ApresentaçãO Institucional InglêS 18.08.2009


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ApresentaçãO Institucional InglêS 18.08.2009

  1. 1. Institutional Presentation<br />August 2009<br />
  2. 2. Disclaimer<br />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.<br />The material that follows contains general business information about LPS Brasil – Consultoria de Imóveis S.A (“Lopes”) as of the 30thof June 2009. 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.<br />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. <br />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.<br />2<br />
  3. 3. Investment Highlights<br />3<br />
  4. 4. Investment Highlights<br />Simple and Focused Value Added Business Model<br />Experienced Management Team and Outstanding Track Record<br />Unmatched<br />Scale and Reach<br />Main Distribution Channel in the Industry with a National Footprint<br />Already scaled down to face new market conditions in 2009<br />Low Risk Business with a Diversified Client Base : Cash Generator Company<br />4<br />
  5. 5. Brokerage Market Has No Other Company <br />With The History and Track Record of Lopes<br /><ul><li>Launch and sell of 14 office buildings at Av. Paulista
  6. 6. Launch and sell of 11 office buildings at the Faria Lima region
  7. 7. Creation of the launching system with sales stands and marketing materials, attracting customers specially during weekends
  8. 8. Mr. Francisco Lopes initiates its activities intermediating properties
  9. 9. Introduction of the concept of condominium clubs
  10. 10. First “Top Imobiliário” award, in 1993 – Largest Brokerage Company
  11. 11. First TV advertisement for a real estate development</li></ul>00´s<br /><ul><li>Becomes reference in real estate launchings and presents its new logo</li></ul>90´s<br />80´s<br />70´s<br />60´s<br />50´s<br /><ul><li>Lopes becomes an important player at the segment of gated communities
  12. 12. Triples in size in a decade, strengthening its leadership
  13. 13. Wins its 15th consecutive “Top Imobiliário”
  14. 14. Lopes’ IPO
  15. 15. Lopes starts its geographic expansion process
  16. 16. Lopes’ website become leader on real state market</li></ul>40´s<br />1935<br /><ul><li>Identification of Marginal Pinheiros as an attractive area and launch one of the first buildings in the region
  17. 17. Start up of sales of hotel condominium (Flats)
  18. 18. Partner of GrupoEspírito Santo in selling one of the largest launching in Lisboa: Parque dos Príncipes
  19. 19. Start of long term partnership with Gomes de Almeida Fernandez (Gafisa)
  20. 20. The company’s first logo
  21. 21. Launch one of the first buildings under the condominium concept</li></ul>5<br />
  22. 22. Lopes’ Operation<br />6<br />
  23. 23. $ 2.45<br />$ 0.12<br />$ 0.53<br />$ 1.05<br />$ 0.73<br />Net Commission<br />Premium<br />Contract Advisory Fee<br />$ 0.12<br />Simple and Focused Business Model…<br />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<br />Client-Buyers<br />Client-Developers<br /><ul><li>46,393 effective buyers1
  24. 24. 80,000 prospects included in our data base in 2007
  25. 25. Formal relationship through exclusivity agreements
  26. 26. Over 160 Clients</li></ul>How do we do business?<br />Revenue Recognition<br />Total Price per Unit<br />$ 100<br />$ 3.10<br />$ 10<br />How do we make money?2, 3<br />Developer<br />$ 5<br />$ 1.90<br />Down-payment<br />GrossCommission<br />Agents +Managers<br />1 Over the last 5 years in Sao Paulo<br />Figures only for example, not related to financials<br />Considering Sao Paulo market<br />7<br />
  27. 27. Lopes Net Commission<br />Net Commission Brazil<br />2005 2006 2007 2008 2Q09<br />SP GVS / Consolidated GVS 100% 95% 80% 50% 42%<br />Net Commission São Paulo<br />8<br />
  28. 28. With a Key Role in the Real Estate Value-Chain<br />Lopes’ business is clearly fundamental to the profitability and returns of its clients…<br />Real Estate Development<br />Brazilian Market Dynamics<br />Working Capital<br />Is Fundamental<br />Pre Sales<br />Speed of Sales <br />Concentrated in the <br />Launch Period<br />Speed of Sales is the Key for Profitability<br />Reliance on Sales Force Scale and Efficiency<br />More than 5.000 brokers <br />…and its scale and reach – nearly impossible to replicate – enhance this importance<br />9<br />
  29. 29. Value-Added Services Across the Development Cycle<br />Lopes is focused on providing its clients with a full range of consulting services, from land procurement advisory to product formatting, development and sale<br />Optimizes Media Negotiations<br />Coordinates Product Launching Events<br />Determines the Site’s Vocation <br />Develops Marketing Campaign<br />Individual Sales Strategy Created to Each Product <br />Coordinates Product Launching Events<br />Masters <br />Market Research<br />Formats Product<br />Meeting Buyers’<br />“Wants and Needs”<br />10<br />
  30. 30. Competitive Advantage<br />“Lopes” culture in all business units of different states<br />One single brand, recognized by the market<br />National Integration <br />of Systems <br />Identity that stands Lopes out from the competitors<br />Competitive Advantage: A single, integrated solid Company<br />11<br />
  31. 31. Institutional Website<br />Evolution of visits to Lopes’ Website<br />Source: Google Analytics<br />12<br />
  32. 32. Sales Expertise in all Market Segments<br />CASE<br />Le Paysage – Oct / 08<br />HIGH<br /><ul><li>65% sold within 8 months.
