2. 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
(“LPS”) as of March 31st, 2013. 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 LPS 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 LPS 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.
LPS believes that based on information currently available to LPS management, the expectations and
assumptions reflected in the forward-looking statements are reasonable. Lastly, LPS expressly refuses any duty to
update any of the forward-looking statements contained herein.
2
4. Awards and recognitions | Recently
“The hearts of 96% of people
beat stronger for Lopes”
Top of Mind IBOPE
In research conducted in São Paulo, IBOPE Intelligence, revealed that1:
• 9 out of 10 residents of the city know the brand Lopes
• 96% would consider the brand when buying
• 67% had any contact with the company, and among these, 76% would recommend Lopes
The 200 best Brazilian companies | 2012 Época Negócios 360º Guide2
Evaluation of 6 scopes:
•
Financial results
•
HR Practices
•
Governance
•
Environmental
•
Process of innovation
•
Ranking:
Future vision
1) Survey conducted between Jul 26, 2012 and Aug 08, 2012.
50º: Lopes
68º: Homebuilder
85º: Homebuilder
96º: Homebuilder
104º: Shopping Mall
117º: Homebuilder
2) October, 2012 issue. Preparation: Fundação Dom Cabral.
4
5. Awards and recognitions| 2012
Top Imobiliário Award
Considered the main award of the real estate industry in Brazil
Lopes has been winning every Top Imobiliário since its first edition in 1993
Master Imobiliário Award
Award organized by Sindicato da Habitação de São Paulo (Secovi-SP) and Federação Internacional das
Profissões Imobiliárias, suported by Grupo Estado
Lopes was awarded in the segment “Institucional” by 2011 Annual Report of the Brazilian Real Estate Market
Ranking Valor 1000
Listed by Valor Econômico as one of the 1000 largest business groups in Brazil
Highlighted as the 20th higher net margin among all groups
8th place in value generation among service companies
IG/ Insper Award
Assertive M&A strategy, expanding the business to other regions of the country
Lopes was considered the largest company in real estate brokerage and consulting in Brazil, in the last five years
VII Award Relatório Bancário
CrediPronto! was awarded in the segment “Best Online File Management”
Highlight for the efficiency in the mortgage approval
5
6. The Brokerage Market Has No Other Company With Our History
and Track Record
Mr. Francisco Lopes
initiates its activities
intermediating
properties
First TV
advertisement for
a real estate
development
1935
40´s
50´s
The company’s first
logo
Launch one of the
first buildings under
the condominium
concept
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
Becomes reference in real
estate launchings and
presents its new logo
60´s
Start of long term
partnership with
Gomes de Almeida
Fernandez (Gafisa)
70´s
Introduction of the
concept of condominium
clubs
First “Top Imobiliário”
award, in 1993 – Largest
Brokerage Company
80´s
90´s
More than 300 clients in the
primary market (homebuilders)
divided between listed and nonlisted companies
5 acquisitions in the primary
market and 13 acquisitions in the
secondary market
The secondary market has
become responsible for 26% of
total sales
Breakeven point of LPS Brasil’s
stake in Credipronto! in 4Q12
Credipronto! has reached
R$ 2.8 billion in average portfolio
balance on March 2013
Lopes’ follow-on
00´s
2010s
Lopes becomes an important player at the
segment of gated communities
Identification of Marginal
7 acquisitions in the primary market
Pinheiros as an attractive
Triples in size in a decade, strengthening its
area and launch one of
leadership
the first buildings in the
region
Wins its 16th consecutive “Top Imobiliário”
Start up of sales of hotel
award
condominium (Flats)
Lopes’ IPO
Partner of Grupo Espírito
Lopes starts its geographic expansion process
Santo in selling one of the Lopes’ website become leader on real state
largest launching in Lisboa:
market
Parque dos Príncipes
Joint Venture with Itaú Bank in order to create
CrediPronto, our mortgage company
6
7. LPS Brasil
Investment Highlights
Asset Light
Services company
Low execution risk
Top
management
team of industry
Unique position
in the primary
market Brazilian
Unique
opportunity
to consolidate
the secondary
market
CrediPronto!
