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Apresentação Institucional English 20080408
 

Apresentação Institucional English 20080408

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Apresentação Institucional English 20080408 Apresentação Institucional English 20080408 Presentation Transcript

  • Institutional Presentation
  • Disclaimer This presentation does not constitute an offer, or invitation, or solicitation of an offer to subscribe for or purchase any securities neither does this presentation nor anything contained herein form the basis to any contract or commitment whatsoever. The material that follows contains general business information about LPS Brasil – Consultoria de Imóveis S.A (“Lopes”) as of the Fiscal Year ended at 31 st of December 2007. It is not intended to be relied upon as advice to potential investors. The information does not purport to be complete and is in summary form. No reliance should be placed on the accuracy, fairness, or completeness of the information presented herein and no representation or warranty, express or implied, is made concerning the accuracy, fairness, or completeness of the information presented herein. This presentation contains statements that are forward-looking and are only predictions, not guarantees of future performance. Investors are warned that these forward-looking statements are and will be subject to many risks, uncertainties, and factors related to the operations and business environments of Lopes and its subsidiaries such as competitive pressures, the performance of the Brazilian economy and the industry, changes on market conditions, among other factors disclosed in Lopes filed disclosure documents. Such risks may cause the actual results of the companies to be materially different from any future results expressed or implied in such forward-looking statements. Lopes believes that based on information currently available to Lopes management, the expectations and assumptions reflected in the forward-looking statements are reasonable. Lastly, Lopes expressly refuses any duty to update any of the forward-looking statements contained herein.
  • Investment Highlights
  • Simple and Focused Value Added Business Model Main Distribution Channel in a Growing Industry with a National Footprint Low Risk Business with a Diversified Client Base : Cash Generator Company Key Position to Benefit from Market Growth due to Homebuilders’ IPOs Unmatched Scale and Reach Experienced Management Team and Outstanding Track Record Investment Highlights
    • Mr. Francisco Lopes initiates its activities intermediating properties
    1935 40´s 50´s 60´s 70´s 80´s 90´s 00´s
    • Launch one of the first buildings under the condominium concept
    • First TV advertisement for a real estate development
    • Start of long term partnership with Gomes de Almeida Fernandez (Gafisa)
    • Launch and sell of 14 office buildings at Av. Paulista
    • Launch and sell of 11 office buildings at the Faria Lima region
    • Creation of the launching system with sales stands and marketing materials, attracting customers specially during weekends
    • Identification of Marginal Pinheiros as an attractive area and launch one of the first buildings in the region
    • Start up of sales of hotel condominium (Flats)
    • Partner of Grupo Espírito Santo in selling one of the largest launching in Lisboa: Parque dos Príncipes
    • Introduction of the concept of condominium clubs
    • First “Top Imobiliário” award, in 1993 – Largest Brokerage Company
    • Lopes becomes an important player at the segment of gated communities
    • Triples in size in a decade, strengthening its leadership
    • Wins its 14 th consecutive “Top Imobiliário”
    • The company’s first logo
    • Becomes reference in real estate launchings and presents its new logo
