Apres Resultados 4 T07 Eng Final
Transcript of Apres Resultados 4 T07 Eng Final
2007 Conference Call Presentation Results
PresentersMarcos Lopes – CEOFrancisco Lopes – EVPRoberto Amatuzzi – CFO and IRO
Forward-looking statements
This presentation does not constitute or form part of any offer, or invitation or solicitation of any offer to purchase, sell or subscribe for shares or other securities of the Company, nor shall this presentation or any information contained herein form the basis of, or act as inducement to enter into, any contract or commitment whatsoever.
This presentation contains financial and other information related to the business operations of Lopes –LPS Brasil Consultoria de Imóveis S.A and its subsidiaries (“Lopes” or the “Company”) as of and for the three-month period ended December 31, 2007. It should not be considered as a recommendation for prospective investors to sell, purchase or subscribe for securities of the Company. The information presented herein is in summary form and does not purport to be complete. No reliance should be placed on the accuracy completeness of the information contained herein, and no representation or warranty, express or implied, is given on behalf of the Company or its subsidiaries as to the accuracy completeness of the information presented herein.
This presentation contains forward-looking statements. Investors are advised that whilst the Company believes they are based on reasonable assumptions by Management, forward-looking statements rely on current expectations and projections about future events and financial trends, and are not a guarantee of future results. Forward-looking statements are subject to risks and uncertainties that affect or may affect business conditions and results of operations, which therefore could materially differ from those anticipated in forward-looking statements due to several factors, including competitive pressures, Brazilian macroeconomic conditions, performance of the industry, changes in market conditions, and other factors expressed or implied in these forward-looking statements or disclosed by the Company elsewhere, factors currently deemed immaterial.
The forward-looking statements contained herein speak only as of the date they are made and neither Management, nor the Company or its subsidiaries undertake any obligation to release publicly any revision to these forward-looking statements after the date of this presentation or to reflect the occurrence of unanticipated events.
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Summary
I. Highlights
II. Operating Results
III.Lopes Itaú Joint Venture
IV.Financial Results
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Highlights
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Highlights
A total of six acquisitions and three greenfield projects implemented in 2007 marked the Company’s geographic expansion to nine other Brazilian states, as well as to Brasilia, the Federal District, and to the metropolitan region of Campinas, in the state of São Paulo. In addition, the acquisition of Patrimóvel, (a large brokerage company based in Rio de Janeiro), gave the Company absolute leadership in that market.
In an unprecedented transaction in the real estate market, in 2007 Lopes and Banco Itaú agreed to a joint venture that will permit both companies to operate jointly in the Brazilian real estate financing market.
4Q07 contracted sales totaled R$2.2 billion, an increase by 147% from 4Q06, where revenues from contracted sales in the São Paulo market accounted for R$1.7 billion, in the Rio de Janeiro market accounted for R$330.5 million and in other state markets accounted for R$ 268.6 million.
Contracted sales for 2007 amounted to R$5.2 billion, an increase by 83% from 2006, with the São Paulo operations having accounted for R$4.3 billion, Rio de Janeiro operations for R$625.7 million and other state markets for R$359.8 million.
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4Q07 net revenues reached R$57.0 million, representing increase by 114% from 4Q06. Net revenues for 2007 totaled R$143.0 million, a 74% increase from 2006.
4Q07 Adjusted EBITDA reached R$27.9 million, representing growth of 111% from 4Q06, whereas Adjusted EBITDA for 2007 amounted to R$70.5 million, a 78% growth form 2006.
Adjusted net income* for 4Q07 increased by 95% as compared to 4Q06, having reached R$20.0 million. The adjusted net income for 2007, which amounted to R$52.9 million, increased by 67% from 2006.
At the 2008 annual shareholders’ meting, Management will submit a proposal to distribute to shareholders dividends totaling R$35 million, which corresponds to 70% of net income available for distribution after the mandatory R$2.0 million allocation of net income to the legal reserve (5% of net income for the year, limited to a total of 20% of the capital stock).
Highlights
* Excludes the effects of premium amortization. 6
Operating Results
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Contracted Sales*
Secondary marketLaunches
Total actual GVS
* Unaudited managerial information.
Total launched GVS
569
1,253
1,556
2003 2004 2005
CAGR: 35 %
CAGR: 35 %
1,853
850
591
1,166
20022000 2001 2006
2,545
2007
4,873
83%83%
2006 2007
2,856
5,221
311
4,873
2,545
311
348
91%91%
(in R$ million)
(in R$ million)
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Contracted sales by geographic region (launches)
Contracted sales for 2007(Launches)
80%
13%
7%
S ão P aulo R io Other
95%
5%
1Q07
82%
11%7%
3Q07
85%
14% 1%0%
2Q07
Lopes expanded activities to other geographic regions in 2007, which permitted fast diversification of the sources of contracted sales for the
period.9
Launched Units Sold by Income Segment (Primary Market)
São Paulo35%
35%
18%
12%
34%
44%
15%7%
Rio
Other46%
27%
19%
8%
Lopes concentrated 35% of its sales in standard residential units targeted to lower-income customers, which evidences its sound positioning to capture expected growth in this market segment
Total launched units: 15,853
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Sales Force in 2007
100
1.308 1.4081.038
1.446
2.409
4.993
0
Other markets Rio São Paulo Brazil
(Number of brokers)
In 2007, Lopes amassed the largest sales force in Brazil, which currently comprises approximately 5,000 independent brokers and sales agents,
representing a 381% growth of the sales network 11
2006 2007
Geographic Expansion
The Lopes Group 1Q07 2Q07 3Q07 4Q07 1Q08 2Q08
LPS Brasil 3/3 3/3 3/3 3/3 3/3 3/3
LCI-RJ 3/3 3/3 3/3 3/3 3/3 3/3
Lopes Dirani - 1/3 3/3 3/3 3/3 3/3
Lopes Salvador - - 3/3 3/3 3/3 3/3
Lopes Actual - - 1/3 3/3 3/3 3/3Lopes Sérgio Miranda
- - - 1/3 3/3 3/3
Lopes Minas Gerais - - - - 2/3 3/3
Lopes Bauer - - - - 1/3 3/3
Lopes Pará - - - - 1/3 3/3
Lopes Royal - - - - 2/3 3/3
Patrimóvel - - - 1/3 3/3 3/3
Lopes Immobilis - - - - 1/3 3/3
Note: For purposes of the information in this slide, the fraction numerators represent the number of months for which a a unit has been operating, whereas the denominators represent the number of months making up the relevant period.
