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12 Conferência Anual Santander

This corporate presentation by Direcional discusses the company's history and operations over 30 years focusing on developing low-income residential real estate projects in Brazil. Direcional has established itself as the leading player in the low-income segment through its large-scale, vertically integrated development model and expertise in this market. The presentation outlines Direcional's unique business model and footprint in high-growth, underserved markets and discusses its continued focus on large projects and expertise in all low-income segments.

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1 Corporate Presentation 12a Conferência Anual Santander
Disclaimer This presentation may contain forward-looking statements. Such forward-looking statements are and will be subject to many risks and uncertainties relating to factors that are beyond Direcional’s ability to control or estimate precisely, such as future market conditions, competitive environment, currency and inflation fluctuations, changes in governmental and regulatory policies and other factors relating to the operations of Direcional, which may cause actual future results of Direcional to differ materially from those expressed or implied in such forward-looking statements You are cautioned not to place undue reliance on these forward-looking statements, which speak only as of the date of this presentation. Such forward-looking statements shall not be construed as guarantee of future performance. Direcional does not undertake to publicly review or update these forward-looking statements in view of events or circumstances occurring after the date 2 undertake to publicly review or update these forward-looking statements in view of events or circumstances occurring after the date of this presentation This presentation does not constitute an offer, or invitation, or solicitation of an offer, to subscribe for or purchase any securities. Neither this presentation nor anything contained herein shall form the basis of any contract or commitment whatsoever This presentation and its contents are proprietary information and may not be reproduced or otherwise disseminated in whole or in part without Direcional’s prior written consent.
652 2,227 5,359 9,360 12,364 Start-up in 1981 Industrial projects acting as contractor to third parties IPO Over 30 Years of History A consistent track record and focus Capture significant market opportunities MCMV II Follow-on: $ 228.8 million for What’s Next? CAGR 06-10: 110% CAGR 06-10: 100% 67 176 710 783 1,067 Development of projects focused on the low-income market Beginning of large scale developments for the low-income market Operations expansion to PA, RO and ES IPO 32% growth in units launched from the previous year 57% growth in contracted PSV from the previous year 3 Source: Company Reports Units Launched Consolidation of a leading position in Manaus and Brasilia Establishment of own sales team Important geographic expansion: Brasília, Rio de Janeiro and Campinas 1981 - 2005 2006 2007 2008 2009 2010 2011 228.8 million for the Company Increasing liquidity PSV Launched (R$ mm) 67
Management Team Ricardo Valadares Gontijo Chairman & CEO Ricardo Valadares Gontijo Chairman & CEO • Founder, CEO and Chairman of the Board 40 years of construction experience • Civil Engineer graduated by UFMG with Gold Medal Award. Ricardo Ribeiro Gontijo Commercial Officer Ricardo Ribeiro Gontijo Commercial Officer Roberto Senna General Manager Roberto Senna General Manager • Civil Engineer degree from The Universidade Federal da Bahia, MBA degree from FGV and specialization courses at the Wharton School - University of Philadelphia, and University of Carlifornia - Irvine. • Joined Odebrecht Group in 1979 and has held senior management positions in Brazil and abroad • He was President of Metro-Rio, Director of Telemar Holding and member of the Board of several companies of the group. • He was CEO of Bairro Novo, a real estate subsidiary from Odebrecht Group, focused on residential development and construction in the low income •Board Member and responsible for Marketing, Sales and New Business •Civil Engineer graduated by UFMG with the Gold Medal Award •Joined Direcional in 2004. 4 Commercial OfficerCommercial Officer Carlos Wollenweber CFO & IR Officer Carlos Wollenweber CFO & IR Officer Lucas Rocha Engineering Officer Lucas Rocha Engineering Officer Ana Carolina Huss Human Resources Officer Ana Carolina Huss Human Resources Officer •Joined Direcional in 2004. •Extensive experience in the Brazilian real estate market. •From 2007 to 2009, Controller of BR Properties •From 2005 to 2007, Financial Director of Valora •From 2001 to 2005, Financial Manager of Gafisa •Electrical Engineer graduated by PUC / SP has master degree in Economics and Finance at PUC / SP and MBA degree at MIT (Massachusetts Institute of Technology) •Responsible for the engineering department with more than 30 years of experience in construction •Holds a bachelor’s degree in Civil Engineering •Joined Direcional in 1985 • Psychologist, graduated at University Paulista, MBA in Business Management, post graduate in Knowledge Management at FVG and certified in Bright Link in professional coaching • Human Resources Manager at Natura Cosméticos and Accor Brasil • Responsible for the department ¨People and Organization¨ of the Bairro Novo, a company of the Odebrecht group.
Shareholder’s Structure 46.9% 15.0% Filadélphia Participações S.A. 1 GICTarpon2 Other 7.1% 24.1% Ridgecrest, LLC 6.9% 51. Holding owbed by Ricardo Valadares Gontijo and his family 2. Funds managed by Tarpon Investimentos S.A.