  33. 33. Developer: Yuny.</li></ul>Location<br />Ibirapuera / SP<br />Sales<br />24 un. – R$ 60,000,000<br />Usable Area<br />322 to 367m²<br />CASE<br />MaxHausPanamby– Apr / 09<br />MEDIUM-HIGH<br />Location<br /><ul><li>85% sold within 2 months.
  34. 34. Developer: Maxcasa.</li></ul>Panamby/ SP<br />Sales<br />201 un. – R$ 55,000,000<br />Usable Area<br />70 m2<br />CASE<br />LuganoClub– May/ 09<br />MEDIUM<br /><ul><li>100% sold in one day.
  35. 35. Developers: Yuny.</li></ul>Location<br />Vila Carrão / SP<br />Sales<br />104 un. – R$ 42,150,000<br />Usable Area<br />96 to 206 m2<br />CASE<br />Dez Vila Curuça – Jun / 09 <br />ECONOMIC<br /><ul><li>100% sold within 10 days.
  36. 36. Developer: Living / Cury.</li></ul>São Miguel / SP<br />Location<br />Sales<br />252 un. – R$ 22,105,440<br />Usable Area<br />43 / 45 m2<br />HelborOffices Norte Sul – Apr / 09<br />CASE<br />GATED COMMUNITIES<br />Campinas / SP<br /><ul><li>100% sold in one day
  37. 37. Developer: Helbor.</li></ul>Location<br />238 un. – R$ 45,000,000<br />Sales<br />34 / 44 / 53 / 78 m2<br />Usable Area<br />Notes: Managerial Reports. <br />Absorption calculated over available units<br />13<br />
  38. 38. Geographic Expansion<br />14<br />
  39. 39. Lopes is Growing Nationwide<br />SOUTHEAST REGION<br />São Paulo – Beginning of operations in 1935. Acquisition of 60% of Capucci &Bauer, in October 2007, for R$9 million (7.1x P/E 2008) and an earn-out payment.<br />Rio de Janeiro – Entry by greenfield operation, with beginning of operations in July 2006, with LCI-RJ. <br />Espírito Santo – Acquisition of 60% of Actual, in July 2007, for R$5.76 million (7.0x P/E 2008) and an earn-out payment.<br />Minas Gerais – Entry by greenfield operation with beginning of operations in February 2008.<br />SOUTHERN REGION<br />States of Rio Grande do Sul, Santa Catarina and Paraná – Acquisition of 75% of Dirani, in May 2007, for R$15.1 million (7.5x P/E 2008) and two ear-out payments. In July 2008, Lopes acquired the 25% left by the call/put mechanism.<br />MIDDLE WEST REGION<br />Federal District – Acquisition of 51% of Royal, in November 2007, for R$12 million (9.0x P/E 2008) and an earn-out payment.<br />Goiás - Greenfield operation with beginning of operations in August 2008.<br />NORTHEAST REGION<br />Bahia - Greenfield operation with beginning of operations in October 2007.<br />Pernambuco – Acquisition of 60% of Sérgio Miranda, in August 2007, for R$ 3 million (10.0x P/E 2008) and an earn-out payment.<br />Ceará – Acquisition of 60% of Immobilis, in January 2008, for R$2.4 million (10.0x P/E 2008) and an earn-out payment.<br />CE<br />PE<br />BA<br />DF<br />GO<br />MG<br />ES<br />SP<br />RJ<br />PR<br />SC<br />RS<br />Lopes tracks developers’ regional movements, consolidates its position as the largest consulting and sales player<br />15<br />
  40. 40. Lopes’ Market Mix<br />Other*<br />Northeast<br />South<br />Brasília<br />Rio de Janeiro<br />São Paulo<br />*Other: Estpírito Santo, Minas Gerais and Goiás.<br />16<br />
  41. 41. Lopes in the Low Income Segment<br />17<br />
  42. 42. HABITCASA: Focus on Low Income Segment<br />Focus on Low Income Segment<br />Units up to R$ 180 thousand<br />The Habitcasa brand is applied in all Lopes’ markets <br />Utilização da marca em todos os mercados de atuação da Lopes<br />18<br />
  43. 43. Sales by Income Segment 2Q09<br />Units Sold<br />Contracted GVS<br />Total units sold = 8,321<br />Total Contracted GVS = R$2,183 million<br />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 homes1.<br />1 According to FundaçãoGetúlio Vargas – FGV<br />19<br />
