBB S&P have revised Gafisa’s outlook to positive We strengthened our nationwide presence with three new partnerships in strategic markets, Alagoas, Rio Grande do Sul e Bahia. Mortgage availability by commercial banks increased 104% in the end June of this year. 4
  5. 5. Gafisa Reports 151% Growth in Launches and 168% in Pre-Sales Launches (R$ mm) Pre-Sales (R$ mm) 274 229 New Markets New Markets 46 Rio de Janeiro 16 Rio de Janeiro São Paulo Sao Paulo 58 % % % % 1 51 51 94 1 68 68 1 1 109 85 11 12 154 54 134 35 44 39 2Q05 2Q06 2Q05 2Q06 Pre-sales mix breakdown – 2Q06 22% HIG 22% MHI 69% MID AEL LOT COM 47% Segmentation (Prices in R$/sq.m) HIG – High Income: > 3,600 MHI – Middle High: 2,800 < > 3,600 MID – Middle Income: 2,000 < > 2,800 AEL – Affordable entry level: 1,800 < > 2,000 5 COM – Commercial LOT – Urbanized lots
  6. 6. Growth Prospects of São Paulo Market Core Market – Metropolitan Area of São Paulo 6% of Brazilian population and 10% of Brazilian GDP São Paulo also presents one of the highest GDP per capita in Brazil (72% higher than Brazilian average) Over 4 million homes (approximately 8% of total homes in Brazil) Opportunities in the metropolitan area: The metropolitan area of Sao Paulo presents several opportunities on the residential segment, specifically in the middle income bracket Despite the lower demand for luxury housing, we see some opportunities for innovative and differentiated projects As for the low income, we observe a huge unmet demand due to lack of a regulatory framework 6
  7. 7. Growth Prospects in Rio de Janeiro Core Market - Rio de Janeiro State 3% of Brazilian population and 5% of Brazilian GDP Rio de Janeiro also presents one of the highest GDP per capita in Brazil (38% higher than Brazilian average) Almost 2 million homes (approximately 4% of total homes in Brazil) Launching of 2 billion per year Opportunities: Projects oriented to middle and high-income in Barra da Tijuca and Jacarepaguá, fastest-growing region in the city Looking for sites to develop units with prices around R$150,000 Diversifying around suburban areas of Rio de Janeiro State 7
  8. 8. Growth Prospects in New Markets Well Defined Strategy Develop local partnerships to leverage regional market knowledge, legal skills, risk mitigation and entry barriers by reducing the time for local approvals Search new market regions that provide a sustainable growth to our operations (growing income per capita, population growth, i.e.) Multiple drivers of other markets mitigate growth risk Business Owners Organizational Structure provide a totally focused local management integrated and supported by Gafisa Corporate Recently signed Unit in SP partnerships How Gafisa is differentiated in Developing Markets? Strength of its brand and its track record in São Paulo and Rio de Janeiro Innovative project concepts Differentiated project designs Delivery of products on time and demand-aligned payment conditions Aggressive marketing strategy 8
  9. 9. Rapidly Expanding Mortgage Supply Mortgage Availability Recent Developments R$ billion Santander offer 20-year fixed rate mortgage Gafisa, HSBC and Santander offer pre- 20,3 approved mortgages CEF expects to channel R$10.3 billion to the housing sector using funds from FGTS/FAT Bradesco plans to triple mortgage lending 10,3 activity this year to nearly R$2 billion. Itaú 13,9 expects to lend R$1.4 billion in 2006 13% The term was up to 20 years from 15 years last year 9,0 9,4 9,1 ABECIP raises commercial banks lending 6,7 estimates to R$10 billion from R$7 billion 5,3 bringing total financing (including CEF) to 6,0 4,9 more than R$20 billion 10,0 83% 4,5 2,9 Central Bank may allow paycheck discount 109% 4,8 104% 4,1 for mortgage lending 3,0 2,2 2,0 Central Bank may allow Commercial Bank to lend at fixed rate using funds from Savings 2003 2004 2005 2006E 1H05 1H06 accounts Mortgage by Commercial Banks¹ CEF Mortgage Loans Sources: ABECIP, Central Bank. ¹ Total mortgage lending using savings 9 deposits funding (channeled-lending requirement).