6 Business Model 6
Unique Footprint Strong footprint in markets with high growth potential, low competition and high barriers to entry Low competition in profitable markets Direcional: A Unique Business Model The best low-income player in Brazil The most profitable and efficient player in the low income sector ‘’’’‘ Highest efficiency and profitability in the sector 1st Annualized ROE¹ among peers ~25.8% of ROE ~22.6% of Net Margin 1st Net margin among peers 1 Track Record in Operating in the Low Income Over 30 years of experience Solid track record in 0-3 minimum wages projects Low capital commitment, solid margins and high ROIC Focus on Large Scale Projects Verticalized Business Model Strong expertise in large scale ventures Own work force Performance-based compensation Standardized and industrialized production on-site Large scale operations in the low income segments, with strict cost control and high margins 7Source: Company Report in the 4Q10 1. Annualized ROE: Annualized Quarter’s Net Profit / Average Shareholders' Equity in the same period 2 3 4
Unique Footprint: High Growth Markets with Barriers to Entry Land Bank Composition Barriers to Entry Detailed mapping of logistics and supply Scarcity of Suppliers Industrialization of raw materials Vertically integrated model is rapidly replicated Direcional's Approach 1 Direcional is the leading company in underpenetrated markets with high growth potential AM 13.5% RO 3.9% PA 13.4% 8 Complex Logistics Detailed mapping of logistics and supply channels Large and vertically integrated projects Adverse Weather Conditions Pre-manufactured building materials adapted to diverse climates Expertise in coordinating construction cycle and weather demands Unskilled Labor Highly-trained workers Standardized and fully-integrated construction Compensation based on performance “MINHA CASA, MINHA VIDA” 49.9k units elegible for the program 73.4% of total Land bank Source: Company Report ES 1.5% MG 37.8% SP 6.4% DF 22.5% RJ 1.1% Popular, 52.8% Commercial, 4.2% Medium, 36.1% Upper Middle, 6.9% Segment Breakdown (PSV)
Focus on Large Scale Projects … Strong and unique expertise in large scale ventures 2 Large Scale Projects¹ Main Advantages of Scale Economies of Scale Industrialization process of raw materials Manaus Total Ville AM Under construction 3.848 2.136 Total Ville Bella Cittá PA Under construction 4.938 3.316 Total Ville Marabá PA Under construction 5.604 4.664 Allegro Residencial Club AM Under construction 1.648 704 Setor Total Ville DF Under construction 4.362 2.064 Total Ville Porto Velho RO Under construction 2.852 1.868 Dream Park ES Under construction 1.034 752 Project Status Total Units Units to be launched 9Source: Company Report 1. Projects with more than 1,000 units Optimize construction processes Urbanized projects Lower Execution Risk Lower Inflation Risk78.3% of the units to be launched in large scale projects1 16 projects with close to 65 thousand units Eliza Miranda AM Under construction 1.406 128 Cachoeiras do Madeira RO Under construction 1.278 426 Total Ville Macaé RJ Under construction 1.145 399 Águas Claras DF To be Launched 1.148 1.148 Floramar MG To be Launched 1.172 1.172 Granjas Werneck MG To be Launched 15.000 15.000 Sítio São João MG To be Launched 2.500 2.500 Ferroeste MG To be Launched 2.388 2.388 Samambaia DF To be Launched 14.614 14.614 Total 64.937 53.279 Licensed Projects
… Through a Verticalized Business Model More than 11,000 exclusive workers assuring quality, commitment, efficiency and cost control Verticalized Business Model Ability to Deliver 3 Best Execution in the SectorBest Execution in the Sector Construction DNAConstruction DNA Own Work Force VerticalizationVerticalization Standardized / Industrialization 10 Performance Based Compensation Capacity to Hire and Train Operational Team Lower Turnover On Schedule: Projects Delivered on Time With High Quality: Lower Maintenance Cost On Budget: Margin Stability Own Work Force Standardized / Industrialization Economies of Scale All projects are based on few designs Source: Company Report
Unique Expertise in the Low Income Segment Solid track record in all the low income segments Characteristics Developer approach ̶ Companies develop projects and sell units to customers Price above R$170 k / unit CAIXA does not facilitate customer financing Developer approach ̶ Companies develop projects and sell units to customers Price is capped at R$170 k / unit CAIXA facilitates customer financing Builder approach ̶ Homebuilders present projects to Caixa for evaluation and approval Normally land/infrastructure is given by local Government Price is capped at R$51 k / unit 4 Mid / Low Income Low Income (MCMV – 4-10 MW) Very Low Income (MCMV – 0-3 MW)+ + 11 1. Company estimates – maximum cash exposure in % of total PSV Main Players Equity Commitment1 Units Launched 2010 ~5%~15%~20% ~10% 60% / 7,391 units12% / 1,503 units 28% / 3,470 units PSV Launched 2010 36% / R$ 380 mm23% / R$ 245 mm 41% / R$ 441 mm
Top Notch Operational Performance Direcional has been confirming its efficient cash cycle with sound financial results Efficient Cash Cycle Highest Results in the Sector Land Acquisition Sales Speed Land Acquisition Sales Speed 38% VSO80% Swaps 19% 24% MRV PDG Helbor 12 Efficient Cash Cycle Management Cash Collection Austere Budget Client Financing Construction Financing Cash Collection Austere Budget Client Financing Construction Financing Avg. Unit Selling Price NetMargin2010 Source: Company Reports in the 4Q10 80-100% of construction cost G&A of 6% of Revenues 4% 9% 14% - 150.000 300.000 450.000 CCDI Rodobens PDG Even Inpar Cyrela Tecnisa Rossi Trisul Gafisa
13 Growth Drivers 13
MCMV Program Highlights The largest housing program of the Brazilian history First Priority of the New Government and currently at full speed with Dilma’s recent election The 0-3 segment has expanded three-fold, reaching 1.2 Growth Drivers: MCMV 2nd Phase 0-3 segment presents an outstanding growth opportunity 600,000 200,000 200,000 BRL 34 billion 1.000.000 uniits BRL 72 billion 2.000.000 units 4-6 Wages 7-10 Wages Total (R$'000) % Direcional (R$'000) Residencial meu Orgulho - 1ª Fase * Jun Manaus -AM 190,598 190,598 3,511 Bairro Carioca Oct Rio de Janeiro - RJ 114,240 114,240 2,240 Residencial Jardim Alterosa Dec Belo Horizonte - MG 75,440 75,440 1,640 Total 2010 380,278 380,278 7,391 2010 Projects Launch Date City - State PSV Nr. of Units The 0-3 segment has expanded three-fold, reaching 1.2 million units The regional distribution of the program should benefit Direcional 14 400,000 1,200,000400,000 200,000 MCMV1 MCMV2 0-3 Wages
