2Q09 Presentation
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Transcript of 2Q09 Presentation
Second Quarter 2009 ResultsConference CallConference Call
Investor Relations ContactJulia Freitas [email protected]
1
Financial and Operational Performance – Wilson Amaral, CEO
Overview of 2Q09 Results
p ,
2
Highlights of the Quarter
2Q09 launches decreased 56% from 2Q08 based on conservative launch strategyLaunches declined to R$626 million in 2Q09 from R$1,409million in 2Q08
Pre‐sales increased 9% from 2Q08; sales velocity reached 24%Pre‐sales rose to R$835 million in 2Q09 from R$764 million in 2Q08
fNet operating revenues rose 54% from 2Q08Net operating revenues increased to R$706 million in 2Q09 from R$459 million in 2Q08
2Q09 adjusted EBITDA reached R$142 million (20.1% EBITDA margin), a 69% increase over 2Q082Q09 adjusted EBITDA reached R$142 million (20.1% EBITDA margin), a 69% increase over 2Q08
Net income before minority interest and stock options increased to R$81 million in 2Q09, a 26%increase from R$64 million in 2Q08. Net income was R$58 million in 2Q09
R$600 million debenture was received in early May and disbursed to Tenda. Funds are available forany project meeting Caixa specifications
In this quarter, Tenda completed 29 projects totaling 2,151 units, Gafisa completed one project andAlphaville completed a project in Campinas‐SP with 390 lots
3
Recent Developments
Strong Sales Performance of Mid/Mid‐high Segments: Gafisa and Alphaville experienced strong
sales, representing 56% of the consolidated figure.
Affordable Entry‐Level Segment: 2Q09 sales were R$367 million on 4,366 units sold at an average
price of approximately R$84,000. Tenda’s customers benefit from the government’s housing
program, Minha Casa, Minha Vida.
Diversified Geographies and Products: the company continues to strengthen its well‐known brands.
2006 Debenture Covenant Successfully Renegotiatedwith 97.65% of approval.
Gafisa Completed Second Securitizationwith immediate net cash proceeds of R$70 million.
Cancellation of Public Offering of Shares: Gafisa cancelled the offering on July 13, 2009. The funds
were not required to achieve our 2009 objectives.
Sarbanes‐Oxley: we have been certified as “SOX” compliant.
4
Gafisa: Business ModelGafisa is a residential homebuilder with product lines divided by income segment and nationalGafisa is a residential homebuilder with product lines divided by income segment and national footprint
ics
Vertical
Metropolitan areas
Custom projects
Horizontal / Vertical
Metropolitan areas and surroundings
Standardized products
Horizontal lot development
Suburban areas
Custom projects
Characteristi
Unit price: > R$200 thousand
Financing: Banks
Unit price: R$50 – R$200 thousand
Financing: Caixa and Banks
Caixa representative
Unit price: R$70 – R$500 thousand
Financing: Direct
32 t il l ti 8 i l ffi
Price
s
In‐house sales force and brokers32 retail locations, 8 regional offices, in‐house sales force and brokers
In‐house sales force and brokers
46 cities / 18 states 64 cities / 12 states 26 cities / 16 states
Sales
verage
Cov
High / Middle High Affordable / Entry Level Residential Communitiesincome
5
One of the Most Geographically Diverse Homebuilders
Gafisa brands and geographic presence Contracted sales 1H09
SP43.9%
Other37.1%
RJ19.0%
R$1,394 million
Land bank 2Q09
SP38.6%Other
38.8%
Brands States Cities
RJ22.5%
R$15,994 million18 46
12 64
16 26
Total 20 996
Conservative Approach Towards Launches
