4Q12 Disclosure and Results
26
1 Earnings Release | Conference Call – 4Q12 and 2012 March 26 th , 2013
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Transcript of 4Q12 Disclosure and Results
1
Earnings Release | Conference Call – 4Q12 and 2012
March 26th, 2013
2
Agenda
Ricardo Ribeiro
Vice President
Carlos Wollenweber
CFO | IR Officer
2012 Main Figures and
Operating Highlights
Financial Highlights
3
Main Figures
2012 2011 D %
Launched PSV% Direcional
R$ million 2,346 1,447 62%
Contracted PSV% Direcional
R$ million 2,267 1,230 84%
Sales Over Supply (VSO) % PSV 71.7% 58.8% 12.9 p.p.
Net Revenues R$ million 1,368 1,072 28%
Net Income R$ million 225 175 28%
Net Margin % 16.5% 16.3% 0.2 p.p.
ROE % 17.6% 15.6% 2.0 p.p.
4
Contracted MCMV Level 1
(R$ million)
58,892
1,647
+215.2%
+20.4%
2012
70,894
2011
522
Average Price Units
Contracted PSV
Contracted MCMV Level 1 - 2012
Contracted Projects 9
Average PSV (R$ million) 183.0
Units/Projects (average) 2,582
Contracted MCMV Level 1
Reduction of 6% to 4% in tax revenues to
developments under the special taxation
regime.
RET1: Price cap Increase from R$ 85k to R$
100k for units sold under the special taxation
regime.
Payroll tax reduction for builders, with
replacement of the INSS on the payroll for tax
corresponding to 2% of gross revenue.
Cash Generation in 4Q12 Federal Government Incentives
4Q12 Highlights
5
7
4Q12 3Q12
-43
2Q12
-50
1Q12
-70
Cash Burn¹
(R$ million)
Cash Generation
1. measured by the net debt variation plus dividends and share repurchases less capital
increases.
6
Operating Highlights
Launches
Sales
Deliveries
Land Bank
Inventory
Operating Highlights Ricardo Ribeiro
Vice President
7
Launches
Launched PSV
(R$ million)
Launched PSV – Track Record
(R$ million)
+178%
1,189 +119%
2,346 +62%
2012
1,647
698
2011
1,447
522
793
131
4Q12
988
201
3Q12
543
400
143
4Q11
428
209 218
CAGR +68%
2012
2,346
1,647
698
2011
1,447
522
924
2010
1,067
380
686
2009
783
149
634
2008
710
710
2007
176
176
MCMV Level 1
Development
Project Acquisition
MCMV Level 1
Development
Total
(R$'000)
% Direcional
(R$'000)
# of Units
Launched
Total Units
(All Phases)
1 Emotion Residence Caiçara December Belo Horizonte - MG 46,040 45,994 76 76 Upper-Middle
2 Up Life Residence December Guará - DF 78,147 78,068 148 148 Upper-Middle
3 Magic Garden Houses December Rio de Janeiro - RJ 110,342 77,240 150 150 Upper-Middle
4 Jardim Carandá December Sorocaba - SP 226,304 226,304 2,560 2,560 MCMV Level 1
5 Paranoá Parque December Paranoá - DF 448,731 448,731 6,240 6,240 MCMV Level 1
6 Parque Carioca December Rio de Janeiro - RJ 81,499 81,499 900 900 MCMV Level 1
7 Parque dos Resedás December São João da Boa Vista - SP 78,710 78,710 926 926 MCMV Level 1
8 Bosque Azul December Macaé - RJ 152,490 152,490 2,210 2,210 MCMV Level 1
Total 4Q12 1,222,262 1,189,036 13,210 13,210
Segment4Q12 Projects Date City - State
PSV Units Launched
Launches Breakdown
8
13% 17%14%
2012 2011 4Q12 4Q11
4% 5%
70%
40%
7%
16%
32%
4% 8%
83%
49%
2%
36%
Launches by Segment
(% PSV)
MCMV Level 1
Low-Income
Medium
Upper Middle
Commercial
Launches by Region - Development
(% PSV)
29%39%
14% 20%
2012 2011
33%
38%
4Q12
20%
4Q11
60% 40%
46%
61%
Southeast
North
Midwest
Northeast
Launches by Region - MCMV Level 1
(% PSV)
27%45%
16%
2012
38%
2011 4Q12
24%
4Q11
33% 55%
85%
15%
62%
Southeast
Northeast North
Midwest
MG
6
8
5
7
RJ
3
1
SP
4
DF 2
Contracted Sales
Contracted Sales
(R$ million)
1,129 +102%
2,267 +84%
2012
1,647
620
2011
1,230
522
+208%
619
89
4Q12
988
141
3Q12
558
400
158
4Q11
367
209 158
MCMV Level 1
Development
Project Acquisition
9
3%
5%2%