Growth Drivers: Selective Geographic Expansion Direcional operates in Brazil’s most complex markets and expects to replicate this model in new attractive areas Development of 0-3 MW Projects Geographic Expansion Strategy New Sites Selection Criteria High Housing Demand Access to Credit Lines 15 Immediate gain of market share and visibility New projects leveraging on our unique business model Access to Credit Lines Operational Complexity & Region Expertise Land Availability
16 Operating Highlights 2Q11 and 1H11 16
158 288 300 511191 191 131 131 176 710 783 1,067 511 Launches +82% CAGR 07-10: 82% +71% Launched PSV (R$ million) Launched PSV - Evolution (R$ million) Total (R$'000) % Direcional (R$'000) 1 Verano Residencial - 1st Phase April Belém - PA 36,968 36,931 184 539 Medium 2 Total Ville Macaé - 2nd Phase - RET 1 April Macaé - RJ 27,264 13,632 340 1,145 Popular 3 Parque Ponta Negra - 3rd Phase April Manaus - AM 47,711 47,706 137 820 Upper-Middle 4 Tulip Inn Savassi - Hotel June Belo Horizonte - MG 86,238 85,376 240 240 Commercial 5 Total Ville Vida Nova - 3rd Phase - RET 1 June Manaus - AM 56,400 56,344 752 3,848 Popular 6 Bella Città Algodoal - 3rd Phase - RET 1 June Marituba - PA 48,000 47,995 640 4,938 Popular 302,581 287,984 2,293 11,530 1 Acquisition of Project - Parque Ponta Negra May Manaus - AM 131,289 131,289 545 n/a Medium 433,870 419,272 2,838 11,530 # of Units Launched Total Units (All Phases) Segment Launches 2Q11 Launches + Project Acquisition 2Q11 Projects Date City - State PSV 2Q10 2Q11 1H10 1H11 Development 0-3 mw projects ProjectAcquisition 176 2007 2008 2009 2010 1H11 17
54.6% 65.6% 58.1% 56.2% 45.4% 37.7% 9.7% 34.4% 4.2% 34.0% 2Q10 2Q11 1H10 1H11 Launches Breakdown Launches (Segment Breakdown – PSV) Launches (Geographic Breakdown - PSV) 54,6% 38,9% 7,7% 41,0% 30,0% 35,9% 37,5% 12,8% 26,7% 34,8% 16,6% 4,2% 9,3% 29,6% 20,0% 2Q10 2Q11 1H10 1H112Q10 2Q11 1H10 1H11 North Midwest Southeast Tulip Inn Savassi - Hotel – PSV R$ 85.4 MM Total Ville Vida Nova 3rd phase – PSV R$ 56.4 MMVerano Residencial – PSV R$ 36.9 MM 18 Parque Ponta Negra – PSV R$ 47.7 MMTotal Ville Macaé 2nd phase – PSV R$ 13.6 MMBella Cittá Algodoal – PSV R$ 47.9 MM 2Q10 2Q11 1H10 1H11 0 - 3 MW Popular Medium Upper Middle Commercial
127 441 661 1,037 344133 169 297 344 191 191 89 89 Sales CAGR 07-10: 101% +27% +16% Contracted PSV (R$ million) Contracted PSV - Evolution (R$ million) 58,9% 39,1% 24,2% 24,3% 36,5% 30,4% 9,2% 47,2% 13,7% 49,4% 7,8% 11,8% 10,8% 10,4% 16,7% 9,7% 2Q10 2Q11 1H10 1H11 0 - 3 MW Popular Medium Upper Middle Commercial 77.9% 48.1% 72.8% 40.1% 13.2% 19.8% 17.0% 21.7% 8.9% 32.1% 10.2% 38.2% 2Q10 2Q11 1H10 1H11 North Midwest Southeast 2007 2008 2009 2010 1H112Q10 2Q11 1H10 1H11 Development 0-3 mw projects Project Acquisition 19 Sales (Geographic Breakdown) Sales (Segment Breakdown)
33.8% 38.3% Sales Speed Sales Over Supply of 18.5% in 2Q11. Under RET1, a purchase agreement only becomes effective after CEF approves the mortgage credit facility. If we do not consider RET1 projects, Sales Over Supply would achieve 20.6%, whereas 51%* of the units launched in 2Q11 were sold during the same quarter Sales Over Supply (VSO) (Total PSV) Sales Speed (%) (Units) 20% 31%2T11 51%* 20.6% 23.7% 19.4% 20.8% 27.6% 22.1% 18.5% 1Q10 2Q10 3Q10 4Q10 1Q11 2Q11 With 0.3. MW project Without 0.3. mw project 20 2Q10 and 4Q10: the sales speed was positively impacted by the immediate recognition 0-3 m.w. construction contracts 2Q11: was inegatively mpacted by the RET1 projects, in which sales are subject to the mortgage facility approval from CEF. * Not considering RET1 projects Ex-RET1 project 89% 17% 87% 48% 4% 27% 4% 21% 3% 14% 1%2T10 3T10 4T10 1T11 3M 6M 9M 12M 15M 69% 92% 67% 97% 51%*
Concluded Projects - 2Q11 Total (R$'000) % Direcional (R$'000) 1 Equilibrium Manaus - AM 49,501 43,561 136 2 Águas do Madeira Porto Velho - RO 61,520 40,973 426 3 Grand Prix Manaus - AM 42,026 36,983 192 4 Lake View Resort Brasília - DF 89,513 87,812 232 5 Garden Club - 1st Phase Porto Velho- RO 34,394 27,515 313 6 Dream Park Serra - ES 44,629 35,704 282 Completed Projects - 2Q11 321,584 272,547 1,581 Completed Projects - 2Q11 City - State PSV # of Units 21 Completed Projects - 2Q11 321,584 272,547 1,581
22 Operating and Financials Highlights 1H11 and 2Q11 22
Highlights 158 288 300 511191 191 131 131 2Q10 2Q11 1H10 1H11 176 710 783 1,067 511 2007 2008 2009 2010 1H11 +82% CAGR 07-10: 82% +71% Launched PSV (R$ million) Launched PSV - Evolution (R$ million) 102,3 263,2 377,6 781,9 478,7 21,1% 24,5% 22,5% 22,6% 19,1% 0,0% 5,0% 10,0% 15,0% 20,0% 25,0% 30,0% 0,0 100,0 200,0 300,0 400,0 500,0 600,0 700,0 800,0 900,0 2007 2008 2009 2010 1H11 Adjusted net Margin (%) 23 2Q10 2Q11 1H10 1H11 Development 0-3 mw projects ProjectAcquisition 2007 2008 2009 2010 1H11 +48% +55% Net Revenues (R$ million) CAGR: 97,0% Net Revenues - Evolution (R$ million) 165 245 308 479 2Q10 2Q11 1H10 1H11
14,9 20,7 33,0 48,2 56,8 57,7 35,6 114,5 10,1% 12,2% 15,2% 17,7% 23,8% 23,0% 11,2% 23,4% 1Q10 2Q10 3Q10 4Q10 1Q11 2Q11 1H10 1H11 Revenue of Services Evolution Highlights 1Q10 – 2Q11 Growth: +286,7% + 222% 1Q10 2Q10 3Q10 4Q10 1Q11 2Q11 1H10 1H11 % Gross Revenue 24 Gross Revenue Breakdown: 1H11 Development, 76.6% Management Fee, 0.8% 0-3 MW Projects, 22.1% Brokerage, 0.5%
Cash Position Loans and Financing (ex- securitization) Cash Position 2Q11 1Q11 4Q10 ∆∆∆∆ % ∆∆∆∆ % (R$'000) (a) (b) (c) (a/b) (a/c) Loans and Financing 408,630 348,307 302,374 17.3% 35.1% SFH 341,303 282,674 226,056 20.7% 51.0% Securitization of receivables 37,216 36,429 46,843 2.2% -20.6% FINAME and others 9,149 8,611 8,882 6.2% 3.0% Working Capital 20,962 20,593 20,593 1.8% 1.8% Cash and Cash Equivalents 381,768 355,410 190,852 7.4% 100.0% Net debt 26,862 -7,103 111,522 Net debt / Equity 2.3% -0.7% 14.1% SFH, 91.9% Securitizati on of receivables, 2.5% Working Capital, 5.6% 14,522 25,312 22,468 32,657 41,236 73,695 86,301 100,873 64,967 33,965 1Q09 2Q09 3Q09 4Q09 1Q10 2Q10 3Q10 4Q10 1Q11* 2Q11 Moving Average of Last 4 Quarters 25 Cash Burn¹ (R$ million) -36% -48% 1. Cash Burn: measured by the variation of the net debt, less capital increases * 1Q11: Adjusted by R$ 223,8 million of follow-on and R$ 40.3 million of dividends payment
Majority Shareholder Tarpon 15,0% Ridgecrest 6,9% GIC 6,9% Follow-On 20.8 million new shares were issued in the primary offer and 7.2 million sold in the secondary offering Increased the free float from 39.5% to 53.1%. Before Follow On After Follow On Controlling 60.5% Tarpon 15.0% Ridgecrest 8.0% Shareholder 46,9% Others 24,3% 540,3 1.808,3 Before Follow On After Follow On 86 195 224 414 Dec. / 10 May/ 11 Investments Funds Individuals 26 60.5% 8.0% GIC 3.6%Other 12.9% Average Daily Volume¹ (R$’000) +235%+76% Total # of Shareholders 1: five months before follow-on and five months after follow-on.