  44. 44. Better Economic Situation of the Low Income Segment…<br />Source: IBGE, FGV, Ernst & Young <br />Source: FGV<br />Source: “Minha Casa, Minha Vida” Program<br />20<br />
  45. 45. ... and also Better Supply of Mortgages<br />Source: IBGE, BC<br />Source: ABECIP, Central Bankof Brazil, CEF e FGV<br />21<br />
  46. 46. Increase in the Potential Demand<br />Mortgage<br />R$96,000<br />Unit Value<br />R$120,000<br />30% of income <br />commitment<br />80% of the total value financed<br />Monthly Payment (R$)<br />In Minimum Wages<br />Interest Tax (%)<br />Interest Tax (%)<br />22<br />
  47. 47. Lopes in the Secondary Market<br />23<br />
  48. 48. JointVenture Lopes Itaú<br />Lopes and Itaú created the first and biggest pure mortgage company of Brazil. <br /><ul><li>Service excellence
  49. 49. Competitive financing terms and conditions
  50. 50. Speed and quality of processing
  51. 51. Experienced credit analysis
  52. 52. Successful exposure to the lending business and in joint ventures
  53. 53. Direct and exclusive access to its customer database
  54. 54. Seamlessly integrated operation with Lopes’ sales process, including an incentive compensation plan
  55. 55. Lopes media exposure</li></ul>Leadership position in their respective markets<br />Management Excellence<br />High Value Brands<br />Strengthening of mortgage origination and other related services.<br />24<br />
  56. 56. CrediPronto!<br />Innovative Real State Financing Process<br />The deadlines mentioned are linked to the complete delivery of the documentation and they can change in case of any restrictions.<br />25<br />
  57. 57. CrediPronto!<br />The only real mortgage company of the market and possibly with no conditions of being copied.<br />Focus on the Secondary Market<br />Opportunity to work in the Primary Market <br />with small Developers<br />Competitive Advantages <br /><ul><li>Efficiency on releasing mortgages;
  58. 58. Agility and perception of a non-financial institution; and
  59. 59. Lower process costs.</li></ul>26<br />
  60. 60. CrediPronto!<br />CrediPronto!’sFinancing<br />(R$ MM)<br />147.9<br />Accumulated Mortgage <br />Inventory in 2008 and 1H09:<br /><ul><li>GVS: R$148MM;
  61. 61. Volume Financed: R$95MM
  62. 62. Contracts: 321</li></ul>94.6<br />27<br />
  63. 63. Secondary Market: Pronto!’sBusiness Model<br />Feasible Leadership Assumptions as a Goal<br />Fast Growth <br />Credentialed<br />Stores<br />Converted<br />Stores<br />Owned Stores<br />Start Up Highly Structured<br />First Mover: only Brazilian one-stop-shop<br />High Volume <br />Creation <br />Pronto! present in 11 Brazilian States, and in the Federal District. It has 50 Stores, 31 of which in the city of São Paulo.<br />
  64. 64. Pronto!’s Business Model<br />2009<br />50 Shops<br />August<br />34 Shops<br />July<br />June<br />23 Shops<br />17 Shops<br />May<br />11 Shops<br />April<br />March<br />9 Shops<br />February<br />7 Shops<br />6 Shops<br />January<br />
  65. 65. Pronto! OneStop Shop Concept<br />One Stop Shop <br />Purchasing/Selling <br />your property<br />+<br />Financing<br />30<br />
  66. 66. Synergies Between Credipronto! and Pronto! – Competitive Advantage<br />Easy Credit <br />Access<br /> (Financing)<br />Distribution Channel<br />Pronto! and CrediPronto! acting together create a competitive advantage that is hard to replicate.<br />31<br />
  67. 67. Brazilian Real Estate Market<br />32<br />