2012
73%
10% 8%
5%
2011
46%
26%
18% 6% 4%
4Q12
88%
2% 5%
4Q11
57%
22%
15% 5% 1%
MCMV Level 1
Medium
Low-Income
Upper-Middle
Commercial
Sales by Economic Segment
(% PSV)
Sales by Region
(% PSV)
42% 23%
12%
2012
36%
29%
2011
26%
66%
9%
4Q12
54%
4%
4Q11
37%
59%
4%
Southeast
North
Midwest
Northeast
+78%
2012
2,267
1,647
620
2011
1,230
522
708
2010
1,037
380
657
2009
661
149
511
2008
441
441
2007
127
127
Sales Track Record
(R$ million)
MCMV Level 1
Development
10
Sales Speed
4Q12
55.4%
15.2%
3Q12
41.3%
18.7%
2Q12
36.5%
21.2%
1Q12
16.1% 16.1%
4Q11
31.8%
18.5%
With MCMV Level 1 project
Without MCMV Level 1 project
Sales-Over-Supply Ratio (VSO)
(Total PSV - %)
4Q11 95% 85% 6%
1%
2%
1%
1Q12 88% 10% 51% 22% 5%
2Q12 94% 88% 3% 2%
3Q12 96% 95% 1%
4Q12 98%
3 M 6 M 9 M 12 M 15 M
Sales by Launching Period -4Q12
(% PSV – Development)
Sales Speed
(% Units)
63% of the PSV sold in the 4Q12 were units launched
before 4Q12;
30% of the sold PSV were to units launched before 2012.
14%
13%
<2011 16%
2011
14% 1Q12
5% 2Q12
3Q12
4Q12 37%
11
More than R$ 1.1 billion in PSV delivered
Jardim Alterosa
Total
(R$'000)
% Direcional
(R$'000)
1 Varandas Fazenda da Serra October Belo Horizonte - MG 64,215 32,108 136 Upper-Midle
2 Total Ville Porto Velho - 1st Phase October Porto Velho - RO 48,969 48,969 490 Low-Income
3 Residencial Jardim Alterosa November Belo Horizonte - MG 75,440 75,440 1,640 MCMV Level 1
4 Gran Vista - Tower: A and D December Manaus - AM 55,203 44,163 116 Upper-Midle
5 Gran D'Ouro December Belo Horizonte - MG 8,353 8,194 24 Medium
6 Brisas do Madeira - Tower: 3 and 5 December Porto Velho - RO 32,605 32,605 142 Medium
7 Total Ville Bem Viver Paraiso - 2nd Phase December Manaus - AM 52,985 52,976 448 Low-Income
Total 4Q12 337,771 294,455 2,996
Total 2012 1,213,128 1,126,597 11,334
# Units SegmentDelivered Projects - 4Q12 Date City - State
PSV
12
Land Bank
61.6% are large scale projects (over 1,000 units)
75.1% are eligible for the MCMV Program
76.2% were acquired by physical or financial Swap
Average acquisition price of 9.1% over PSV
R$ 6.7 Billion
66,381 units
Land Bank by Segment
(% PSV)
Land Bank Track Record in 2012
(R$ million in PSV) 137
347
6,734 -215
2012 Launches
698
Review of
Assumptions
Acquired
Land Bank
2011
6,948
Land Bank by Region
(% PSV)
Type of Payment
(2012 – % PSV)
ES 2%
AM 14%
MG 38%
RO 5%
SP 6%
PA 13%
DF 20% GO
2%
Swap
75.0% Cash 25.0%
Low-Income 56%
Upper-Middle
6%
Medium 35%
Commercial 3%
13
Inventory
46% of the inventory was launched after 2012
4Q12
23.5%
3Q12 7.7%
2Q12
11.8%
1Q12
2.8%
2,011
25.7%
<2011 12.3%
Finished Units
16.2%
Inventory by Launch Period
(% PSV)
Inventory by Region
(% PSV)
17.7%
Southeast 31.1%
North 51.3%
Midwest
Inventory Evolution
(R$ million)
800 10.9%
2012
670
130
2011
721
668
53
Finished Units
Under Construction
Total % Direcional
Under Construction 782,349 670,008 83.8% 2,251 78.5%
Finished Units 144,945 129,919 16.2% 615 21.5%
Total 927,294 799,928 100.0% 2,866 100.0%
InventoryPSV in Inventory (BRL'000)
% Units in Inventory %
14
Financial Highlights
Financial Highlights
Cash Burn and Financing Transfers (“Repasse”)
Capital Structure
Deferred Results
Stock Performance
Financial Highlights Carlos Wollenweber
CFO e Diretor de RI
15
Financial Results
344373296
+27.6%
+16.3%
-7.7%
2012
1,368
2011
1,072
4Q12 3Q12 4Q11
Net Revenue
(R$ million)
MCMV Level 1
98.0% Brokerage Fee
1.1%
Management Fee
0.9%
CAGR +68%
2012
1,368
914
454
2011
1,072
806
266
2010
782
668
114
2009
378
365 13
2008
263
255 8
2007
102
102
Net Revenue – Track Record
(R$ million)
Development
Services
Revenue from Services – Track Record
