4Q13 Disclosure and Results

13
1 Earnings Release | Conference Call 4Q13 March 18 th , 2014

Transcript of 4Q13 Disclosure and Results

1

Earnings Release | Conference Call – 4Q13

March 18th, 2014

2

Agenda

Ricardo Ribeiro

Vice President

Carlos Wollenweber

CFO | IR Officer

Operational Highlights

Financial Highlights

2013 2012 D %(a) (b) (a/b)

Launched PSV % Direcional

BRL million 2,565 2,346 9%

Contracted PSVPSV % Direcional

BRL million 2,652 2,267 17%

Sales Over Supply (VSO) % PSV 78.4% 71.7% +6.7 p.p.

Net Revenues BRL million 1,744 1,449 20%

Cash Flow Generation BRL million 76 -183 n.a

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2013 Highlights

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Launches

20% 14%

2013

82%

4%

2012

60%

20%

Launches by Region - Development

(% PSV)

16%43%

27%

2013

24%

30%

3%

2012

33%

24%

Launches by Region - MCMV Level 1

(% PSV)

AP

MG

RJ

GO

CE

Launches 4Q13

2013:

MCMV Level 1 represented 80% of the PSV launched;

82% of the launches in the development segment were

in the southeast region.

+9%

2,565

+24%

2013

2,041

523

2012

2,346

1,647

698

Launched PSV

(R$ million)

MCMV Level 1

Development

Southeast North Midwest Northeast

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Net Sales and Inventory

Midweast 18%

North 51%

Southeast 31%

800

670

2013

-9%

2012

725

571

154 130

Under Construction

Finished Units

Inventory by Region

(% PSV)

Inventory

(PSV - R$ million)

North 38%

Southeast 44%

Midweast 18%

2012 2013

2,652

+17%

2013

2,041

610

2012

2,267

1,647

620

Contracted Net Sales

(PSV - R$ million)

MCMV Level 1

Development

21.1%15.4%

21.2%15.2%15.2%

55.1%46.9%49.6%

40.7%

55.4%

3Q13 4Q13 2Q13 1Q13 4Q12

With MCMV Level 1 project

Without MCMV Level 1 project

Sales-over-supply ratio (VSO)¹

(% Total PSV)

1 - VSO ratio = Sales for the period / (Opening Inventory + Launches in the Period)

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Deliveries

Deliveries

(PSV Launched - R$ million)

Units

1,606

1,2371,127

305291

511502

61163

2013 2012 2011 2010 4Q13 3Q13 2Q13 1Q13

Delivered PSV

718 4,008 7,224

1%

MCMV Level 1

32%

RET1

Commercial

10% Low-Income

16%

Medium

25%

Upper-Middle

16%

13,556 11,334 1,887 1,351

Residencial Meu Orgulho

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Carlos Wollenweber

CFO | IR Officer

Financial Highlights

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Cash Flow Generation with Growth

1 - Cash Flow: measured by the change in net debt adjusted for dividend payments and shares buyback

2013

76

2012

-183

Cash Flow ¹ Generation- Anual

(R$ million)

Financing Pass-through (“Repasses”)

(R$ million)

633

+39%

2013

273

360

2012

455

233

222

"Associativo"

SFH

Service

74%

Development

26%

Service

84%

Development

16%

Breakdown of Results to be Recognized

(% Total)

47%

31%

2013

836

2012

457

Revenue from Service

% of Gross Revenue

Revenue from Services

(R$ million)

2013 2012

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Inventory

Sales and Cancellation (“Distratos”) - Development

(R$ million – PSV)

8%7%7%10%4%

27%20%

27%33%

26%

4Q13 2013

231

2012

157

75

3Q13

68

4Q12

49

Cancellation

% Cancellation over Sales - Development

% Cancellation over Sales - Total

Inventory

(R$ million – PSV)

725 -9%

4Q13

571

154

4Q12

800

670

130

Under Construction Finished Units

2013 Launches and Sales - Development

(R$ million – PSV)

Deliveries and Launches - Development Segment

(R$ million – PSV)

686

924

698523

+19%

+60%

2013

839

2012

828

2011

305

2010

291

Launches Deliveries

+17%

Launches

523

Net Sales

610

Cancellations

231

Gross Sales

841

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Financial Results

1. Adjusted for (non-cash) expenses with the stock option program

Adjusted¹ G&A

(R$ million)

5.8%6.6%

6.0%6.7%

+5%

+5%

2013

101

2012

96

4Q13

26

4Q12

25

% Net revenue

Adjusted¹ G&A

Selling Expenses

(R$ million)

2.4%2.8%3.3%

2.4%

4Q13 2013

41

+2%

+61% 40

2012 4Q12

9 14

Selling Expenses % Net revenue

+50%

4Q13 4Q12

3,746

586

659 3,160

1,846

2,505

Development

MCMV Level 1

Revenues to be Recognized

(R$ million)

Gross Revenue

(R$ million)

1,024

457

2012

1,482

214

238

4Q13

452

242

131

4Q12

373

+21%

+21%

2013

1,792

956

836

Development

MCMV Level 1

INCOME STATEMENT - (R$ ´000) 4Q13 3Q13 D % 2013

Gross Revenues 452 465 -3% 1,792

Services Revenues 238 206 15% 836

% Gross Revenue 53% 44% 8 p.p. 47%

Real Estate Sales Revenues 214 259 -17% 956

% Gross Revenue 47% 56% -8 p.p. 53%

Net Operating revenue 438 451 -3% 1,744

Adjusted Gross Profit¹ 110 122 -10% 454

Adjusted Gross Margin¹ 25% 27% -2 p.p. 26%

G&A² -26 -28 -5% -101

%Net Revenue -6.0% -6.2% 0.1 p.p. -5.8%

Selling expenses -14 -10 40% -41

%Net Revenue -3.3% -2.3% 1.0 p.p. -2.4%

Financial Result 1.1 -0.5 -316% 1.5

Equity pick-up 3.8 3.5 10% 11.8

Tax -6.0 -6.2 -2% -23.7

Other operating income and expenses -3.3 -4.3 -25% -11.0

Non-controlling interest in SPEs and SCPs -3.6 -2.3 54% -8.3

Net Income² 50 63 -20% 232

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Consolidated Income Statement

1. Adjustment excluding capitalized interest for construction financing

2. Adjusted for (non-cash) expenses with stock option programs

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Dividend Policy

The Board of Directors approved on March 17th, 2014, the new dividend policy of Directional

with the following guidelines :

The amount to be paid to shareholders will be 40% of Cash Flow Generation¹ of the period.

The amount to be distributed may not exceed 50% of net income for the period neither be

lower than 25%.

This policy is contingent to the attainment of the leverage ratio: net debt to equity must be

lower than 30%.

Frequency of Payment: dividends will be paid 2 times per year, occurring an anticipation

after the publication of the third quarter results for the period.

The policy will be valid from the results for the year 2014 onwards.

1 - Cash Flow: measured by the change in net debt adjusted for dividend payments and shares buyback

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Disclosure and Contacts

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.

www.direcional.com.b/ir

[email protected]

(55 31) 3214-6200

(55 31) 3214-6450

Carlos Wollenweber

CFO | IR Officer

Paulo Sousa

IR Coordinator

Luiz Felipe Almeida

IR Analist