Mortgage company
with Highest %
growth of Brazil
since 2009.
7
8. LPS Brasil: Unique Business Platform
Primary Market
Secondary Market
Mortgage Loan
+
Low, mid and high-income segments
Focus on secondary market, with a
unique model of own stores and a
network of licensed brokers
Growth through acquisitions
Joint Venture with Banco Itaú to
provide mortgage loans
Top vehicle to Invest in Brazilian Real Estate Market.
8
9. Management Team
Top Management Team in Industry
Partners & Associates
Partnership Program:
Summing up over 300
Years of Real Estate
Experience
Over 30 Partners & Associates with stock Investment
and long term alignment with company
Retention / Incentive tool for Top Performing
Employees
9
10. Asset Light
Service Based Business Model
Brokerage
Business
Primary
Market
Mortgage
Business
Secondary
Market
Immediate simple revenue
recognition
Asset light
Yearly Investment = Depreciation
Easy short term adjustment in
G&A, in case of a market
downturn.
Asset light
Inexistence of physical offices
(operates inside brokerage
stores)
Mortgage portfolio generates
recurring cashflow.
10
11. Virtuous Cycle of the Business Model Creating Strong Barriers to Entry
Solid Sales Performance
Wide Range of Products
Total transactions closed of R$ 4.4 billion in
1Q13, up 9% from 1Q12.
Most visited website in the real estate
sector: more than 15 million visitors in 2012.
Strong Established Base
Leading, nationally recognized brand
Present in 10 Brazilian states and in the Federal
District
Extensive distribution channel
Database with more than 2 million clients
More than 300 homebuilder clients
: unique platform to
develop the secondary market
CrediPronto! originatedR$ 381 million in
1Q13 and R$ 4 billion since its creation in
2008.
Leader in the primary market
: partnership with one
of the largest retail banks in the
world, Itaú-Unibanco
One-stop-shop: unique and
complete solution for the client
High Retention of Talent
Sales force of more than 15,000
independent brokers
Attracts and maintains its sales force
11
12. Institutional Website
Visits on www.lopes.com.br
• Over 15 million unique visitors in 2012
• Mobile version compatible with over 5 thousand
kinds of cell phones
• App for IPhone (more than 18,000 downloads)
• App for Android
• First brokerage company to launch an App for iPad
• Leader in presence in social networks
• More than 500,000 fans on Facebook
Strong investment
in online media
Source: Google Analytics,
The most visited
website in the real
estate market
Increased
generation of
Leads
Higher sales
conversion
12
16. Market Intelligence
Launches by Market – Brazil – 2012
28.5
79.7 billion / 183 thousand units
Total Brazil
11.1
Recife
1.1
1.0
0.7
0.3
Others
Goiânia
Units launched:
183 thousand/year ¹
1.3
Belém
Curitiba
Brazil
1.5
Natal
1.9
Manaus
2.0
Campinas
2.0
Vitória
2.2
Florianópolis
2.4
Santos
2.7
Salvador
3.0
P.Alegre
3.3
DF
BH
Greater RJ
MRSP
3.9
Fortaleza
10.8
Mexico
Units launched:
700 thousand/year ²
Brazil still represents a case for growth in the primary market
Source: ¹ LPS Market Intelligence
² Infonavit, Softec and others (considering new homes from homebuilders and self construction).
16
17. Significant Creation of Demand
Demographic Bonus
Population Pyramid (millions of people)
100%
80%
60%
40%
1950 1960 1970 1980 1990 2000 2010 2020 2030 2040 2050
Economically active population = 15 – 64 year-old
Dependence Index
2009
Social
2020e
Number of Families by Income Segment (millions)
Growth 2007 - 2030
classes1
(8%)
Population from 18 to 64 years old
31.7
18%
78%
29.1
160%
233%
291%
27.6
21.8
36%
2007A
15.5
64%
D and E classes
3.3
Up to
R$1k
R$1k to
R$2k
R$2k to
R$4k
2030E
11
8.4
82%
A, B and C classes
433%
R$4k to
R$8k
1.1
4.3
R$8k to
R$16k
0.3 1.6
Above
R$ 16k
The demographic bonus, combined with economic growth, will lead 35.6 million people to move up from D and E classes to A, B and C classes
over the next 10 years. These families will certainly be seeking better living conditions.