2Q09 L h b i i2Q09 L h (R$ illi )
2,730
2Q09 Launches by unit price2Q09 Launches (R$ million)R$ million
(%Gafisa) 2Q09 2Q08
Gafisa ≤ R$500 k 225 454
160
1.483
‐56%1,409
‐71%> R$500 k 127 142Total 352 596
Alphaville > R$100 k; ≤ R$500 k 82 102
596352
0
1.086490
10282
160
104
711
192192
626 787Total 82 102
Tenda 1) ≤ R$130 k 64 572> R$130 k 128 139
T l 192 7110
2Q08 2Q09 1H08 1H09
2Q09 Launches by region
TendaAlphavilleGafisa
Total 192 711
Consolidated Total 626 1,4091) Includes Tenda and Fit Residencial in 2008
2Q09 Launches by region
Other33%
São Paulo55%
33%
7Rio de Janeiro12%
Strong Pre‐Sales: Significant Inventory Reduction
2Q09 P l b it i2Q09 P l (R$ illi )
1,432 1,394‐3%
2Q09 Pre‐sales by unit price2Q09 Pre‐sales (R$ million)R$ million
(%Gafisa) 2T09 2T08
Gafisa ≤ R$500 k 225 454
132 114
367
566620+9%
764835
> R$500 k 127 142Total 352 596
Alphaville > R$100 k; ≤ R$500 k 82 102
372 390
734 660 75 79
317 367 Total 82 102
Tenda 1) ≤ R$130 k 64 572> R$130 k 128 139
T l 192 7112Q08 2Q09 1H08 1H09
2Q09 Pre‐sales by region
TendaAlphavilleGafisa
Total 192 711
Consolidado Total 626 1,4091) Includes Tenda and Fit Residencial in 2008
2Q09 Pre‐sales by region
São PauloOther34%
45%
8Rio de Janeiro21%
Sales Velocity and Inventory
2Q09 Sales velocity (R$ million)
Inventoriesend of period
Sales Sales speed
Inventory reduction (R$ million)
end of period
Gafisa 1,542 390 20%
Alphaville 203 79 28%‐ 465
‐ 250
3,3942,929
2 679Tenda 934 367 28%
Total 2,679 835 24%
2,679
215 199 203
1,402 1,149 934
Inventories
2Q09 Sales per launch year (R$ million)
1,777 1,581 1,542
4Q08 1Q09 2Q09
TendaAlphavilleGafisa
Inventoriesend of period
Sales Sales speed
2009 Launches 292 216.6 43%
2008 Launches 1,183 274.1 19%
4Q08 1Q09 2Q09
,
2007 Launches 860 249.2 23%
≤ 2006 Launches 344 95.5 22%
Total 2 679 835 4 24%
9
Total 2,679 835.4 24%
74% of inventory consists of launched developments not yet started or up to 30% completedor up to 30% completedCompleted units represent only 7% of the total PSV available for sales
R$ 000
Company Not startedUp to 30% constructed
30% to 70% constructed
More than 70% constructed
Completed units
Total
Gafisa 463,651 735,696 338,077 47,520 160,214 1,745,157
Tenda 345,625 428,962 43,977 82,892 32,552 934,007, , , , , ,
Total 809,275 1,164,658 382,054 130,411 192,766 2,679,165
10
Diversified, High‐Quality Land Bank Provides Strong Platform for GrowthGrowth303 different sites, in 21 states
Potential units (%Gafisa)
Potential units (100%)
PSV R$ million (%Gafisa)
% Swap Total
Gafisa 20,060 23,869 7,317 42%
Alphaville 22,008 35,501 3,133 97%
Tenda 61,721 63,028 5,544 15%
Total 103,789 122,397 15,994 73%
73% acquired by swap agreements.
Affordable entry level represents 59% of potential Gafisa units in land bank.
11
Financial Performance Duilio Calciolari CFO and IR Officer
Overview of 2Q09 Results
Financial Performance – Duilio Calciolari, CFO and IR Officer
12
2Q09 Financial HighlightsNet Revenues (R$ million) Gross Profit (R$ million)Net Revenues (R$ million) Gross Profit (R$ million)
136
191
29.6%27.1%
+41%459
706 +54%
459
dj d1 ( $ illi ) 2 ( $ illi )
2Q08 2Q09
Gross Profit Gross Margin
2Q08 2Q09
Net Revenues
142
Adjusted1 EBITDA (R$ million)
+69%
Net Income2 (R$ million)
20.1%18.4%
81
11.5%14.0%
+26%
84
+69%
64
2Q08 2Q09
EBITDA EBITDA Margin2Q08 2Q09
Net Income2 Net Margin
2: Before minority shareholders and stock option expenses1: Adjusted for non‐cash stock option expenses.