    Brokerage Market Has No Other Company With The History and Track Record of Lopes
  • Lopes’ Market Share Evolution – São Paulo Market Uncontestable leader in the São Paulo real estate market for more than 10 years Lopes’ Market Share – São Paulo Market Source: Embraesp. Launch GSV Market share in the greater São Paulo area. Non-official information for 2007. Positioning 1 2 3 4 5 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 Competitor 1 Competitor 2 Competitor 4 Competitor 5 2006 Market Positioning - GSV 2007 Source: Embraesp. Launched VGV in the greater São Paulo area. Competitor 3 Competitor 6
  • Lopes is exclusively focused on providing value-added real estate brokerage services to its client-developers, with a permanent concern of avoiding conflicts of interest Simple and Focused Business Model…
    • Formal relationship through exclusivity agreements
    • Over 160 Clients
      • 46,393 effective buyers 1
      • 80,000 prospects included in our data base in 2006
    Client-Developers Client-Buyers How do we do business? How do we make money? 2, 3 $ 0.53 $ 0.12 $ 2.45 $ 100 $ 10 Total Price per Unit Down- payment Gross Commission $ 0.73 $ 0.12 $ 1.05 Agents + Managers Revenue Recognition $ 5 Developer
    • 1 Over the last 5 years in Sao Paulo
    • Figures only for example, not related to financials
    • Considering Sao Paulo market
    $ 1.90 $ 3.10 Net Commission Premium Contract Advisory Fee
  • Lopes Net Commission SP GSV / Consolidated GSV 100% 95% 80% 50% Net Comission São Paulo Net Comission Brazil
  • Lopes’ business is clearly fundamental to the profitability and returns of its clients… With a Key Role in the Real Estate Value-Chain More than 5,000 brokers Over 500 Exclusive Sponsored Sales Points Real Estate Development Brazilian Market Dynamics … and its scale and reach – nearly impossible to replicate – enhance this importance Working Capital Is Fundamental Pre Sales Speed of Sales Concentrated in the Launch Period Reliance on Sales Force Scale and Efficiency Speed of Sales is the Key for Profitability
  • Lopes is focused on providing its clients with a full range of consulting services, from land procurement advisory to product formatting, development and sale Value-Added Services Across the Development Cycle Determines the Site’s Vocation Masters Market Research Formats Product Meeting Buyers’ “ Wants and Needs” Develops Marketing Campaign Optimizes Media Negotiations Coordinates Product Launching Events Individual Sales Strategy Created to Each Product
  • Lopes’ unmatched reach and remarkable scale reinforce each other, enhancing success rate and permanently attracting new brokers Virtuous Growth Cycle: High Barrier to Entry More Agents (5,000 Brokers) More Efficiency in Sales More Trust from Developers More Deal Flow Amplify market intelligence Improve financial performance Attract and maintain top talents More Sales Points (500 Sales Sites) More Media Exposure 3,500 pages / year
  • Notes: Managerial Reports. Absorption calculated over available units Sales Expertise in all Market Segments Granja Viana / SP 153/197/230 m 2 Reserva Santa Maria – Sep/ 07 177 units Location Usable Area Sales Cachambi / RJ 48 to 65 m 2 Norte Village – Jun / 07 850 un. – R$ 113,000,000 Location Usable Area Sales Paralela / BA 112 to 243 m 2 Le Parc Residential Resort – Nov / 07 258 un. – R$ 121,000,000 Location Usable Area Sales Barra da Tijuca / RJ 203 to 260 m 2 Santa Mônica Jardins – Nov / 06 142 un. – R$ 20,700,000 Location Usable Area Sales Barra da Tijuca / RJ 262 to 278 m 2 Itaúna Gold 30 units – R$ 45.000.000 Location Usable Area Sales
      • 100% sold within 3 weeks
      • Developer: Scopel and Desim
    CASE
      • 90% sold within 5 months.
      • Developer: Living / Brascan
    CASE
      • 58% sold within 11 days.
      • Developers: Cyrella / Andrade Mendonça / Jotagê
    CASE
      • 70% sold within 1 year.