  68. 68. Brazil<br />1,8x<br />Mexico<br />4,0x<br />G-7<br />9-10x<br />Social Economic Scenario and Housing Shortage<br />Age Pyramid in Brazil<br />Segments by Income in Brazil<br />A/B<br />&gt; 10 minimum wages- US$ 1.900<br />52%<br />19%<br />5 – 10 minimum wages- <br />US$ 950 - US$ 1.900<br />C<br />28%<br />30%<br />&lt; 5 minimum wages - US$ 950<br />D/E<br />20%<br />51%<br />Source: IBGE<br />47 million homes<br />Source: Losango<br />Quantitative Housing Shortage<br />(millions of homes)<br />Qualitative Housing Shortage<br />7,9<br />6,7<br />5,4<br />Source: CreditSuisse<br />1991<br />2006<br />2000<br />* Qualitative Housing Shortage is the number of times that a family moves to different houses in life<br />Source: Fundação João Pinheiro e Ministério das Cidades<br />33<br />
  69. 69. MortgageMarketandtheInvestment Grade<br />Mortgage Market as a % of GDP <br />AAA<br />AAA<br />AA<br />BBB+<br />A+<br />A+<br />A<br />BBB+<br />BBB-<br />A-<br />BBB-<br />X<br />RatingS&P<br />Source: Lopes, FMI, S&Pand Santander<br />34<br />
  70. 70. 20,6<br />Launches RMSP – Historic data (1996 - 2008)<br />GVS¹ Launched (R$ bn) - RMSP<br />1996<br />1997<br />2007<br />2008<br />2009E*<br />2006<br />¹ Launched values adjusted by the INCC until June/09.<br />Nominal GVS launched in 2008 was the same amount as 2007: R$ 20 bn.<br />Number of Launches - RMSP<br />Units Launched (‘000) - RMSP<br />35<br />+14%<br />+37%<br />1997<br />1998<br />1999<br />2000<br />2001<br />2002<br />2003<br />2004<br />2005<br />2006<br />2007<br />2008<br />1H09<br />1997<br />1998<br />1999<br />2000<br />2001<br />2002<br />2003<br />2004<br />2005<br />2006<br />2007<br />2008<br />1H09<br />Source: Lopes’ Market Intelligence<br />*2009E – 1997 + GDP growth or similar amount of 2006 (GDP growth – CAGR with data from IBGE, GDP of 2008 was annualized).<br />
  71. 71. SPMR Real Estate Market Overview – Prices<br />Evolution of Average Launches’ Prices in the SPMR<br />R$/m2<br />R$/m2<br />Nominal<br />INCC Adjusted<br />Source: EMBRAESP<br />36<br />
  72. 72. The Secondary Market<br />Real estate market by segment <br />Difference (in %) between the average price per m² in new development vs. used properties<br />(Total in R$ billion, % of total potential sales value)<br />100%<br />118<br />Primary<br />Secondary<br />In the city of São Paulo, the difference is as high as 30% ~ 50%<br />Source: ITBI, Gafisa prospectus, CushmanWakefieldreport, teamanalysis<br />37<br />
  73. 73. Factors that Sustain the Growth in the Real State Market<br />38<br />
  74. 74. Lopes’ Confidence Index<br />39<br />
  75. 75. 116,9<br />Lopes’ Confidence Index (LCI) - July/09<br />Lopes is the first company to create a Real Estate Consumer Confidence Index.<br />Lopes’ Confidence Index (LCI) <br />July/09<br />+42%<br />Lopes’ Confidence Index intend to measure clients confidence, so Lopes can follow and anticipate, in the short term, housing purchase tendency.<br />The sample has 585 interviews, with Grande São Paulo resident clients, which contacted Lopes in the last 3 months and are interested in purchasing a new home.<br />(base: jan/2009=100)<br />Source: Lopes Market Intelligence<br />40<br />
  76. 76. 116,9<br />Lopes’ Confidence Index by Segment<br />The scenario is positive when compared the present purchase intention with the purchase intention for the next 6 months, for all segments.<br />The factors that show the optimism for the future are: <br />the perception about the Brazilian economic situation in the next 6 months; and <br />the purchase intention for the next 6 months.<br />39%<br />43%<br />49%<br />Low Income<br />Medium-High<br />High<br />Lopes’ Confidence <br />Index<br />Expectation <br />Index<br />Present Situation Index<br />(base: jan/2009=100)<br />Source: Lopes Market Intelligence<br />41<br />