132: Before minority shareholders and stock option expenses
EBITDA adjusted to include non‐cash stock option expenses increased 69% over 2Q08
2Q09 Adjusted EBITDA (R$ thousand) 1H09 Adjusted EBITDA (R$ thousand)
Gafisa Tenda Total
Net profit 43,724 14,044 57,768
(+) Financial result 13,783 (1,063) 12,720
Gafisa Total
Net profit 73,698 20,804 94,501
(+) Financial result 23,543 (1,614) 21,929
Tenda
(+) Income taxes 16,037 4,584 20,621
(+) Depreciation and Amortization 2,306 4,093 6,399
(+) Capitalized interest 16,164 5,152 21,316
( ) Mi it h h ld 10 244 9 365 19 609
(+) Income taxes 26,378 10,556 36,934
(+) Depreciation and Amortization 7,652 6,730 14,382
(+) Capitalized interest 31,840 7,351 39,191
( ) Mi it h h ld 17 576 13 789 31 364(+) Minority shareholders 10,244 9,365 19,609
EBITDA 102,258 36,175 138,434
(+) Stock option plan expenses 1,235 2,515 3,750
Adjusted EBITDA 103 493 38 690 142 184
(+) Minority shareholders 17,576 13,789 31,364
EBITDA 180,687 57,615 238,302
(+) Stock option plan expenses 7,782 4,531 12,313
Adjusted EBITDA 188 469 62 146 250 616Adjusted EBITDA 103,493 38,690 142,184
Net revenues 444,390 261,428 705,818
Adjusted EBITDA margin 23.3% 14.8% 20.1%
Adjusted EBITDA 188,469 62,146 250,616
Net revenues 776,604 471,101 1,247,705
Adjusted EBITDA margin 24.3% 13.2% 20.1%
Note: Gafisa's EBITDA includes negative goodwill amortization (net of provisions) from deal with Tenda
14
SG&A
T d ’ lid ti ll k ti d l ff t i t d SG&A ti‐ Tenda’s consolidation as well as marketing and sales efforts impacted SG&A ratios ‐ We expect ratios to improve as strong performance at Gafisa will be complemented by top
line growth in Tenda
2Q09 Gafisa Tenda Total 1Q09 Gafisa Tenda Total
Selling Expenses (R$ 000) 23,679 27,502 51,182
G&A Expenses (R$ 000) 38,978 20,334 59,312
SG&A Expenses (R $000) 62 657 47 836 110 493
Selling Expenses (R$ 000) 23,066 23,540 46,607
G&A Expenses (R$ 000) 28,853 27,065 55,918
SG&A Expenses (R $000) 51 919 50 606 102 525SG&A Expenses (R $000) 62,657 47,836 110,493
Selling Expenses / Sales 5.1% 7.5% 6.1%
G&A Expenses / Sales 8.3% 5.5% 7.1%
SG&A Expenses (R $000) 51,919 50,606 102,525
Selling Expenses / Sales 7.5% 9.3% 8.3%
G&A Expenses / Sales 9.4% 10.7% 10.0%
SG&A / Sales 13.4% 13.0% 13.2%
Selling Expenses / Revenues 5.3% 10.5% 7.3%
SG&A / Sales 17.0% 20.0% 18.3%
Selling Expenses / Revenues 6.9% 11.2% 8.6%
/G&A Expenses / Revenues 8.8% 7.8% 8.4%
SG&A / Revenues 14.1% 18.3% 15.7%
G&A Expenses / Revenues 8.7% 12.9% 10.3%
SG&A / Revenues 15.6% 24.1% 18.9%
15
Strong Pre‐Sales Positively Impact Backlog of Revenues to be RecognizedRecognizedR$1.1 billion of results to be recognized (68.6% growth compared to 2Q08)
R$ illi )R$ million) 2Q09 2Q08 1Q09 2Q09 x 2Q08 2Q09 x 1Q09
Gafisa Revenues to be recognized 1,905 1,700 1,844 12.1% 3.3%
Costs to be recognized (1,199) (1,085) (1,197) 10.6% 0.2%
Results to be recognized (REF) 706 616 647 14.7% 9.0%Results to be recognized (REF) 706 616 647 14.7% 9.0%
REF margin 37.0% 36.2% 35.1% 111 bps 195 bps
Tenda 1) Revenues to be recognized 1,187 157 1,057 656.0% 12.3%
Costs to be recognized (768) (105) (701) 628 5% 9 6%Costs to be recognized (768) (105) (701) 628.5% 9.6%
Results to be recognized (REF) 419 52 356 712.4% 17.8%
REF margin 35.3% 32.8% 33.7% ‐82 bps 163 bps
Consolidated Revenues to be recognized 3,092 1,857 2,901 66.5% 6.6%
Costs to be recognized (1,968) (1,190) (1,898) 65.4% 3.7%
Results to be recognized (REF) 1,125 667 1,003 68.6% 12.1%
REF margin 36.4% 35.9% 34.6% 135 bps 180 bps
Note: Revenues to be recognized are net from PIS/Cofins (3.65%). Backlog of Revenues not adjusted to present value.