      • Developer: Brascan
    CASE
      • 80% sold within 30 days
      • Developer: Brascan
    CASE HIGH MEDIUM-HIGH MEDIUM ECONOMIC GATED COMUNITIES
  • HABITCASA: Focused on the Economic Segment
    • Business Unit Exclusively Focused on the Economic Segment
    • Units ranging up to R$180 thousand
    • Focused in all Brazilian real state market
    The economic segment will be one of the most important drivers for the long term growth of the real estate industry, due to the Brazilian housing deficit of 8 million homes 1 . 1 According to Fundação Getúlio Vargas – FGV Units Sold per Segment (2007) 35% 36% 18% 11% <150k 150k-350k 350k-600k >600k
  • Geographic Expansion
  • Lopes is Growing Nationwide SOUTHEAST REGION São Paulo – Lopes is the incontestable leader and with the acquisition of Cappucci & Bauer, become the leader in the Campinas Metropolitan Area. Rio de Janeiro – LCI-RJ and Patrimóvel operate separately, but with synergies on the back office, promoting reducing of cost. Espírito Santo – Entry in this market through the acquisition of Actual, leading real estate broker in that market. Minas Gerais – Greenfield operation in the state of Minas Gerais, with operations scheduled to start in February 2008. SOUTHERN REGION States of Rio Grande do Sul, Santa Catarina and Paraná – After the acquisition of Dirani in May 2007, Lopes is already benefiting from operating synergies and foresees opportunities to consolidate its leading position in the region. MIDDLE WEST REGION Federal District – Entry in this market through the acquisition of Royal, the industry leader in the region. NORTHEAST REGION Bahia - Greenfield operation in the state of Bahia, with launches initiated in October 2007. Pernambuco – Entry in this market through the acquisition of Sergio Miranda, one of the leading real estate brokers in that market. Ceará - Entry in this market through the acquisition of Immobilis, leading real estate broker in that market. NORTHERN REGION Pará – Greenfield operation in the state of Pará with launches scheduled for March 2008. Lopes tracks developers’ regional movements, consolidates its position as the largest consulting and sales player CE PR RJ BA SP RS ES SC PE MG PA DF
  • Expansion Plan Lopes is present in 11 States and Federal District, through more than 50 cities Business Unit State Lopes Participation Market Habitcasa SP/RJ 100% Primary Market LCI-RJ RJ 100% Primary Market Lopes Dirani PR/SC/RS 75% Primary and Secondary Market and Rent Lopes Salvador BA 100% Primary Market Lopes Actual ES 60% Primary and Secondary Market Lopes Sérgio Miranda PE 60% Primary and Secondary Market Lopes Minas Gerais MG 75% Primary Market Lopes Bauer SP – Campinas 60% Primary and Secondary Market Lopes Pará PA 60% Primary and Secondary Market and Rent Lopes Royal DF 51% Primary and Secondary Market Patrimóvel RJ 100% Primary and Secondary Market Lopes Immobilis CE 60% Primary and Secondary Market and Rent
  • Geographic Expansion Model Lopes developed a geographic expansion model that aligned interests between Lopes and its subsidiaries, generating value to its shareholders Geographic Expansion Model Aquistions
    • Earn-out system
    • Call and put mechanisms
    • Non compete clause
    Greenfields
    • Alliance with local partners
    • Fragmented and unprofessional markets
    • Low barriers of entrance
    Integration
    • Focused team on business units integration
    • Process and systems (SAP and SIAV)
    • Technology of communications (VOIP)
    Objectives
    • To capture the opportunities on markets very fragmented with lower efficiency
    • To decrease the dependency of São Paulo
    • To render services on the most important markets, through a model tested on the most competitive market of Brazil
  • Joint Venture: Lopes Itaú
  • Strengthening of mortgage origination and other related services. Leadership position in their respective markets Management Excellence High Value Brands Joint Venture Lopes Itaú Establishment of a Promotion Sales Company (non-financing company) to promote and offer financial products and services – mortgage and other related – with emphasis on the secondary market and with exclusivity to Lopes’ clients
    • Direct and exclusive access to its customer database
    • Seamlessly integrated operation with Lopes’ sales process, including an incentive compensation plan
    • Lopes media exposure
    • Service excellence
    • Competitive financing terms and conditions
    • Speed and quality of processing
