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Corporate Presentation June 2013
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- 2. History and BusinessModel
- 3. 3 More Than 30Years of History 47% Filadélphia Participações S.A.1 Others 53% 155,298,749 ordinary shares 1. Holding owned by Ricardo Valadares Gontijo and family Industrial projects acting as contractor to third parties Important geographic expansion: Brasília, Rio de Janeiro and Campinas Development of projects focused on the low- income segment Beginning of large scale projects for the low- income segment Consolidation of a leading position in Manaus and Brasilia 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 Establishment of own sales team 1981 - 2005 2006-2007 2008 2009 2010 2011 Record net revenue of R$ 1.1 Billion, a 37% YoY growth MCMV II Follow-on: $ 228.8 million for the Company Increasing stock liquidity The most relevant player in the MCMV 2nd phase Level 1 More than R$ 1 billion on projects delivered during 2012 2012 LatinAmerican Asia 13.8% NorthAmerican 4.1% Europe 15.8% Brazil 17.2% 49.1% Free Floating ( others 53%)
- 4. Unique Footprint Strongfootprint in markets with high growth potential, low competition and high barriers to entry Low competition in profitable markets Track Record in Operating in the low- Income segment Over 30 years of experience Solid track record in MCMV Level 1 projects Low equity 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 4 Direcional: A Unique Business Model The most profitable and efficient player in the low-income sector ‘’’’ High efficiency and profitability ROE¹ among the highest in the sector 1 2 3 5 Annualized ROE¹: 17% 1. Annualized ROE: Annualized 1Q13 Net Profit / Average Shareholders' Equity in the same period The best low-income player in Brazil Industrialization Aluminum panels and concrete walls technology 45 days to develop a five floors building 4
- 5. 2012- 2011- D% Launched PSV % Direcional BRL million 2,346 1,447 62% Contracted PSV % Direcional BRL million 2,267 1,230 84% Sales Over Supply (VSO) % PSV 71.7% 58.8% 12.9 p.p. Net Revenues BRL million 1,449 1,107 31% Adjusted¹ Net Income BRL million 227 199 14% Adjusted¹ Net Margin % 15.6% 17.9% -2.3 p.p. Main Figures 51 -Adjusted by non-cash expenses (Stock-Options Program).
- 6. 1Q13 1Q12 D% Launched PSV % Direcional BRL million 420 143 193% Contracted PSV % Direcional BRL million 530 133 300% Sales Over Supply (VSO) % PSV 40.7% 16.1% 24.6 p.p. Net Revenues BRL million 389 344 13% Adjusted¹ Net Income BRL million 57 54 5% Adjusted¹ Net Margin % 14.7% 15.8% -1.1 p.p. 1Q13 - Main Figures 61 -Adjusted by non-cash expenses (Stock-Options Program).
- 7. 7 The Growth ComingFrom The Very Low-Income Total PSV Launched– Track Record (R$ million) 783710 2008 2012 CAGR +35% 1,067 2009 2,346 2010 1,447 2011 Development MCMV Level 1 Launched PSV - MCMV Level 1 (R$ million) 924 634 2010 686 20092008 710 2012 698 2011 CAGR 0% Launched PSV - Development (R$ million) 0 CAGR +123% 522 2012 380 20112010 1,647 2009 149 2008
