1Q10 Conference Call Presentation Results Presenters Marcos Lopes – CEO Francisco Lopes – COO Marcello Leone – CFO and IRO
Forward-looking statements This presentation does not constitute or form part of any offer, or invitation or solicitation of any offer to purchase, sell or subscribe for shares or other securities of the Company, nor shall this presentation or any information contained herein form the basis of, or act as inducement to enter into, any contract or commitment whatsoever. This presentation contains financial and other information related to the business operations of Lopes –LPS BrasilConsultoria de Imóveis S.A and its subsidiaries (“Lopes” or the “Company”) as of and for the period ended March 31st, 2010. It should not be considered as a recommendation for prospective investors to sell, purchase or subscribe for securities of the Company. The information presented herein is in summary form and does not purport to be complete. No reliance should be placed on the accuracy completeness of the information contained herein, and no representation or warranty, express or implied, is given on behalf of the Company or its subsidiaries as to the accuracy completeness of the information presented herein. This presentation contains forward-looking statements. Investors are advised that whilst the Company believes they are based on reasonable assumptions by Management, forward-looking statements rely on current expectations and projections about future events and financial trends, and are not a guarantee of future results. Forward-looking statements are subject to risks and uncertainties that affect or may affect business conditions and results of operations, which therefore could materially differ from those anticipated in forward-looking statements due to several factors, including competitive pressures, Brazilian macroeconomic conditions, performance of the industry, changes in market conditions, and other factors expressed or implied in these forward-looking statements or disclosed by the Company elsewhere, factors currently deemed immaterial. The forward-looking statements contained herein speak only as of the date they are made and neither Management, nor the Company or its subsidiaries undertake any obligation to release publicly any revision to these forward-looking statements after the date of this presentation or to reflect the occurrence of unanticipated events. 2
Program Highlights Operational Results Financial Results 3
Contracted sales totaled R$2.5 billion in 1Q10, 80% higher than 1Q09. Lopes sold 10,521 units in Brazil in 1Q10, an 89% increasewhencompared to the 1Q09, of which 41% were in the low-income segment (units priced up to R$150k). Consolidated Sales Speed Over Supply stood at 43%, when isolating the low-income segment, Habitcasa´s Sales Speed Over Supply was 61%, both among one of the largest sales speed of the sector. The State of São Paulo accounted for R$1.5 billion of our contracted sales, positioning Lopes as the leader in the biggest Brazilian market. In the markets of Brasília and the South Region, Lopes also stood up as the leader with R$350 million and R$244 million sales respectively. TheCompanyopened its newunits: Lopes Focus, Lopes ABC, newheadofficeof Rio de Janeiro, Lopes Curitiba, Habitcasa Campo Grande-RJ andHabitcasa Nova Iguaçu – RJ. In addition, threenew Pronto! storeswereopened in Sao Paulo. Throughthesenewunits, theCompanyseeks to strengthen its strategyofliquidity. In 1Q10, CrediPronto! granted mortgage loans worth R$87 million .Since the beginning of its operations until March this year, the amount financed by Credipronto! already reached R$291 million. Lopes Net Revenue totaled R$63 million, an increase of 82% when compared to the 1Q09. Pro-forma EBITDA in 1Q10 was R$22.4 million, an increase of 293% over 1Q09. Pro‑forma EBITDA Marginwas 36%. Lopes posted Pro-formaNet Income of R$12.4 million in 1Q10, up 296% year-on-year. Pro‑forma Net Marginwas 20% in 1Q10. 5
Sales Speed over Supply Lopes' Consolidated Sales Speed Habitcasa’s Sales Speed 9 *Management information, The Sales Speed over Supply is obtained based on the quarter’s contracted GVS compared to inventory and launches.