Source: IBGE, Bird, Febraban and FGV
1) Source: PNAD/IBGE Preparation: Bradesco. Take into account RO, AC, AM, AP, PA and RR regions
17
18. National footprint
Stake
(%)
Payment
(R$ million)
51%
29.21
51%
Federal District
greenfield
DF
SP
51%
142.22
Espírito Santo
MG
ES
RJ
60.52
São José dos
Campos
10.21
Rio de Janeiro
BA
15.01
51%
80%
PE
49.52
Campinas
greenfield
CE
CE
Payment
(R$ million)
100%
São Paulo
Stake
(%)
Bahia
60%
greenfield
11.32
Minas Gerais
Pernambuco
PR
greenfield
SC
RS
51%
100%
4.12
60%
8.12
5.51
Sul
Ceará
100%
41.02
51%
36.71
Lopes tracks developers’ regional movements, consolidates its position as the largest consulting and sales player
1) Considering the base scenario of the acquisition
2) Concluded Acquisitions
18
19. Sales Expertise in all Market Segments
Parque da Cidade – Sep/12
Location
São Paulo/SP
Sales
HIGH
612 un. – R$ 14,200/m²
Jardim das Perdizes – Mar/13
Location
São Paulo/SP
Sales
MEDIUM-HIGH
640 un. – R$ 8,200/ m²
Floratta – Sep/12
Location
Valinhos/SP
Sales
ECONOMIC
192 un. – R$ 3,820/m²
Porto Atlântico – Mar/13
Location
Rio de Janeiro/RJ
Sales
BUSINESS UNITS
804 un. – R$ 15,382/m²
Ibis Budget SP - Mar/13
HOTEL
Location
São Paulo/SP
Sales
163 un. – R$ 340,000
CASE
100% sold.
Developer : Odebrecht
CASE
70% sold.
Developer : PDG / Tecnisa
CASE
81% sold.
Developer : Engelux
CASE
100% sold.
Developer: Odebrecht
CASE
100% sold.
Developer :
You
19
20. Transactions Closed – Primary Market
Transactions Closed – Primary Market
(R$ billion)
14.4
9.4
14.4
14.4
8.7
4.9
3.0
2.5
2006
2007
2008
2009
2010
2011
2012
3.2
1Q12
1Q13
LPS Brasil took advantage of Listed Homebuilders growth through Capital raisings.
(equity + debt)
20
24. Lopes’ Confidence Index (LCI)
Lopes is the first company to create a Real Estate Consumer Confidence Index.
Lopes’ Confidence Indexes (LCI)
151
133
Expectation Index
The survey take into account the
opinion for the next 6 months about
the situation of Brazil’s economy, the
financials of household and the
intention to acquire a property
Lopes' Confidence Index
The survey take into account the
summation of the present situation
index and the expectation index
Mar-13
Jan-13
Feb-13
Dec-12
Oct-12
Nov-12
Sep-12
Jul-12
Aug-12
Jun-12
May-12
Apr-12
Feb-12
Mar-12
Jan-12
Dec-11
Nov-11
Oct-11
Sep-11
Jun-11
Aug-11
May-11
Apr-11
Feb-11
Mar-11
Jan-11
Dec-10
Oct-10
Nov-10
Sep-10
Jul-10
Aug-10
Jun-10
Apr-10
May-10
Mar-10
Jan-10
Feb-10
Dec-09
Nov-09
Oct-09
Sep-09
Aug-09
Jul-09
Jun-09
May-09
Apr-09
Mar-09
Jan-09
Feb-09
115
Present Situation Index
The survey take into account the
current opinion about the situation of
Brazil’s economy, the financials of
household and the intention to
acquire a property
Lopes’ Confidence Index intend to measure clients confidence, so Lopes can follow and anticipate, in the
short term, housing purchase tendency.