    • Experienced credit analysis
    • Successful exposure to the lending business and in joint ventures
  • Earn-out will be paid every 2 years during a 10-year period, conditioned to the achievement of certain operational metrics Banco Itaú will have exclusivity to offer mortgages and related financial products to Lopes’ clients Joint Venture Lopes Itaú: Transaction Transaction Structure
    • No full recourse over Lopes’ assets
    • Results accounted through a Virtual P&L
    Term 20 years
  • The payment received from Banco Itaú will be recorded and deferred over a 20-year period (term of the contractually agreed exclusivity), beginning with the start of operations by the joint marketing company, expected to take place in the second half of 2008. Recognition of Revenue from Banco Itaú Payment Both Lopes and Banco Itaú agreed to an initial R$14 million investment to implement and put the joint marketing company into operation. Description Amount (in R$ thousands) Yearly deferral (in R$ thousands) Number of years (+) Revenue 290,000 14,500 20 (-) PIS tax (1,885) (94) 20 (-) COFINS tax (8,700) (435) 20 (-) Corporate income tax (23,200) (1,160) 20 (-) CSLL tax (8,352) (418) 20 (-) Related expenses (20,500) (1,025) 20 Net Revenue 227,363 11,368 20
  • Brazilian Real Estate Market
  • Regional Housing Shortage Brazil Shortage in units 7.9 MM % 14.9 Northeast Shortage in units 2.7 MM % 20.6% Southeast Shortage in units 2.9 MM % 12.2% South Shortage in units 0.87 MM % 10.4% Mid West Shortage in units 0.54 MM % 14% North Shortage in units 0.85 MM % 22.9%
  • Social Economic Scenario and Housing Shortage 5,4 6,7 0 3 6 9 1991 2006 2000 7,9 Source: Fundação João Pinheiro e Ministério das Cidades Source: Credit Suisse 47 million homes 19% A/B > 10 minimum wages- US$ 1.900 52% 5 – 10 minimum wages- US$ 950 - US$ 1.900 30% C 28% < 5 minimum wages - US$ 950 51% D/E 20% Source: Losango * Qualitative Housing Shortage is the number of times that a family moves to different houses in life Age Pyramid in Brazil - 2005 Segments by Income in Brazil Quantitative Housing Shortage (millions of homes) Qualitative Housing Shortage
  • Real Estate Credit Availability from Commercial Banks – Brazil Source: IMF - 2006 CAGR Savings Accounts: 54.4% CAGR FGTS: 18.3% CAGR Total: 37.3% (R$ Bi) Commercial banks were mainly responsible for the expansion in real estate financing in 06’and the credit expansion trend was reflected in the market in 2007 and will be in 2008 Current Brazilian Real Estate Market Scenario FGTS Savings Accounts
  • Projection to the Mortgage Loans in Brazil (% of GDP) Mortgage Market in Brazil 8,1% 11,0% 3,8% 2018 2012 2,4% 2014 2010 14,3% 5,7% 2008 2016 14,3 Source: BACEN, Lopes and Goldman Sachs surveys.
  • Source: EMBRAESP R$ Billion São Paulo Real Estate Market – Launches in R$ The SPMR has averaged 8.4 Billion in new residential launches over the last 10 Years. Evolution of Launches in the São Paulo Metropolitan Region
  • R$/m 2 SPMR Real Estate Market Overview – Prices Source: Secovi-SP Nominal INCC Adjusted Evolution of Average Launches’ Prices in the SPMR R$/m 2
  • Market absorption levels reinforce the conclusion that demand is recovering after the market’s downturn in the late 90’s Units Sold: 36.6k 66% Units Launched 38.5k Market Absorption: Units Sold/ Total Units Available Initial Supply: 17.2 k Source: Secovi-SP Market Absorption – City of São Paulo São Paulo Real Estate Market – Market Absorption Market Absorption in 2007 Total Supply 55.7 k 33% 46% 60% 66% 51% 0% 10% 20% 30% 40% 50% 60% 70% 2003 2004 2005 2006 2007
  • Operational Highlights 2007
  • Contracted Sales * Until 2006, managerial numbers 83% 2006* 2007 Secondary Market* Launches* 2,856 5,221 Total GVS (R$ MM) 311 348 4,873 2,545 Total Sales – Launches (R$ MM) 1,253 1,556 2003 2004 2005 CAGR: 35 % 1,853 850 591 1,166 2002 2000 2001 2006* 2,545 2007 4,873
  • In 2007, the geographic diversification resulted an increase of the participation of other regions in the contracted sales, it also highlighted the good position of Lopes in the economic segment. Contracted Sales per Region and Segment Contracted Sales per Region in 2007 (Primary Market – In GSV) Contracted Sales per Segment in 2007 (Primary Market – In Units)
    • Two seasonality components:
    • Natural variation in sales related to holidays or vacation periods over the year. The first quarter is more significantly affected by summer vacations and the week of Carnival celebrations.