- 8. Very Low IncomeProjects: # of projects: 19 # of Units: 45,757 Total PSV: R$ 2,954.5 MM 8 MCMV Level 1 – Government’s first priority 2,600,000 +300% MCMV2 1,600,000 800,000 200,000 MCMV1 1,000,000 400,000 400,000 200,000 Income < R$1.6k (MCMV Level 1) Income < R$3.1k Income < R$ 5.0k MCMV1 & MCMV2 (# of units) 1st Phase MCMV 2nd Phase MCMV # of projects: 3 # of Units: 7,391 Total PSV: R$ 380.3 million # of projects: 16 # of Units: 38,366 Total PSV: R$ 2,574.2 MM + Direcional`s Contracted MCMV – Level 1 (PSV million) Direcional`s Contracted MCMV – Level 1 (Units) +215% +333% 1Q13 405 2012 1,647 2011 522 2010 380 +38% +214% +162% 8,872 2012 23,234 70,894 2011 58,892 2010 7,391 51,451 Average Price
- 9. 9 Focus on Performance 33% 49% 3Q11 45% 59% 7% 43% 8% 1Q11 29% 63% 8% 49% 7% 2Q11 7% 31% 60% 75% 18% 4Q12 70% 23% 7% 1Q133Q124Q11 8% 41%36% 56% 2Q12 9%9% 1Q12 50% Units Under Construction by Construction Method (% of Units) 1 Aluminum mold and concrete walls method Conventional Structure (Concrete Pillars) Concrete Blocks Industrial Construction¹ 1Q13 1Q12 D % Units Under Construction 55,119 35,899 54% % of Industrialization (# of units) 75% 50% 24 p.p. Construction Sites 49 37 32.4% Average # of Units by Construction Sites 1,125 970 16% # of Cities 13 10 30%
- 10. Development Development PSV -Track Record (Units) 36 1,606 2012 5,576 3,142 2011 1,705 5,296 2010 2,337 1Q13 4,259 Delivered Launched
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- 12. Launches Breakdown –1Q13 12 Launches by Segment (% PSV) Launches by Region (% PSV) 42% 25% 11% 23% 41% 20122011 30% 61% 9% 1Q13 16% 84% 1Q12 32% 26% Northeast Midwest North Southeast 68% 16%32% 5% 14%4% 1Q12 4% 96% 1Q13 8% 40% 32% 2011 7% 70% 2012 4% Low-Income MCMV Level 1 Medium Commercial Upper-Middle MG 5 AP 3 1 PA 4 2 143 +193% 1Q13 420 405 15 1Q12 MCMV Level 1 Development Launched PSV (R$ million)
- 13. 13 Sales and VSO– 1Q13 1Q13 40.7% 15.2% 4Q12 55.4% 15.2% 3Q12 41.3% 18.7% 2Q12 36.5% 21.2% 1Q12 16.1%16.1% With MCMV Level 1 project Without MCMV Level 1 project 1Q12 90%10% 51% 22% 5% 2% 2Q12 94%88% 3% 2% 1% 3Q12 97%95% 1% 1% 4Q12 98%98% 0% 1Q13 100% 3 M 6 M 9 M 12 M 15 M +300% 1Q13 530 405 125 1Q12 133 133 Sales by Period of Launching - 1Q13 (% PSV – Ex-MCMV Level 1) 8% 2011 19% <2011 34% 1Q12 3% 2Q128% 3Q12 4Q12 25% 1Q13 4% Contracted PSV (R$ million) Sales-over-supply (VSO) (% Units) Sales Speed (% Units) Record sales in 1Q13; Sales were 26% higher than launched PSV; SoS of 40.7%. MCMV Level 1 Development
- 14. 14 Land Bank 59,5%are large scale projects (over 1,000 units) 74,6% are eligible for the MCMV Program 76,7% were acquired by physical or financial Swap Average acquisition price of 9,4% over PSV R$ 6.4 Billion 63,461 units Land Bank by Segment (% PSV) Land Bank Track Record in 1Q13 (R$ million in PSV) 2 269 6,447 -286 1Q13Launches 15 Review of Assumptions Acquired Land Bank 2012 6,734 Land Bank by Region (% PSV) Type of Payment (1Q13 – % PSV) Swap 58.9% Cash41.1% 53% Low-Income Upper-Middle 6% Medium 38% Commercial3% Acquisition of 1 plant of land with total PSV of R$ 43.5 million. ES 2% AM 14% MG 40% RO 5% SP 7% PA 9% DF 21%GO 2%