The sample has 524 interviews, with Grande São Paulo resident clients, which contacted Lopes in the last 3
months and are interested in purchasing a new home.
(basis: jan/2009 = 100)
Source: Lopes Market Intelligence
24
26. HABITCASA: Focus on Low Income Segment
Focus on Low Income Segment
Units up to R$ 300 thousand
The Habitcasa brand is applied in all Lopes’ markets
26
27. Transactions Closed by Price Segment – Primary and Secondary Markets
Transactions Closed
R$ 4.0 billion
R$ 4.4 billion
1Q12
1Q13
6%
10%
35%
40%
26%
31%
27%
24%
Number of Transactions Closed
12,708 units
11,404 units
1Q12
1Q13
9%
13%
35%
12%
43%
20%
32%
36%
27
29. Pronto!: A Natural Consolidator
Well Defined Acquisition Model with a Successful Track
Record
Unique Platform Poised for Growth
Present in 10 states and the Federal
District
– Covers 85% of the Brazilian GDP
in 2010, combined 1
– 74 own stores
– 126 licensed brokers
– Strong presence in São Paulo
and Rio de Janeiro
Solid client base
Appreciation and alignment of interests
– Earn-out
– 51% ownership stake
Successful acquisitions through the years
– 19 acquisitions since July 2010 focused on the
secondary market
– Benchmark for future partners
– Accretion
Strong internet presence
Unique one-stop-shop business model
Acquisition strategy:
– Companies with expertise in their regional markets
– Companies with limited access to capital
– Well positioned in relevant markets
– Widespread network
Diversified products in the portfolio
Natural Consolidator
1 – Source: IBGE
Potential synergies:
– Scale and reach: network effect
– Access to mortgage financing
– Expertise of LPS Brasil management
29
33. Mortgage Market
Mortgage Market as a % of GDP | Brazil 2011, others 2010
85%
63%
63%
62%
61%
60%
52%
41%
36%
23%
22%
16%
10%
5%
Source: Abecip, Brazil Central Bank, Federal Reserve, Haver. Preparation: Goldman Sachs
5%
33
34. Market Potential for Real Estate Financing
Quantitative Housing Shortage (millions of homes)
Growth Drivers
Housing deficit
– 7.2 million houses (2009)
7.9
6.7
Incipient mortgage loan market
6.3
5.4
Declining interest rates
5.8
Rising employees’ income
Growing availability of long-term funding
Increasing secondary market financing
Increasing family turnover
1991
Mortgage Loan Access (% by Social Class)2
2000
2006
2007
2008
Family Turnover3
9.0 – 10.0x
7.7%
5.0%
4.0x
3.0%
1.8x
1.7%
Classes A and B
Class C
Class D
Class E
Source: Bacen and ABECIP
Notes:
1 Data from 2006, except for Brazil (2009)
2 FGV’s Center for Social Studies, 2010
3 Represents the number of times a family moves to a different house during their lifetime. Source: Credit Suisse
G-7
Mexico
Brazil
34
35. Joint Venture Lopes Itaú
Lopes and Itaú created the first and biggest pure mortgage company of Brazil.
Direct and exclusive access to its
customer database
Seamlessly integrated operation with
Lopes’ sales process, including an
incentive compensation plan
Lopes media exposure
Leadership position
in their respective
markets
Management
Excellence
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
High Value Brands
Strengthening of mortgage origination and other related services.
35
36. Differentiated Model: One-Stop-Shop
Secondary Market: a significant potential for origination
Distinctive channel for clients in the secondary market
Focus
74 own stores and 126 licensed real estate brokers in 10
states and the Federal District
Over R$ 3.9 billion in financing
Relevance
Selective acquisitions to replicate the successful formula
used in the primary market
Incipient market in Brazil with huge expansion potential
Growth
Potential
33% of Pronto!’s contracted sales are financed by
Credipronto!
Synergies
50% of CrediPronto! transactions are originated through
Pronto!