Shares Performance Since IPO Since IPO DIRR3: +4,2% IBOVESPA: -6,2% IMOB: -1,3% 80 100 120 140 160 5.000 6.000 7.000 8.000 9.000 10.000 PreçodaAção Volume(R$mil) 80 100 120 140 160 5.000 6.000 7.000 8.000 9.000 10.000 StockPerformace Volume(R$'000) Before Follow On After Follow On 27 0 20 40 60 80 - 1.000 2.000 3.000 4.000 5.000 19-nov-09 3-dez-09 16-dez-09 4-jan-10 15-jan-10 29-jan-10 11-fev-10 26-fev-10 11-mar-10 24-mar-10 7-abr-10 20-abr-10 4-mai-10 17-mai-10 31-mai-10 15-jun-10 28-jun-10 12-jul-10 26-jul-10 10-ago-10 24-ago-10 13-set-10 30-set-10 14-out-10 27-out-10 10-nov-10 26-nov-10 9-dez-10 27-dez-10 10-jan-11 21-jan-11 4-fev-11 17-fev-11 2-mar-11 17-mar-11 30-mar-11 12-abr-11 27-abr-11 10-mai-11 23-mai-11 3-jun-11 16-jun-11 30-jun-11 PreçodaAção Volume(R$mil) Volume (R$ mil) 0 20 40 60 80 - 1.000 2.000 3.000 4.000 5.000 18-Nov-09 02-Dec-09 15-Dec-09 30-Dec-09 14-Jan-10 28-Jan-10 10-Feb-10 25-Feb-10 10-Mar-10 23-Mar-10 06-Apr-10 19-Apr-10 03-May-10 14-May-10 28-May-10 14-Jun-10 25-Jun-10 08-Jul-10 23-Jul-10 06-Aug-10 23-Aug-10 10-Sep-10 29-Sep-10 13-Oct-10 26-Oct-10 09-Nov-10 25-Nov-10 08-Dec-10 23-Dec-10 07-Jan-11 20-Jan-11 03-Feb-11 16-Feb-11 01-Mar-11 16-Mar-11 29-Mar-11 11-Apr-11 26-Apr-11 09-May-11 20-May-11 02-Jun-11 15-Jun-11 29-Jun-11 StockPerformace Volume(R$'000) Average Volume (21 days) Direcional Ibovespa IMOB
28 Appendix 28
115 120 500 600 Rising Income ▲ Basic Goods Basket ▲ Real Minimum Wage ▲ Average Wage (Monthly) HOUSEHOLDS’ DISPOSABLE INCOME (Jan/03 – Aug/10) Emerging Class C EMERGING CLASS C (1) (% households, 2003 – 2009) Positive Job Market Trends Poised to Capitalize on Soaring Demand + + Brazil’s social upward mobility has favored the sector ‘04-’10 EMPLOYMENT GROWTH (%, Jan/04 – Nov/10) 50% 58% 27% 38% 3% 6% 9% 12% 15% Jan-03 Oct-03 Jul-04 Apr-05 Jan-06 Oct-06 Jul-07 Apr-08 Jan-09 Oct-09 Jul-10 Apr-11 90 95 100 105 110 - 100 200 300 400 jan/03 out/05 jul/08 abr/11 29 The steady increase of household disposable income, along with a higher availability of housing credit, drives the search for new homes 29 million individuals entered the class C income segment in the last 6 years, and 18 million are expected to join it in the next 5 years Source: FGV (A Nova Classe Média: O Lado Brilhante dos Pobres), DIEESE, IPEA and McCann Erickson do Brasil 1. Households earning R$1,126 to R$4,854 per month. 2.2x 1.8x UNEMPLOYMENT RATE (%, 12-month moving average) 37% 2003 2009 2014 66mm 95mm +29mm 113mm +18mm -3% Total Formal Informal Jan-04 - Abr-11 % Min 5,3% Max 13,1% Nov/10 6,4% Average of 12M 6,4%
Corporate Governance Board of Directors Shareholderes ► Own Governance Standards ► Nominate Members to the Board of Directors Advisory Committees ► Nominated by the Board of Directors ► Not deliberative Investment Committee Finance Committee Compensation Committee ► Fixed Assets ► Diversification ► Mergers and Acquisitions ► Cash Management Policies ► Capital Structure ► Risk Management Board of Executive Officers Operations ► Not deliberative ► Bi-monthly meetings or ad-hoc Deliberative Committees ► Board of Directors + Directors + Guests ► Monthly meetings or ad-hoc Committee Investment Committees Engineering Committee Human Resource Committee ► Land bank purchases ► Launchings ► Pre-budget approval (release) ► Approval of budget and planning (beginning work) ► Performance Valuation ► Variable Compensation 30
Company Structure Engineering/ Construction Detailed Design Health, Safety & Environment AdministrativeSu pport Quality/ Technology AM DF,PA,RO MG,ES SP,RJ CFO / IR HR Budget/Supply/ Planning Shareholders Clients 31Source: Company Development / Commercial Viability Studies Market Support/Sales Conceptual Design / Products Legal (Real Estate) AM Special Projects (“0 – 3”) President CEO Legal (Corporate) Comunic. & Market. Corp. Sustainability/Cu stomer Relationship Guidelines Results Shareholders MG,ES DF,PA,RO SP,RJ Clients
Contacts Carlos Wollenweber CFO | IR Officer Lucas Bousas IR Analyst 32 IR Analyst Paulo Sousa IR Analyst www.direcional.com.br ri@direcional.com.br (55 31) 3214-6200 (55 31) 3214-6450

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12 Conferência Anual Santander

  • 1.