- 15. 15 Inventory 1Q13 1% 2012 40% 2011 29% 201012% <2010 2% Concluded Units 16% Midweast17.8% Southeast 33.0% North 49.1% Inventory Track Record (R$ million) Inventory by Launch Period (% PSV) Inventory Market Value by Region (% PSV) 1Q13: Reduction of 17% in total inventory; 1Q13: Reduction of 19 % in inventory of completed units. 667 -7.5% -16.7% 1Q13 561 106 2012 800 670 130 2011 721 668 53 Under Construction Concluded Units Under Construction 560.870 84,1% 1.848 78,6% Finished Units 105.714 15,9% 502 21,4% Total 666.584 100,0% 2.350 100,0% Inventory % Units in Inventory % PSV in Inventory (BRL'000) % Direcional
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- 17. 17 Financial Results 396 +10.9% +6.3% 1Q13 246 150 4Q12 373 237 136 1Q12 357 259 98 Net Revenue (R$million) 2009 378 365 13 2008 263 255 8 2007 102 102 CAGR +68% 2012 1,368 914 454 2011 1,072 806 266 2010 782 668 114 Net Revenue – Track Record1 (R$ million) Development Services Revenue from Services – Track Record1 (R$ million) 150136120103988272585748332115 1Q13 39.2% 4Q12 39.9% 3Q12 31.3% 2Q12 30.8% 1Q12 27.5% 4Q11 27.1% 3Q11 23.7% 2Q11 23.0% 1Q11 23.8% 4Q10 17.7% 3Q10 15.2% 2Q10 12.2% 1Q10 10.1% Revenue from Service% of Gross Revenue Revenues from Real Estate Sales Revenues from Services 1.Non adjusted in accordance to the new consolidation account rules
- 18. 18 Operational Consistency Adjusted¹ GrossProfit (R$ million) 112 +3.8% 1Q13 97 15 29% 1Q12 108 96 12 31% Gross Profit Interest capitalized in costs Adjusted Gross Margin¹ Gross Revenue (R$ million) 38% 28% 396 +10.9% 1Q13 246 150 1Q12 357 259 98 Revenues from Real Estate Sales Revenues from Services % from Services 1.Adjusted by non-cash expenses (Stock-Options Program). 2. Aluminum mold and concrete walls method Adjusted¹ Net Income (R$ million) 15% 16% +5% 1Q13 57 1Q12 54 Adjusted¹ Net Margin Adjusted¹ Net Income
- 19. 19 Financial Results 1. Adjustedby non-cash expenses (Stock-Options Program). Adjusted¹ G&A (R$ million) Sales Expenses (R$ million) 97 73 232424 -1.8% +32.6% 2012 6.7% 2011 6.6% 1T13 6.0% 4T12 6.4% 1T12 6.9% 40 28 699 -32.6% +42.3% 2012 2.8% 2011 2.6% 1T13 1.6% 4T12 2.4% 1T12 2.6% Sales Expenses% Net RevenueAdjusted¹ G&A% Net Revenue +4.4% 30.4% 2012 317 21.9% 2011 243 22.0% 1T13 83 21.4% 4T12 83 22.2% 1T12 80 23.2% Adjusted¹ EBITDA Margin Adjusted¹ EBITDA (R$ million) 227 199 576654 14.1% 2012 15.6% 2011 17.9% 1T13 14.7% 4T12 17.6% 1T12 15.8% Adjusted¹ Net Income (R$ million) Adjusted¹ Net IncomeAdjusted¹ Net Margin
- 20. 20 “Repasse” and CashBurn -30 1Q134Q121Q12 -75 -43 3Q12 -5 -50 2Q12 Cash Burn (R$ Million) +33% 110.3 -19% 72.8 136.2 1Q12 63.4 4Q12 39.8 82.9 43.1 1Q13 52.9 57.4 Financing Transfer (“Repasses”) (R$ million) "Associativo" SFH Cash Burn – Adjusted by Accounts Receivable (R$ milhões) Net Cash Burn from the increase on Accounts Receivable of Finished Units 40.2 70.5 Cash Burn Variation on Accounts Receivable of Finished Units -30.3 Seasonal reduction in the number of financing installments passed on to the banks impacted cash flow in 1Q13; Net of accounts receivable from completed units, it represents cash flow of R$ 40 million; The increase in accounts receivable from completed units is due to the PSV of R$154 million delivered in the quarter. BRL (Million) 1Q13 4Q12 D % Accounts Receivable (BRL'000) -Development 1,450 1,375 5% Concluded Units 577 506 14% Under Construction 874 869 1%