Use of LPS Brasil’s platform and significant reduction in
CAPEX requirement
Winning Model
36
37. CrediPronto!
Volume of Origination
( R$ million)
Volume of origination accumulated1
( R$ million)
3,959
381
2,124%
18%
322
178
1Q12
1Q13
jan/10
mar/13
Portfolio Balance
( R$ million)
2,771
2,986
50%
The Average Portfolio
Balance in 1Q13 was R$ 2.8
billion.
Ending portfolio
balance 1Q12
1) Does not include amortization
Ending portfolio
balance 1Q13
37
38. CrediPronto!
Ending Portfolio Balance
(R$ MM)
2,986
2,771
2,492
2,266
1,989
1,756
1,454
1,162
881
707
mar/13
dec/12
sep/12
jun/12
mar/12
dec/11
sep/11
jun/11
mar/10
dec/10
517
sep/10
jun/10
392
The ending portfolio balance grew an average of 6.3% per month since jun/10 and it’s already
R$ 3 billion.
38
39. Credipronto!: Unique Partnership to Capture Mortgage Loan Market Potential
Business Highlights
Innovative Real Estate Financing Process
+
Market
Leader
Largest Private Bank
in Brazil
Credit Analysis
24 hours
Assessment of
the Property
Legal Analysis
Until 3
working
days
Issuance of the
Contract
2
working
days
3
working
days
Release of
Resources
5
working
days
Profit Sharing with limited credit risk
Leverage on LPS Brazil’s points of sale
Efficiency in Release of Credit
Differentiated process of approval and release of funds
Unprecedented credit in the market
Evolution of Origination (base 100 = Jan-10)1
Ranking of Real Estate Financing 1Q13 (R$ mm)
8,5% 7,9%
7,4% 7,5%
7,3%
6,4% 6,8% 6,9%
6,1% 5,7%
5,8% 5,1%
4,7%
506
10,0%
2,4% 2,4% 3,0% 2,8% 3,1% 2,8% 3,0% 2,4% 2,9% 2,5% 5,0%
1,4% 1,9% 1,7%
376
370 433
438 0,0%
416
411 432
245
168
241
177
145
243
147
144
179
198
189
251
245
209
Mercado
Market Share CDP!
2,020
381
-10,0%
1,639
125
1Q10 2Q10 3Q10 4Q10 1Q11 2Q11 3Q11 4Q11 1Q12 2Q12 3Q12 4Q12 1Q13
Credipronto!
7.9% Market Share*
20% of Itaú
-5,0%
209
100
8,628
1,411 1,396
1,102
249
-15,0%
Market Share CDP!
(Private Banks)
Caixa
Itaú
Banco do Santander Bradesco
Brasil
91
HSBC
Banrisul
44
Poupex
34
Citibank
High Growth Potential – Real Estate Financing equals only 5% of Brazilian GDP2
1 ABECIP
2 Bacen
* Excluding Caixa
39
43. 1Q13 Financial Highlights
Net Revenue
15%
86.0
1Q12
Net Income Attributable to Controlling
Shareholders before IFRS1
Net Margin (%)
98.7
1Q13
EBITDA2
EBITDA Margin (%)
19.2
13.8
16%
1Q12
24%
40%
30.9
24.9
19%
1Q13
28.9%
1Q12
31.3%
1Q13
1) We consider the net income adjusted by non cash IFRS 3 effects (Business Combination) the most accurate net income indicator. 2) Includes results from subsidiaries and companies under shared-control, in accordance
with equity accounting, and results from non-controlling shareholders. Note: EBITDA is not an accounting measure and does not represent the cash flow for the reported periods, and therefore should not be used as an alternative
to cash flow as a measure of liquidity. The Company’s EBITDA was calculated in accordance with CVM Instruction 52. Adjusted by non recurring effects with the closing of LPS Goiania.
43
44. 1Q13 Results
Results 1Q13 Before IFRS
(R$ thousand)
Lauches
Gross Service Revenue
Revenue from Real Estate Brokerage
Revenue to Accrue from Itaú Operations
Earn Out
Pronto!
CrediPronto!