  • 2.
    Disclaimer This presentation maycontain forward-looking statements. Such forward-looking statements are and will be subject to many risks and uncertainties relating to factors that are beyond Direcional’s ability to control or estimate precisely, such as future market conditions, competitive environment, currency and inflation fluctuations, changes in governmental and regulatory policies and other factors relating to the operations of Direcional, which may cause actual future results of Direcional to differ materially from those expressed or implied in such forward-looking statements You are cautioned not to place undue reliance on these forward-looking statements, which speak only as of the date of this presentation. Such forward-looking statements shall not be construed as guarantee of future performance. Direcional does not undertake to publicly review or update these forward-looking statements in view of events or circumstances occurring after the date 2 undertake to publicly review or update these forward-looking statements in view of events or circumstances occurring after the date of this presentation This presentation does not constitute an offer, or invitation, or solicitation of an offer, to subscribe for or purchase any securities. Neither this presentation nor anything contained herein shall form the basis of any contract or commitment whatsoever This presentation and its contents are proprietary information and may not be reproduced or otherwise disseminated in whole or in part without Direcional’s prior written consent.
  • 3.
    652 2,227 5,359 9,360 12,364 Start-up in 1981 Industrialprojects acting as contractor to third parties IPO Over 30 Years of History A consistent track record and focus Capture significant market opportunities MCMV II Follow-on: $ 228.8 million for What’s Next? CAGR 06-10: 110% CAGR 06-10: 100% 67 176 710 783 1,067 Development of projects focused on the low-income market Beginning of large scale developments for the low-income market Operations expansion to PA, RO and ES IPO 32% growth in units launched from the previous year 57% growth in contracted PSV from the previous year 3 Source: Company Reports Units Launched Consolidation of a leading position in Manaus and Brasilia Establishment of own sales team Important geographic expansion: Brasília, Rio de Janeiro and Campinas 1981 - 2005 2006 2007 2008 2009 2010 2011 228.8 million for the Company Increasing liquidity PSV Launched (R$ mm) 67
  • 4.
    Management Team Ricardo ValadaresGontijo Chairman & CEO Ricardo Valadares Gontijo Chairman & CEO • Founder, CEO and Chairman of the Board 40 years of construction experience • Civil Engineer graduated by UFMG with Gold Medal Award. Ricardo Ribeiro Gontijo Commercial Officer Ricardo Ribeiro Gontijo Commercial Officer Roberto Senna General Manager Roberto Senna General Manager • Civil Engineer degree from The Universidade Federal da Bahia, MBA degree from FGV and specialization courses at the Wharton School - University of Philadelphia, and University of Carlifornia - Irvine. • Joined Odebrecht Group in 1979 and has held senior management positions in Brazil and abroad • He was President of Metro-Rio, Director of Telemar Holding and member of the Board of several companies of the group. • He was CEO of Bairro Novo, a real estate subsidiary from Odebrecht Group, focused on residential development and construction in the low income •Board Member and responsible for Marketing, Sales and New Business •Civil Engineer graduated by UFMG with the Gold Medal Award •Joined Direcional in 2004. 4 Commercial OfficerCommercial Officer Carlos Wollenweber CFO & IR Officer Carlos Wollenweber CFO & IR Officer Lucas Rocha Engineering Officer Lucas Rocha Engineering Officer Ana Carolina Huss Human Resources Officer Ana Carolina Huss Human Resources Officer •Joined Direcional in 2004. •Extensive experience in the Brazilian real estate market. •From 2007 to 2009, Controller of BR Properties •From 2005 to 2007, Financial Director of Valora •From 2001 to 2005, Financial Manager of Gafisa •Electrical Engineer graduated by PUC / SP has master degree in Economics and Finance at PUC / SP and MBA degree at MIT (Massachusetts Institute of Technology) •Responsible for the engineering department with more than 30 years of experience in construction •Holds a bachelor’s degree in Civil Engineering •Joined Direcional in 1985 • Psychologist, graduated at University Paulista, MBA in Business Management, post graduate in Knowledge Management at FVG and certified in Bright Link in professional coaching • Human Resources Manager at Natura Cosméticos and Accor Brasil • Responsible for the department ¨People and Organization¨ of the Bairro Novo, a company of the Odebrecht group.
  • 5.
    Shareholder’s Structure 46.9% 15.0% Filadélphia ParticipaçõesS.A. 1 GICTarpon2 Other 7.1% 24.1% Ridgecrest, LLC 6.9% 51. Holding owbed by Ricardo Valadares Gontijo and his family 2. Funds managed by Tarpon Investimentos S.A.
  • 6.
  • 7.
    Unique Footprint Strong footprintin markets with high growth potential, low competition and high barriers to entry Low competition in profitable markets Direcional: A Unique Business Model The best low-income player in Brazil The most profitable and efficient player in the low income sector ‘’’’‘ Highest efficiency and profitability in the sector 1st Annualized ROE¹ among peers ~25.8% of ROE ~22.6% of Net Margin 1st Net margin among peers 1 Track Record in Operating in the Low Income Over 30 years of experience Solid track record in 0-3 minimum wages projects Low capital commitment, solid margins and high ROIC Focus on Large Scale Projects Verticalized Business Model Strong expertise in large scale ventures Own work force Performance-based compensation Standardized and industrialized production on-site Large scale operations in the low income segments, with strict cost control and high margins 7Source: Company Report in the 4Q10 1. Annualized ROE: Annualized Quarter’s Net Profit / Average Shareholders' Equity in the same period 2 3 4
  • 8.
    Unique Footprint: HighGrowth Markets with Barriers to Entry Land Bank Composition Barriers to Entry Detailed mapping of logistics and supply Scarcity of Suppliers Industrialization of raw materials Vertically integrated model is rapidly replicated Direcional's Approach 1 Direcional is the leading company in underpenetrated markets with high growth potential AM 13.5% RO 3.9% PA 13.4% 8 Complex Logistics Detailed mapping of logistics and supply channels Large and vertically integrated projects Adverse Weather Conditions Pre-manufactured building materials adapted to diverse climates Expertise in coordinating construction cycle and weather demands Unskilled Labor Highly-trained workers Standardized and fully-integrated construction Compensation based on performance “MINHA CASA, MINHA VIDA” 49.9k units elegible for the program 73.4% of total Land bank Source: Company Report ES 1.5% MG 37.8% SP 6.4% DF 22.5% RJ 1.1% Popular, 52.8% Commercial, 4.2% Medium, 36.1% Upper Middle, 6.9% Segment Breakdown (PSV)
  • 9.