    • Variations in sales stemming from the sales pipeline in the real estate development market, in which projects launched are subject to licensing and permit requirements, which account for significant distortions in a quarter-over-quarter comparison.
    Contracted Sales Seasonality Unstable sales behavior in each quarter accounts for variations in yearly sales
  • Sales Force
  • Financial Highlights 2007
  • Financial Highlights 74% 2006 2007 82.0 143.0 (R$ MM) Net Revenue Adjusted EBITDA* 78% 39.5 70.5 48.2% 49.3% 2006 2007 (R$ MM) 67% 31.7 52.9 2006 2007 Adjusted Net Income** (R$ MM) 38.6% 37.0% Net Margin *Adjusted EBITDA is a non-accounting measure created by Lopes, consisting of net income before interest, income tax and social contribution tax, net financial result (financial revenues and expenses), depreciation, amortization and non-operating income. The calculation of Adjusted EBITDA does not correspond to any generally accepted accounting practice in Brazil, does not represent cash flow for the periods presented, and should not be considered a substitute for net income as an indicator of operating performance, or a substitute for cash flow as an indicator of liquidity. Adjusted EBITDA does not have a standardized meaning and the definition of EBITDA adopted by Lopes may not be identical or comparable to the definitions of EBITDA or Adjusted EBITDA used by other companies. **Adjusted Net Income is an accountability issue decided by Lopes, it represents the amount of net income without the goodwill amortization. Ebitda Margin
  • Guidance for 2008
  • Guidance for 2008 (R$MM) 35% 105% 275 % 596% * The information for 2008 is based in the middle point of the divulged guidance. ** Includes Lopes Bauer, located in São Paulo state.
  • Additional Information
  • Launches – São Paulo Lopes reached a market share of 34%* in São Paulo, consolidating its leading position in the largest and most competitive Brazilian market * Market share according to EMBRAESP ranking for launches, using the criteria of points in the São Paulo Metropolitan Region in 2007. Ranking Company GSV (R$) 1 LOPES 6,500,825,731 2 ABYARA 4,613,178,918 3 TENDA 1,307,938,796 4 DEL FORTE 811,061,646 5 COELHO DA FONSECA 535,243,830 6 AVANCE 533,255,850 7 ITAPLAN 475,563,453 8 IPRICE 345,630,016 9 FERNANDEZ MERA 284,664,000 10 PLUS 118,590,913
  • Ownership Structure Total of 49.390.715 shares Ownership Structure Post-IPO
  • Analysts Coverage Institution Analyst Contact Agora Cristiane Viana (+55 21) 2529-3393 [email_address] Banco Espírito Santo Rodrigo Bonsaver (+55 11) 3074-7412 [email_address] Credit Suisse Marcelo Telles (+52 55) 5283-8933 [email_address] Fator Eduardo Guimarães (+55 11) 3049-9470 [email_address] Itaú Tomas Awad (+55 11) 5029-4517 tomas.awad@itau.com.br Link Celso Boin Jr. (+55 11) 4505-6701 [email_address] Planner Ricardo Martins (+55 11) 2172-2600 rmartins@plannercorretora.com.br UBS Pactual Guilherme Vilazante (+55 21) 3262-9610 [email_address] Waited for 2008 Coin Valores Bulltick