Consolidated
84,685
24,398
3,287
112,370
81,060
24,398
3,287
108,745
3,625
-
-
3,625
-
-
-
-
Net Operating Revenue
74,415
21,439
2,895
98,749
(-)Costs and Expenses
(33,547)
(14,182)
(2,220)
(49,948)
(-)Holding
(14,190)
(4,088)
-
(18,278)
(-) Stock Option Expenses CPC10
(303)
-
-
(303)
(-) Expenses to Accrue from Itaú
(238)
-
-
(238)
-
961
(+/-) Equity Equivalence
(=)EBITDA
EBITDA Margin
(+/-) Other nonrecurring results
(-)Depreciation and amortization
(+/-) Financial Result
(-)Income tax and social contribution
(=)Net income before IFRS
Net Margin before IFRS
26,136
3,169
1,636
35.1%
14.8%
56.5%
31.3%
(826)
-
-
-
-
(3,443)
(2,672)
(771)
2,724
340
(1,659)
23,704
31.9%
(2,076)
663
3.1%
0
(2,256)
(620)
-21.4%
30,941
3,065
(5,991)
23,747
24.0%
(-) Non-controlling Shareholders
(4,526)
(=) Net Income Attributable to Controlling Shareholders Before IFRS*
19,221
Net Margin Controlling Shareholders
*We co nsider the net inco me ajusted by no n cash IFRS 3 effects (B usiness Co mbinatio n) the best net inco me indicato r
19.5%
44
46. CrediPronto!
(R$ thousands)
P&L* 2012
Total
Executed contracts
1,503,028
Opening portfolio
1,767,940
Closing portfolio
2,771,051
Average portfolio balance 1
2,069,854
Financial Margin
46,655
% Spread
2.3%
(-) Sales taxes
-3,756
(-) Total costs and expenses
-58,099
(-) Backoffice Expenses
-14,193
(-) Sales Expenses
-20,383
(-) Commissions paid
-14,574
(-) Insurance and claims (+/-)
-1,091
(+) Other revenues (Financ.)
288
(-) ADA
-8,146
(-) IRPJ/CSLL (Itaú Balance)
-6,636
(=) Net result
-21,836
% Net Margin
-50.90%
50% Profit Sharing
-10,918
(+) Retention of Commissions
2,972
CrediPronto! Result (LPS)
-7,946
1 – Weighted average portfolio balance
• The numbers of the managerial P&L were audited for 2012 by Ernst&Young and, due to its managerial nature, it does not follow accounting standards.
46
48. Allowance for Doubtful Accounts
Example of P&L with a financing contract
for a $200 unit:
Month 1
Month 2
Month 5
Month 8
Financial Margin
$100
$100
$100
$100
Expenses¹
-$60
-$60
-$60
-$60
Specific Allowance
-
-$5
-$25
+$200
Result
$40
$35
$15
$240
Recovery of
Property
Default
Sale of the
recovered
property
¹ Including general allowance
Ex:
Sale for
$300
Ex:
Sale for
$150
+$100: Profit for
the bank
-$50: Loss
of the bank
48
50. Lopes’ Contracted Sales Seasonality
41%
37%
31%
25%
21%
17%
2005
32%
29%
29%
22%
18%
23%
22%
14%
2006
2007
1Q
23%
33%
28%
24%
19%
16% 15%
2008*
2Q
30%
26%
25%
2009
* The seasonality can not be verified in 2008, because of the effects of the world financial crisis.
24%
19%
2010
3Q
27% 30%
2011
27%
26%
26%
Average of Historical
Seasonality of the
fourth quarter:
30%
21%
2012
4Q
50
51. Ownership Structure
Ownership Structure | Apr, 13
32%
45%
0.2%
Rosediamond
23%
Chairman and Vice Chairman
Management
Free Float
Total of 114,157,316 common shares
51
52. Company Roadmap
Long Term Strategic Goals
Mantain Leadership in Primary Market
Achieve dominant position in Secondary Market,
Growing from 26% to 40/50% of our Sales
Grow the Mortgage Portfolio, achieving high
profitability levels
Develop other Opportunities tied to Services in
Real Estate Market.
52