    Focus on LargeScale Projects … Strong and unique expertise in large scale ventures 2 Large Scale Projects¹ Main Advantages of Scale Economies of Scale Industrialization process of raw materials Manaus Total Ville AM Under construction 3.848 2.136 Total Ville Bella Cittá PA Under construction 4.938 3.316 Total Ville Marabá PA Under construction 5.604 4.664 Allegro Residencial Club AM Under construction 1.648 704 Setor Total Ville DF Under construction 4.362 2.064 Total Ville Porto Velho RO Under construction 2.852 1.868 Dream Park ES Under construction 1.034 752 Project Status Total Units Units to be launched 9Source: Company Report 1. Projects with more than 1,000 units Optimize construction processes Urbanized projects Lower Execution Risk Lower Inflation Risk78.3% of the units to be launched in large scale projects1 16 projects with close to 65 thousand units Eliza Miranda AM Under construction 1.406 128 Cachoeiras do Madeira RO Under construction 1.278 426 Total Ville Macaé RJ Under construction 1.145 399 Águas Claras DF To be Launched 1.148 1.148 Floramar MG To be Launched 1.172 1.172 Granjas Werneck MG To be Launched 15.000 15.000 Sítio São João MG To be Launched 2.500 2.500 Ferroeste MG To be Launched 2.388 2.388 Samambaia DF To be Launched 14.614 14.614 Total 64.937 53.279 Licensed Projects
  • 10.
    … Through aVerticalized Business Model More than 11,000 exclusive workers assuring quality, commitment, efficiency and cost control Verticalized Business Model Ability to Deliver 3 Best Execution in the SectorBest Execution in the Sector Construction DNAConstruction DNA Own Work Force VerticalizationVerticalization Standardized / Industrialization 10 Performance Based Compensation Capacity to Hire and Train Operational Team Lower Turnover On Schedule: Projects Delivered on Time With High Quality: Lower Maintenance Cost On Budget: Margin Stability Own Work Force Standardized / Industrialization Economies of Scale All projects are based on few designs Source: Company Report
  • 11.
    Unique Expertise inthe Low Income Segment Solid track record in all the low income segments Characteristics Developer approach ̶ Companies develop projects and sell units to customers Price above R$170 k / unit CAIXA does not facilitate customer financing Developer approach ̶ Companies develop projects and sell units to customers Price is capped at R$170 k / unit CAIXA facilitates customer financing Builder approach ̶ Homebuilders present projects to Caixa for evaluation and approval Normally land/infrastructure is given by local Government Price is capped at R$51 k / unit 4 Mid / Low Income Low Income (MCMV – 4-10 MW) Very Low Income (MCMV – 0-3 MW)+ + 11 1. Company estimates – maximum cash exposure in % of total PSV Main Players Equity Commitment1 Units Launched 2010 ~5%~15%~20% ~10% 60% / 7,391 units12% / 1,503 units 28% / 3,470 units PSV Launched 2010 36% / R$ 380 mm23% / R$ 245 mm 41% / R$ 441 mm
  • 12.
    Top Notch OperationalPerformance Direcional has been confirming its efficient cash cycle with sound financial results Efficient Cash Cycle Highest Results in the Sector Land Acquisition Sales Speed Land Acquisition Sales Speed 38% VSO80% Swaps 19% 24% MRV PDG Helbor 12 Efficient Cash Cycle Management Cash Collection Austere Budget Client Financing Construction Financing Cash Collection Austere Budget Client Financing Construction Financing Avg. Unit Selling Price NetMargin2010 Source: Company Reports in the 4Q10 80-100% of construction cost G&A of 6% of Revenues 4% 9% 14% - 150.000 300.000 450.000 CCDI Rodobens PDG Even Inpar Cyrela Tecnisa Rossi Trisul Gafisa
  • 13.
  • 14.
    MCMV Program Highlights Thelargest housing program of the Brazilian history First Priority of the New Government and currently at full speed with Dilma’s recent election The 0-3 segment has expanded three-fold, reaching 1.2 Growth Drivers: MCMV 2nd Phase 0-3 segment presents an outstanding growth opportunity 600,000 200,000 200,000 BRL 34 billion 1.000.000 uniits BRL 72 billion 2.000.000 units 4-6 Wages 7-10 Wages Total (R$'000) % Direcional (R$'000) Residencial meu Orgulho - 1ª Fase * Jun Manaus -AM 190,598 190,598 3,511 Bairro Carioca Oct Rio de Janeiro - RJ 114,240 114,240 2,240 Residencial Jardim Alterosa Dec Belo Horizonte - MG 75,440 75,440 1,640 Total 2010 380,278 380,278 7,391 2010 Projects Launch Date City - State PSV Nr. of Units The 0-3 segment has expanded three-fold, reaching 1.2 million units The regional distribution of the program should benefit Direcional 14 400,000 1,200,000400,000 200,000 MCMV1 MCMV2 0-3 Wages
  • 15.
    Growth Drivers: SelectiveGeographic Expansion Direcional operates in Brazil’s most complex markets and expects to replicate this model in new attractive areas Development of 0-3 MW Projects Geographic Expansion Strategy New Sites Selection Criteria High Housing Demand Access to Credit Lines 15 Immediate gain of market share and visibility New projects leveraging on our unique business model Access to Credit Lines Operational Complexity & Region Expertise Land Availability
  • 16.
  • 17.
    158 288 300 511191 191 131 131 176 710 783 1,067 511 Launches +82% CAGR07-10: 82% +71% Launched PSV (R$ million) Launched PSV - Evolution (R$ million) Total (R$'000) % Direcional (R$'000) 1 Verano Residencial - 1st Phase April Belém - PA 36,968 36,931 184 539 Medium 2 Total Ville Macaé - 2nd Phase - RET 1 April Macaé - RJ 27,264 13,632 340 1,145 Popular 3 Parque Ponta Negra - 3rd Phase April Manaus - AM 47,711 47,706 137 820 Upper-Middle 4 Tulip Inn Savassi - Hotel June Belo Horizonte - MG 86,238 85,376 240 240 Commercial 5 Total Ville Vida Nova - 3rd Phase - RET 1 June Manaus - AM 56,400 56,344 752 3,848 Popular 6 Bella Città Algodoal - 3rd Phase - RET 1 June Marituba - PA 48,000 47,995 640 4,938 Popular 302,581 287,984 2,293 11,530 1 Acquisition of Project - Parque Ponta Negra May Manaus - AM 131,289 131,289 545 n/a Medium 433,870 419,272 2,838 11,530 # of Units Launched Total Units (All Phases) Segment Launches 2Q11 Launches + Project Acquisition 2Q11 Projects Date City - State PSV 2Q10 2Q11 1H10 1H11 Development 0-3 mw projects ProjectAcquisition 176 2007 2008 2009 2010 1H11 17
  • 18.