  77. 77. Operational Highlights<br />42<br />
  78. 78. Operating Performance<br />2007<br />2008<br />1H09<br />Launches<br />4,535<br />9,285<br />21,260<br />Contracted Sales<br />3,595<br />5,221<br />10,099<br />Primary Market<br />9,370<br />3,359<br />4,873<br />348<br />Secondary Market<br />728<br />235<br />11<br />States<br />13<br />11<br />Market Value (R$ million)<br />519.2<br />1,683.5<br />326.4<br />Headcount<br />508<br />699<br />563<br />5,495<br />4,993<br />Independent Brokers<br />5,799<br />43<br />
  79. 79. Contracted Sales’ Historical*<br />Total GVS – Primary Market<br />(in R$ million)<br />CAGR: 36%<br />* Unaudited managerial information.<br />44<br />
  80. 80. Contracted Sales<br />Contracted Sales<br />(R$ MM)<br />3,279<br />2,183<br />55%<br />1,441<br />45<br />
  81. 81. UnitsSold per Regionand per IncomeSegment<br />Sales per Region<br />(in units)<br />Sales per Segment<br />(in units)<br />46<br />
  82. 82. Sales Speed over Supply<br />Brazil Consolidated Sales Speed Lopes+HabitCasa<br />Habitcasa’s Sales Speed <br />*Management information,<br />The Sales Speed over Supply is obtained based on the quarter’s contracted GVS compared to inventory and launches.<br />47<br />
  83. 83. Financial Highlights<br />48<br />
  84. 84. Net Commission by Market<br />Net Commission <br />2Q08<br />2Q09<br />49<br />
  85. 85. Results 2Q09<br />Without Pronto! and CrediPronto!’s effects, Lopes’ EBITDA would’ve been R$22.1 million, with a 43% margin, and a Net Income of R$11.2 million, with a 22% margin. <br />Brasília had a R$6.9 million Income, while Campinas had a R$2.8 million Income, what explains the Minority Interests of R$5.7 million.<br />50<br />
  86. 86. Costs of Services Provided and Operating Expenses<br />OperatingCostsandExpenses<br />(R$ MM)<br />Other<br />51<br />
  87. 87. Operational Leverage<br />PrimaryMarketCostsandExpenses<br />Net Revenue<br />(R$ MM)<br />(R$ MM)<br />55%<br />18%<br />Operational Leverage as a basic premise for growth.<br />Result: Net Income Pro Forma increase of 246% with a 20% Margin.<br />52<br />
  88. 88. Guidance for 2009<br />53<br />
  89. 89. Sales’ Guidance for 2009<br />(R$ MM)<br />* The General Value of contracted sales (Contracted GVS) projected in this release may change due to many variables. This material fact includes forward looking statements related to business perspectives, results estimates and, also, the growth outlook for Lopes. Such forward looking statements may be substantially affected by changes in market conditions, government decisions, stronger competition, industry performance as well as Brazilian economy performance, in addition to those risks presented in the documents released and filed by Lopes, consequently, they are subject to changes without previous notice.<br />54<br />
  90. 90. Additional Information<br />55<br />
  91. 91. Lopes’ Contracted Sales Seasonality<br />Two seasonality components:<br /><ul><li> 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.
  92. 92. 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.</li></ul>Unstable sales behavior in each quarter accounts for variations in yearly sales<br />56<br />* The seasonality can not be verified in 2008, because of the effects of the world financial crises.<br />
  93. 93. OwnershipStructure<br />Ownership Structure Post-IPO<br />Total of 49,448,033 common shares<br />57<br />
  94. 94. Analysts Coverage<br />58<br />
  95. 95. Contacts<br />59<br />