(R$ million)
Breakdown of Revenue from Services
(4Q12 - %)
2012
457
32.7%
2011
269
24.5%
2010
117
14.5%
Revenue from Service % of Gross Revenue
Focus on Industrialization The Growth Coming From The Very Low-Income
16
Focus on Industrialization
Launched PSV – Total
(R$ million)
CAGR +35%
2012
698
1,647
2011
924
522
2010
686
380
2009
634
149
2008
710
0
Launched PSV - MCMV Level 1
(R$ million)
0 380
2009
149
2008
CAGR +123%
2012
1,647
2011
522
2010
Development
MCMV Level 1
4Q12
70%
23%
7%
4Q11
49%
43%
7%
4Q10
30%
62%
9%
Units Under Construction by Construction Method
(% of Units)
1 Aluminum mold and concrete walls method
Industrial Construction¹
Concrete Blocks
Conventional Structure
(Concrete Pillars)
2012 2011 D %
Units Under Construction 51,009 36,000 42%
Construction Sites 45 37 22%
Average # of Units by
Construction Sites1,134 973 17%
# of Cities 13 10 30%
17 1 . Gross Margin excluding interest expenses;
83 8
30.5%
4Q11
90
+21.8%
420
+26.3%
2012
370
50
30.7%
2011
332
301
32
31.0%
4Q12
110
96 14
32.0%
Interest Capitalised in COGS Gross Profit Adjusted¹ Gross Margin
Financial Results
Adjusted¹ Gross Profit
(R$ million)
Revenue from Services
(R$ million)
269
24%
+70.1%
2012
457
33%
2011
% of Gross Revenue
18
Financial Results
1. Adjusted by non-cash expenses (Stock-Options Program).
Adjusted¹ G&A
(R$ million)
Sales Expenses
(R$ million)
97
73
2416
7.1%
4Q11
5.4%
52.5%
+33.8%
2012
7.1%
2011
6.8%
4Q12
39
28
99
-6.1%
+41.4%
2012
2.9%
2011
2.6%
4Q12
2.5%
4Q11
3.1%
Sales Expenses % Net Revenue Adjusted¹ G&A % Net Revenue
21.0%22.7%21.7%21.6%
+16.9%
17.8%
2012
287
2011
243
4Q12
75
4Q11
64
Adjusted¹ EBITDA Margin
Adjusted¹ EBITDA
(R$ million)
227199
6648
4Q12
18.5%
2011
14.1%
2012
16.6% 19.2%
4Q11
16.2%
Adjusted¹ Net Income
(R$ million)
Adjusted¹ Net Income Adjusted¹ Net Margin
Pro Forma Results - Deferred taxes Reversion RET4
19
1 - Provisional Measure No. 601/12 reduced the tax burden for projects developed under the Special Tax Regime (RET) from 6% to 4%. This measure came into force on January 1, 2013,
for cash effects, and allowed for the reversal of the deferred tax in the fourth quarter of 2012, proportionately to the tax reduction. The total amount reversed under “Tax deductions” and
“Income tax and social contribution” was R$ 22.13 million, or R$ 11.62 million and R$ 10.51 respectively.
2 - Gross Margin excluding interest expenses;
3 - Adjusted by non-cash expenses (Stock-Options Program).
2012 2012 D %
(a) Pro Forma (b) (a/b)
Net Revenues R$ million 1,368 1,356 1%
Adjusted Gross Profit² R$ million 420 408 3%
Adjusted Gross Margin² % 30.7% 30.1% 0.6 p.p.
Adjusted Net Income³ R$ million 227 204 11%
Adjusted Net Margin³ % 16.6% 15.1% 1.5 p.p.
Operational Efficiency
20
Net Debt
(R$ million – 4Q12)
SFH
Corporate
Net Debt
Adjusted By
Receivables from
Delivered Units
Concluídas
191
Receivables from
Delivered Units
511
Net Debt
320
Cash and
Equivalents
437
Total Debt
586
171
Launched PSV
(R$ million)
1,127
+270%
2012
828
299
2011
305
Receivables from Delivered Units
(R$ million)
511
+111%
2012 2011
242
Financing Transfer (“Repasses”)
(R$ million)
455 +43%
2012
233
222
2011
319
124
195
Development
MCMV Level 1
"Crédito Associativo"
SFH
Net cash of $ 191.0
million
ROE of 18% with low leverage
21
Capital Structure and Cash Burn
Debt Breakdown
2.4% CRI
13.2%
Receivables Assigned
3.8% Securitization 0.5%
SFH
77.5%
Working Capital
2.7%
FINAME and others
2Q12
-43
3Q12
7
4Q12
-50
1Q12
-70
Cash Burn ¹
(R$ million)
Cash Generation
1. measured by the net debt variation plus dividends and share repurchases less
capital increases.