    54.6% 65.6% 58.1% 56.2% 45.4% 37.7% 9.7% 34.4% 4.2% 34.0% 2Q102Q11 1H10 1H11 Launches Breakdown Launches (Segment Breakdown – PSV) Launches (Geographic Breakdown - PSV) 54,6% 38,9% 7,7% 41,0% 30,0% 35,9% 37,5% 12,8% 26,7% 34,8% 16,6% 4,2% 9,3% 29,6% 20,0% 2Q10 2Q11 1H10 1H112Q10 2Q11 1H10 1H11 North Midwest Southeast Tulip Inn Savassi - Hotel – PSV R$ 85.4 MM Total Ville Vida Nova 3rd phase – PSV R$ 56.4 MMVerano Residencial – PSV R$ 36.9 MM 18 Parque Ponta Negra – PSV R$ 47.7 MMTotal Ville Macaé 2nd phase – PSV R$ 13.6 MMBella Cittá Algodoal – PSV R$ 47.9 MM 2Q10 2Q11 1H10 1H11 0 - 3 MW Popular Medium Upper Middle Commercial
  • 19.
    127 441 661 1,037 344133 169 297 344 191 191 89 89 Sales CAGR07-10: 101% +27% +16% Contracted PSV (R$ million) Contracted PSV - Evolution (R$ million) 58,9% 39,1% 24,2% 24,3% 36,5% 30,4% 9,2% 47,2% 13,7% 49,4% 7,8% 11,8% 10,8% 10,4% 16,7% 9,7% 2Q10 2Q11 1H10 1H11 0 - 3 MW Popular Medium Upper Middle Commercial 77.9% 48.1% 72.8% 40.1% 13.2% 19.8% 17.0% 21.7% 8.9% 32.1% 10.2% 38.2% 2Q10 2Q11 1H10 1H11 North Midwest Southeast 2007 2008 2009 2010 1H112Q10 2Q11 1H10 1H11 Development 0-3 mw projects Project Acquisition 19 Sales (Geographic Breakdown) Sales (Segment Breakdown)
  • 20.
    33.8% 38.3% Sales Speed Sales OverSupply of 18.5% in 2Q11. Under RET1, a purchase agreement only becomes effective after CEF approves the mortgage credit facility. If we do not consider RET1 projects, Sales Over Supply would achieve 20.6%, whereas 51%* of the units launched in 2Q11 were sold during the same quarter Sales Over Supply (VSO) (Total PSV) Sales Speed (%) (Units) 20% 31%2T11 51%* 20.6% 23.7% 19.4% 20.8% 27.6% 22.1% 18.5% 1Q10 2Q10 3Q10 4Q10 1Q11 2Q11 With 0.3. MW project Without 0.3. mw project 20 2Q10 and 4Q10: the sales speed was positively impacted by the immediate recognition 0-3 m.w. construction contracts 2Q11: was inegatively mpacted by the RET1 projects, in which sales are subject to the mortgage facility approval from CEF. * Not considering RET1 projects Ex-RET1 project 89% 17% 87% 48% 4% 27% 4% 21% 3% 14% 1%2T10 3T10 4T10 1T11 3M 6M 9M 12M 15M 69% 92% 67% 97% 51%*
  • 21.
    Concluded Projects -2Q11 Total (R$'000) % Direcional (R$'000) 1 Equilibrium Manaus - AM 49,501 43,561 136 2 Águas do Madeira Porto Velho - RO 61,520 40,973 426 3 Grand Prix Manaus - AM 42,026 36,983 192 4 Lake View Resort Brasília - DF 89,513 87,812 232 5 Garden Club - 1st Phase Porto Velho- RO 34,394 27,515 313 6 Dream Park Serra - ES 44,629 35,704 282 Completed Projects - 2Q11 321,584 272,547 1,581 Completed Projects - 2Q11 City - State PSV # of Units 21 Completed Projects - 2Q11 321,584 272,547 1,581
  • 22.
    22 Operating and FinancialsHighlights 1H11 and 2Q11 22
  • 23.
    Highlights 158 288 300 511191 191 131 131 2Q10 2Q111H10 1H11 176 710 783 1,067 511 2007 2008 2009 2010 1H11 +82% CAGR 07-10: 82% +71% Launched PSV (R$ million) Launched PSV - Evolution (R$ million) 102,3 263,2 377,6 781,9 478,7 21,1% 24,5% 22,5% 22,6% 19,1% 0,0% 5,0% 10,0% 15,0% 20,0% 25,0% 30,0% 0,0 100,0 200,0 300,0 400,0 500,0 600,0 700,0 800,0 900,0 2007 2008 2009 2010 1H11 Adjusted net Margin (%) 23 2Q10 2Q11 1H10 1H11 Development 0-3 mw projects ProjectAcquisition 2007 2008 2009 2010 1H11 +48% +55% Net Revenues (R$ million) CAGR: 97,0% Net Revenues - Evolution (R$ million) 165 245 308 479 2Q10 2Q11 1H10 1H11
  • 24.
    14,9 20,7 33,048,2 56,8 57,7 35,6 114,5 10,1% 12,2% 15,2% 17,7% 23,8% 23,0% 11,2% 23,4% 1Q10 2Q10 3Q10 4Q10 1Q11 2Q11 1H10 1H11 Revenue of Services Evolution Highlights 1Q10 – 2Q11 Growth: +286,7% + 222% 1Q10 2Q10 3Q10 4Q10 1Q11 2Q11 1H10 1H11 % Gross Revenue 24 Gross Revenue Breakdown: 1H11 Development, 76.6% Management Fee, 0.8% 0-3 MW Projects, 22.1% Brokerage, 0.5%
  • 25.
    Cash Position Loans andFinancing (ex- securitization) Cash Position 2Q11 1Q11 4Q10 ∆∆∆∆ % ∆∆∆∆ % (R$'000) (a) (b) (c) (a/b) (a/c) Loans and Financing 408,630 348,307 302,374 17.3% 35.1% SFH 341,303 282,674 226,056 20.7% 51.0% Securitization of receivables 37,216 36,429 46,843 2.2% -20.6% FINAME and others 9,149 8,611 8,882 6.2% 3.0% Working Capital 20,962 20,593 20,593 1.8% 1.8% Cash and Cash Equivalents 381,768 355,410 190,852 7.4% 100.0% Net debt 26,862 -7,103 111,522 Net debt / Equity 2.3% -0.7% 14.1% SFH, 91.9% Securitizati on of receivables, 2.5% Working Capital, 5.6% 14,522 25,312 22,468 32,657 41,236 73,695 86,301 100,873 64,967 33,965 1Q09 2Q09 3Q09 4Q09 1Q10 2Q10 3Q10 4Q10 1Q11* 2Q11 Moving Average of Last 4 Quarters 25 Cash Burn¹ (R$ million) -36% -48% 1. Cash Burn: measured by the variation of the net debt, less capital increases * 1Q11: Adjusted by R$ 223,8 million of follow-on and R$ 40.3 million of dividends payment
  • 26.