Sales by Income Segment 1Q10 Contracted Sales Total Contracted Sales = R$2,545 million 1Q10 1Q09 UnitsSold Total unitssold = 10,521 1Q10 1Q09 10
Contracted Sales by Geographic Region Contracted Sales 1Q10 1Q09 11
Some ExamplesofSuccessfulProjects 1Q10 100% SOLD 100% SOLD 100% SOLD 100% SOLD 100% SOLD Liber Bosque dos Jequetibas São Paulo – January Living Atua Mooca II São Paulo – February Atua Espaço e Vida Ipoema II Mogi das Cruzes – March Helbor Helbor Sunshine Santos – March Helbor Arc de FrenceResidence Fortaleza –February Mota Machado 100% SOLD 100% SOLD 100% SOLD 100% SOLD 100% SOLD 0 Novo Horizonte Jardins II Belo Horizonte – February Dominus Residencial dos Veleiros - 1ª Fase Parnamirim – January MRV In Breeini São Paulo– February Camargo Corrêa Tribeca São Paulo– March Even Helbor Home Flex Pacaembu São Paulo – January Helbor 99% SOLD 98% SOLD 98% SOLD 100% SOLD 100% SOLD 0 Real CelebrationLifeClub Águas Claras – February Real Engenharia Serenitá Porto Alegre – January Goldstein / Cyrela Alameda Clube Residencial Curitiba – March Living Portal Bordon II – Fase 7 Sumare – March Scopel Portal do Vale Taubaté – January Scopel 24
25 Some ExamplesofSuccessfulProjects 1Q10 91% SOLD 90% SOLD 97% SOLD 90% SOLD 97% SOLD SohoOffice São Paulo – March Even Isla Life Style Guará – March EBM Code Campo Belo São Paulo – March Even Parque das Flores – Jardim São Paulo – March Agre Rossi Ideal Hortolândia – Cond Laranjeiras Hortolândia – March Rossi / Forn / GNO 85% SOLD 86% SOLD 88% SOLD 87% SOLD 80% SOLD 0 Porto das Pedras Salvador – January TriploEngenharia Bella VittàJacareí Jacareí – March Scopel Rossi Ideal Hortolândia – Cond Pitangueiras Hortolância – March Rossi / Forn / GNO Livre Buritis – 1ª Etapa Goiania – March FR Incorporadora Belle Ville Campinas – March ACS 67% SOLD 69% SOLD 70% SOLD 78% SOLD 73% SOLD Prado Gallerie Porto Alegre – January Goldsztein Blue Center Rio de Janeiro – February Disa Catisa Rossi Ideal Cores de Mogi Mogi das Cruzes – January Rossi Reserva Santa Luisa RibeirãoPreto – March Scopel Acquaplay – 3ª Fase Santos– February Tecnisa 0
Net Commission by Market Net Commission 1Q09 1Q10 27
Results 1Q10 Without Pronto! and Credipronto!’s effect, Lopes’ EBITDA would’ve been R$24 millions, with a 40% margin and a Net Income of R$14 million, with a 23% margin. Brasília had a R$5,2 million Income, while Campinas had a R$1,5 million Income, what explains the minorities Interests of R$4,0 million. 28 1 Pro Forma EBITDA is a non-accounting measure drawn up by Lopes, which consists on EBITDA excluding the effects of stock option expenses. 2 Pro Forma Net Income is a non-accounting measure drawn up by Lopes, which consists on EBITDA excluding the effects of stock option expenses.
Gross and Net Revenue Net Revenue Gross Revenue (R$ MM) (R$ MM) 82% 81% 29
Costs of Services Provided and Operating Expenses 1Q10 Operating Costs and Expenses (R$ MM) Other 30
Pro Forma EBITDA* Pro Forma EBITDA (R$ MM) 36% 293% 16% Pro Forma EBITDA Margin EBITDA Pro Forma without Pronto! and CrediPronto! 1Q10 (R$ MM) 31 * Pro Forma EBITDA is a non-accounting measure drawn up by Lopes, which consists on EBITDA excluding the effects of stock option expenses.
Pro Forma Net Income* Pro Forma Net Income (R$ MM) 20% 296% 9% Pro Forma Net Margin Pro Forma Net Income without Pronto! and CrediPronto! 2009 (R$ MM) 32 * Pro Forma Net Income is a non-accounting measure drawn up by Lopes, which consists on Net Income excluding the effects of stock option expenses.
1,6 Margin Analysis Net Margin Net Income EBITDA EBITDA Margin (R$MM) 1Q09 9% 16% 1Q10 20% 36% 293% 11p.p. 20 p.p. 296% 33 With an EBITDA margin of 36% and net margin of 20%, Lopes continued for the fourth consecutive quarter to present the best margins among the brokerage companies .
34 CashGeneration * The payment of our acquisitions’ earn-out will occur on 2010 and 2011 and the amounts presented in the chart above are based on the current market conditions.