4Q12 3Q12 D %
(BRL million) (a) (b) (a/b)
Debt 756.5 786.5 -3.8%
SFH 585.9 606.2 -3.4%
CRI 99.8 101.2 -1.4%
Securitization 3.6 6.1 -40.9%
Receivables Assigned 28.9 36.8 -21.4%
Working Capital 18.2 16.2 12.8%
FINAME and others 20.1 20.0 0.1%
Cash 436.9 460.0 -5.0%
Net debt 319.6 326.5 -2.1%
Net debt / Equity 22.5% 23.4% -1 p.p.
22
Deferred Results
Schedule of Deferred Results
(%)
5%
29%
66%
2015 2014 2013
Deferred Results
(R$ million)
22.5%
19.7%
4Q12
686
262
424
3Q12
573
287
287
4Q11
560
334
226
Development
MCMV Level 1
4Q12 3Q12 D %
(R$ million) (a) (b) (a/b)
Consolidated Deferred results (1+2) 686.2 573.3 19.7%
Deferred results - Margin 28.6% 33.1% -4.4 p.p.
Deferred results - Development (1) 262.4 286.7 -8.5%
Margin 39.9% 40.7% -0.8 p.p.
Deferred results - MCMV Level 1 projects (2) 423.8 286.7 47.8%
Margin 24.4% 27.8% -3.5 p.p.
23
Improvement on DIRR3 Float
Number of Investors
(#)
+55%
1,445
+171%
feb.13
661
784
dec.12
933
480
453
sep.12
652
283
369
jun.12
531
214
317
mar.12
533
217
316
Investment Funds
Personal Investors
+49%
11,584
+811%
2013* 4Q12
7,795
3Q12
2,539
2Q12
1,039
1Q12
1,272
Average Trading Volume
(# of Transactions)
Average Trading Volume
(R$ 000)
616
245108115
1,303
2013* 4Q12 3Q12
+111%
+1,034%
2Q12 1Q12 * Year-to-date 2013
24
Shares Performance
R$ 5
R$ 7
R$ 9
R$ 11
R$ 13
R$ 15
R$ 17
0.00
10.00
20.00
30.00
40.00
50.00
60.00
70.00
80.00
Nov
-09
Dec
-09
Jan-
10Ja
n-10
Feb
-10
Mar
-10
Apr
-10
Apr
-10
May
-10
Jun-
10Ju
l-10
Jul-1
0A
ug-1
0S
ep-1
0S
ep-1
0O
ct-1
0N
ov-1
0D
ec-1
0D
ec-1
0Ja
n-11
Feb
-11
Mar
-11
Mar
-11
Apr
-11
May
-11
May
-11
Jun-
11Ju
l-11
Aug
-11
Aug
-11
Sep
-11
Oct
-11
Oct
-11
Nov
-11
Dec
-11
Jan-
12Ja
n-12
Feb
-12
Mar
-12
Mar
-12
Apr
-12
May
-12
Jun-
12Ju
n-12
Jul-1
2A
ug-1
2A
ug-1
2S
ep-1
2O
ct-1
2N
ov-1
2N
ov-1
2D
ec-1
2Ja
n-13
Feb
-13
Mar
-13
So
ck PriceV
olu
me
(R$
mill
ion
)
Volume Ibovespa (Base 100 - Dec/2011) IMOB (Base 100 - Dec/2011) DIRR3
25
Disclosure
This presentation contains certain forward-looking statements concerning the business prospects,
projections of operating and financial results and growth potential of the Company, which are based on
management’s current expectations and estimates of the future performance of the Company. Although the
Company believes such forward-looking statements are based on reasonable assumptions, it can give no
assurance that its expectations will be achieved. Expectations and estimates that are based on the future
prospects of the Company are highly dependent upon market behavior, Brazil’s political and economic
situation, existing and future regulations of the industry and international markets and, therefore, are
subject to changes outside the Company’s and management’s control. The Company undertakes no
obligation to update any information contained herein or to revise any forward-looking statement as a result
of new information, future events or other information.
26
Contacts
Carlos Wollenweber CFO | IR Officer
Paulo Sousa IR Analyst
www.direcional.com.b/ir
(55 31) 3214-6200
(55 31) 3214-6450