    Majority Shareholder Tarpon 15,0% Ridgecrest 6,9% GIC 6,9% Follow-On 20.8 million newshares were issued in the primary offer and 7.2 million sold in the secondary offering Increased the free float from 39.5% to 53.1%. Before Follow On After Follow On Controlling 60.5% Tarpon 15.0% Ridgecrest 8.0% Shareholder 46,9% Others 24,3% 540,3 1.808,3 Before Follow On After Follow On 86 195 224 414 Dec. / 10 May/ 11 Investments Funds Individuals 26 60.5% 8.0% GIC 3.6%Other 12.9% Average Daily Volume¹ (R$’000) +235%+76% Total # of Shareholders 1: five months before follow-on and five months after follow-on.
  • 27.
    Shares Performance SinceIPO Since IPO DIRR3: +4,2% IBOVESPA: -6,2% IMOB: -1,3% 80 100 120 140 160 5.000 6.000 7.000 8.000 9.000 10.000 PreçodaAção Volume(R$mil) 80 100 120 140 160 5.000 6.000 7.000 8.000 9.000 10.000 StockPerformace Volume(R$'000) Before Follow On After Follow On 27 0 20 40 60 80 - 1.000 2.000 3.000 4.000 5.000 19-nov-09 3-dez-09 16-dez-09 4-jan-10 15-jan-10 29-jan-10 11-fev-10 26-fev-10 11-mar-10 24-mar-10 7-abr-10 20-abr-10 4-mai-10 17-mai-10 31-mai-10 15-jun-10 28-jun-10 12-jul-10 26-jul-10 10-ago-10 24-ago-10 13-set-10 30-set-10 14-out-10 27-out-10 10-nov-10 26-nov-10 9-dez-10 27-dez-10 10-jan-11 21-jan-11 4-fev-11 17-fev-11 2-mar-11 17-mar-11 30-mar-11 12-abr-11 27-abr-11 10-mai-11 23-mai-11 3-jun-11 16-jun-11 30-jun-11 PreçodaAção Volume(R$mil) Volume (R$ mil) 0 20 40 60 80 - 1.000 2.000 3.000 4.000 5.000 18-Nov-09 02-Dec-09 15-Dec-09 30-Dec-09 14-Jan-10 28-Jan-10 10-Feb-10 25-Feb-10 10-Mar-10 23-Mar-10 06-Apr-10 19-Apr-10 03-May-10 14-May-10 28-May-10 14-Jun-10 25-Jun-10 08-Jul-10 23-Jul-10 06-Aug-10 23-Aug-10 10-Sep-10 29-Sep-10 13-Oct-10 26-Oct-10 09-Nov-10 25-Nov-10 08-Dec-10 23-Dec-10 07-Jan-11 20-Jan-11 03-Feb-11 16-Feb-11 01-Mar-11 16-Mar-11 29-Mar-11 11-Apr-11 26-Apr-11 09-May-11 20-May-11 02-Jun-11 15-Jun-11 29-Jun-11 StockPerformace Volume(R$'000) Average Volume (21 days) Direcional Ibovespa IMOB
  • 28.
  • 29.
    115 120 500 600 Rising Income ▲ BasicGoods Basket ▲ Real Minimum Wage ▲ Average Wage (Monthly) HOUSEHOLDS’ DISPOSABLE INCOME (Jan/03 – Aug/10) Emerging Class C EMERGING CLASS C (1) (% households, 2003 – 2009) Positive Job Market Trends Poised to Capitalize on Soaring Demand + + Brazil’s social upward mobility has favored the sector ‘04-’10 EMPLOYMENT GROWTH (%, Jan/04 – Nov/10) 50% 58% 27% 38% 3% 6% 9% 12% 15% Jan-03 Oct-03 Jul-04 Apr-05 Jan-06 Oct-06 Jul-07 Apr-08 Jan-09 Oct-09 Jul-10 Apr-11 90 95 100 105 110 - 100 200 300 400 jan/03 out/05 jul/08 abr/11 29 The steady increase of household disposable income, along with a higher availability of housing credit, drives the search for new homes 29 million individuals entered the class C income segment in the last 6 years, and 18 million are expected to join it in the next 5 years Source: FGV (A Nova Classe Média: O Lado Brilhante dos Pobres), DIEESE, IPEA and McCann Erickson do Brasil 1. Households earning R$1,126 to R$4,854 per month. 2.2x 1.8x UNEMPLOYMENT RATE (%, 12-month moving average) 37% 2003 2009 2014 66mm 95mm +29mm 113mm +18mm -3% Total Formal Informal Jan-04 - Abr-11 % Min 5,3% Max 13,1% Nov/10 6,4% Average of 12M 6,4%
  • 30.
    Corporate Governance Board ofDirectors Shareholderes ► Own Governance Standards ► Nominate Members to the Board of Directors Advisory Committees ► Nominated by the Board of Directors ► Not deliberative Investment Committee Finance Committee Compensation Committee ► Fixed Assets ► Diversification ► Mergers and Acquisitions ► Cash Management Policies ► Capital Structure ► Risk Management Board of Executive Officers Operations ► Not deliberative ► Bi-monthly meetings or ad-hoc Deliberative Committees ► Board of Directors + Directors + Guests ► Monthly meetings or ad-hoc Committee Investment Committees Engineering Committee Human Resource Committee ► Land bank purchases ► Launchings ► Pre-budget approval (release) ► Approval of budget and planning (beginning work) ► Performance Valuation ► Variable Compensation 30
  • 31.
    Company Structure Engineering/ Construction Detailed Design Health,Safety & Environment AdministrativeSu pport Quality/ Technology AM DF,PA,RO MG,ES SP,RJ CFO / IR HR Budget/Supply/ Planning Shareholders Clients 31Source: Company Development / Commercial Viability Studies Market Support/Sales Conceptual Design / Products Legal (Real Estate) AM Special Projects (“0 – 3”) President CEO Legal (Corporate) Comunic. & Market. Corp. Sustainability/Cu stomer Relationship Guidelines Results Shareholders MG,ES DF,PA,RO SP,RJ Clients
  • 32.
    Contacts Carlos Wollenweber CFO |IR Officer Lucas Bousas IR Analyst 32 IR Analyst Paulo Sousa IR Analyst www.direcional.com.br ri@direcional.com.br (55 31) 3214-6200 (55 31) 3214-6450