- 21. 21 Capital Structure Receivables Assignment 2.1%CRI 11.7% Working Capital 3.2% FINAME and Leasing2.5% SFH 80.5% Net Debt Adjusted by Receivables from Delivered Units (R$ million – 1Q13) 203 Net Debt Adjusted By Receivables from Delivered Units Receivables from Delivered Units 577 Net Debt 374 Cash and Equivalents 434 Total Debt 807 1Q13 4Q12 D % (BRL million) (a) (b) (a/b) Debt 807.3 793.2 1.8% SFH 649.7 622.6 4.4% CRI 94.8 99.8 -5.0% Securitization - 3.6 -100.0% Receivables Assigned 16.7 28.9 -42.2% Working Capital 20.2 18.2 10.6% FINAME and others 25.9 20.1 29.1% Cash 433.7 449.9 -3.6% Net debt 373.6 343.3 8.8% Net debt / Equity 24.6% 22.7% 2 p.p. Debt Breakdown (% Total Debt)
- 22. 22 Deferred Results Schedule ofDeferred Results (%) 6% 41% 53% 201520142013 Deferred Results (R$ million) 4Q12 699 226 49034.1% 2.6% 1Q13 716 256 443 1Q12 534 324 210 Development MCMV Level 1 1Q13 4Q12 D % (R$ million) (a) (b) (a/b) Consolidated Deferred results (1+2) 716.5 698.5 2.6% Deferred results - Margin 27.3% 27.9% -0.5 p.p. Deferred results - Development (1) 226.3 255.7 -11.5% Margin 38.7% 38.8% -0.1 p.p. Deferred results - MCMV Level 1 projects (2) 490.2 442.8 10.7% Margin 24.1% 24.0% 0.1 p.p.
- 23. 23 Improvement on DIRR3Float Number of Investors (#) +69% 1,573 +195% Mar.13 675 898 Dec.12 933 480 453 Sep.12 652 283 369 Jun.12 531 214 317 Mar.12 533 217 316 Investment Funds Personal Investors +51% 11,789 +827% 1Q134Q12 7,795 3Q12 2,539 2Q12 1,039 1Q12 1,272 Average Trading Volume (# of Transactions) Average Trading Volume (R$ 000) 616 245 108115 +121% 1,359 +1,083% 1Q134Q123Q122Q121Q12
- 24. BISA3; -16,1% CYRE3; 14,3% EVEN3;14,4% EZTC3; 24,5%GFSA3; -5,8% HBOR3; 26,1% MRVE3; 12,9% DIRR3 17,2% RDNI3; 10,3% RSID3; -12,7% TCSA3; -8,4% SETOR; -4,0% TRIS3; 6,7% 25% 30% 35% 40% 45% 50% 55% 60% -50% -30% -10% 10% 30% 50% NetRevenueLTM/TotalAssets Net Margin¹ Slow turnover and margin above averageSlow turnover and margin below average Fast turnover and margin below average Fast turnover and margin above average Company; ROE LTM Size: Leverage (Assets/Equity) Color: Average Prince - Launched Units Last 24 months Low - up to R$ 200k per unit Medium - between R$ 200k and R$ 400k per unit High - above R$ 400k per unit Setor 1. Direcional: Adjusted for non-cash expenses (Stock-Options Program) 24 Outstanding Results 17.2% Source: Company Earning Release 1Q13 Annualized (As of 1Q13)
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- 27. 27 Construction Inflation (INCC)Track Record Brazilian construction cost index, base 100 = Jan/2005
- 28. 28 Contacts Carlos Wollenweber CFO |IR Officer Paulo Sousa IR Analyst Luiz Felipe Almeida IR Analyst www.direcional.com.b/ir ri@direcional.com.br (55 31) 3214-6200 (55 31) 3214-6450