16
1) Includes Fit Residencial in 2008
Strong Financial Position: consolidated cash position of R$1.1 billion
80% of Gafisa’s construction has financing lines in place
Cash‐burn rate substantially lower than R$360 million in 4Q08
(R$ million) 2Q09 1Q09
Total Debt 2,242 1,563
y $
Total Cash 1,056 501
Obligation to Investors 300 300
Net Debt & Obligation to Investors 1,486 1,362
(Net Debt & Obligation to Investors) / (Equity + Minorities) 65.6% 61.9%
Cash‐burn rate 111 115
R$ million TotalUntil
June/2010Until
June/2011Until
June/2012Until
June/2013After
June/2013
Total Debt – Gafisa and Alphaville 1,486 408 566 319 164 29
Total Debt ‐ Tenda 1) 757 93 42 169 152 300
Total Consolidated Debt 2,243 501 608 488 317 329
17
Gafisa is the most liquid Brazilian real estate company and the only one listed on NYSEone listed on NYSE
25210
Daily Volume (R$ MM) Price (GFSA3)
15
20
120
150
180
5
10
30
60
90
00
Gafisa’s average daily trading volume: R$78.5 million (Jul 1st, 2008 – Jul 31th, 2009)
Average Daily Turnover in the last 90 days over free float: 2.4%
18
Outlook for 2009We maintain our outlook for 2009 and reaffirm the full year guidance for salesWe maintain our outlook for 2009 and reaffirm the full‐year guidance for sales and EBITDA margin
‐ Consolidated Sales: between R$2.7 billion to R$3.2 billion
‐ Gafisa: 1.0 billion ‐1.2 billion
‐ Tenda: 1.4 billion ‐ 1.6 billion
‐ Alphaville: 300 million ‐ 400 million
‐ Consolidated EBITDA Margin: between 16% to 17%
19
Safe‐Harbor Statement
We make forward‐looking statements that are subject to risks and uncertainties. These statementsare based on the beliefs and assumptions of our management, and on information currently availableto us. Forward‐looking statements include statements regarding our intent, belief or currentexpectations or that of our directors or executive officersexpectations or that of our directors or executive officers.
Forward‐looking statements also include information concerning our possible or assumed futureresults of operations, as well as statements preceded by, followed by, or that include the words''believes '' ''may '' ''will '' ''continues '' ''expects '‘ ''anticipates '' ''intends '' ''plans '' ''estimates'' or''believes,'' ''may,'' ''will,'' ''continues,'' ''expects,'‘ ''anticipates,'' ''intends,'' ''plans,'' ''estimates'' orsimilar expressions. Forward‐looking statements are not guarantees of performance. They involverisks, uncertainties and assumptions because they relate to future events and therefore depend oncircumstances that may or may not occur. Our future results and shareholder values may differmaterially from those expressed in or suggested by these forward‐looking statements. Many of thematerially from those expressed in or suggested by these forward looking statements. Many of thefactors that will determine these results and values are beyond our ability to control or predict.
20