  10. 10. Land Bank Land Bank representing 2-3 years of future sales Land Bank Potential Units % by Income Segment Future Sales acquired Lots & (R$ mm) by swap High Middle AEL Com São Paulo 336 2,118 - 8 846 67% Rio de 1,032 1,080 - 418 604 90% São Paulo Janeiro Other 444 2,115 - 270 638 92% Cities Total 1,812 5,313 - 696 2,089 84% % 23% 68% 0% 9% Rio de Janeiro 10
  11. 11. Financial and Operational Performance Duílio Calciolari – Chief Financial Officer 11
  12. 12. Operating Highlights Net Revenues (R$ mm) Gross Profit (R$ mm) 32% 26% % % 152,5 19 % 19 39,5 103,4 48 % 48 33,2 2Q05 2Q06 2Q05 2Q06 Net Revenues Gross Profit Gross Margin Adj. EBITDA (R$ mm) Adj. Net Income (R$ mm) 1%% 14% 66 1 66 15% 13% 19,1 15,3 % 25 % 25 3% 21,1 2,8 2Q05 2Q06 2Q05 2Q06 12 Adj. EBITDA EBITDA Margin Adj. Net Income Net Margin
  13. 13. Operating Highlights Net Revenues (R$ mm) Gross Profit (R$ mm) 34% 32% 32% 34% 28% 27% 26% 142 139 9.6% 494 114 124 440 436 334 34% 285 67 68 75 197 212 2001 2002 2003 2004 2005 1H05 1H06 2001 2002 2003 2004 2005 1H05 1H06 Gross Profit Gross Margin EBITDA (R$ mm) Net Income (R$ mm) 19% 19% 12% 17% 12% 12% 14% 14% 13% 13% 8% 84 64 66 65 51 8% 42 6% 38 4% 4% 34 36 27 26 20 265% 15 9 2001 2002 2003 2004 2005 1H05 1H06¹ 2001 2002 2003 2004 2005 1H05 1H06¹ 13 Adj. EBITDA EBITDA Margin Adj. Net Income Net Margin ¹ Adjusted EBITDA ¹ Adjusted Net Income
  14. 14. Despite the strong results in pre-sales, we’re still recognizing previous years revenues Pre-sales x Recognized revenues (R$000) Developments Pre-Sales % of Pre-Sales Revenues % of Revenues 143,699 84% 16,042 11% Launched in 2006 63% Launched in 2005 48,347 21% 44,542 29% Launched in 2004 16,557 7% 33,951 22% 59% Launched in 2003 13,832 6% 36,963 24% Launched in 2002 6,436 3% 8,240 5% Others na na 12,809 8% Total 228,870 100% 152,547 100% 14
  15. 15. Strong Pre-sales performance will positively impact future earnings Currently, Gafisa has approximately R$243 million of results to be recognized (a 91% growth compared to 2Q05)… Revenues and Results be Recognized (R$ mm) Backlog Margin (%) 43,3% 41,1% 2Q05 1Q06 2Q06 (c)/(a) (c)/(b) (a) (b) (c) % % Sales to be Recognized 383,2 473,4 560,7 46% 33,1% 18% Costs of Units Sold (256,3) (278,9) (317,8) 24% 14% to be Recognized 1 Results to be 91% 126,9 194,5 242,8 25% Recognized Margin to be 33.1% 41.1% 43.3% Recognized Note: 1 Includes only land and construction costs 2Q05 1Q06 2Q06 … with margins record high margins of 43.3% 15
  16. 16. Strong Financial Position… …coupled with focus on working capital management (R$ million) 2Q06 2Q05 1Q06 Short Term Debt 85 38 86 Long Term Debt 191 102 199 Total Debt 276 140 285 Cash and Cash Equivalents 423 119 481 Net Debt (Net Cash) (147) 21 (196) Shareholder’s Equity 806 321 788 Total Capitalization 1,082 461 1,073 Net Debt/ Equity -18% 7% -25% In order to optimize its working capital, Gafisa has been demanding new product from banks: Gafisa and Banco HSBC offer pre-approved mortgage in Santo Andre (Sao Paulo) Gafisa and Banco Santander Banespa Launches No-paperwork mortgage in Rio de Janeiro Gafisa and Banco Santander Banespa offer mortgage with discount on rent during construction period More recently, Gafisa’s Board approved a R$100 million securitization of Receivables from clients 16
  17. 17. Our Goals for 2006 Continued Growth Pace ► Launching growth guidance for 2006 of 25-28% in nominal currency terms Margin Expansion ► EBITDA margin for FY06 of 16-17% (as % of Net Revenues) 17
  18. 18. Gafisa: Premier Growth Opportunity Professional Management Industry Leadership and and Strong Brand Recognition Established Organization World-class Shareholders Geographic and the Highest Standards Diversification of Corporate Governance 18
  19. 19. “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. 19
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