From the twelve companies currently comprising the Lopes group, just two companies were operating throughout 2007, whereas five of them were
operating throughout the fourth quarter of 2007.
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Two seasonality components:
• Natural variation in sales related to holidays or vacation periods over the year. The first quarter is more significantly affected by summer vacations and the week of Carnival celebrations.
• Variations in sales stemming from the sales pipeline in the real estate development market, in which projects launched are subject to licensing and permit requirements, which account for significant distortions in a quarter-over-quarter comparison.
Contracted Sales Seasonality
Unstable sales behavior in each quarter accounts for variations in yearly sales
17% 18%14%
21%
31%
22%25%
22% 23%
37%
29%
41%
2005 2006 2007
1Q 2Q 3Q 4Q
Lopes - Itaú Joint Venture
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Organization of a non-financial joint company to operate as a marketing resource center of financial products and services, including mortgage and
related products and services, targeted principally to the secondary real estate market, and to Lopes customers, on an exclusive basis.
Market leadership
Excellence in
management
High valuable brands
Unique customer database in the Brazilian real estate market
Integrated business model, which is consistent with the sales process and includes incentive-based compensation packages
Use of the Company’s communication channels to disseminate information
Excellence in provision of financial services
Competitive financing conditions
Quality and speedy processing Experience in credit analysis A history of success in bank
financing and joint operations
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Lopes Itaú Joint Venture
Growth in mortgage origination volume.
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The payment received from Banco Itaú will be recorded and deferred over a 20-year period (term of the contractually agreed exclusivity), beginning with the start of operations by the joint marketing company, expected to
take place in the second half of 2008.
Recognition of Revenue from Banco Itaú Payment
Description
Amount (in R$
thousands)Yearly deferral (in R$ thousands)
Number of years
(+) Revenue 290,000 14,500 20
(-) PIS tax (1,885) (94) 20
(-) COFINS tax (8,700) (435) 20
(-) Corporate income tax (23,200) (1,160) 20
(-) CSLL tax (8,352) (418) 20
(-) Related expenses (20,500) (1,025) 20
Net Revenue 227,363 11,368 20
Both Lopes and Banco Itaú agreed to an initial R$14 million investment to implement and put the joint marketing company into operation.
Financial Results
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Net Revenues
114%
26.7
57.0
4Q06
4Q07
4Q07 net revenues
(in R$ million)
74%
2006 2007
82.0
143.0
(in R$ million)
2007 net revenues
*Information for 2006 is pro forma information 18
Adjusted EBITDA*
78%
39.5
70.5
111%
13.2
27.9
4Q06 4Q07 2006 2007
4Q07 Adjusted EBITDA 2007 Adjusted EBITDA
(in R$ million)
*As used by Lopes, Adjusted EBITDA information means net income before financial revenues and expenses, income and social contribution taxes, depreciation and amortization, as well as certain non-operating revenues. The Adjusted EBITDA is not a measure of financial performance under the Brazilian GAAP, and should not be considered in isolation, or as an alternative to net income, or as an indication of operating performance, to operating cash flows or as an indicator of liquidity. EBITDA does not have a standard meaning and as defined and adopted by Lopes EBITDA or Adjusted EBITDA may not compare to EBITDA or Adjusted EBITDA as used by other companies.
**Information for 2006 is pro forma information.
EBITDA MarginEBITDA Margin
49.6%49.6%49.0%49.0% 48.2%48.2%
49.3%49.3%
(in R$ million)
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Adjusted Net Income*
67%
31.7
52.9
2006
2007
2007 Adjusted Net Income
(in R$ million)
4Q06 4Q07
10.3
20.0
(in R$ million)
38.5%38.5%
35.1%35.1%
Net marginNet margin
38.6%38.6%37.0%37.0%
4Q07 Adjusted Net Income
95%
*As used by Lopes, adjusted net income is a non-accounting information that means net income after the amortization of goodwill. The amortization of goodwill in the 4T07 thousand (R$12) thousand, while the full year was R$833 thousand.** Information for 2006 is pro forma information.
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Proposed dividend distribution – 2007 net income
(in R$ thousands)
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Payments for acquisitions and amortization of premium
Payment schedule*(in R$ thousands)
9M07 4Q07 1Q08**
2Q08 3Q08 4Q08 1Q09 4Q092010**
*2011**
*Total
Total Lopes
7,88551,71
69,699 7,915 3,240 65,567 4,500 73,765 119,580 3,600 347,467
* Nominal amounts.** A 1Q08 increase in capital stock took place as a result of the contribution of R$35 million related to the payment for Patrimóvel.*** Earn out payments for the acquisition will take place in 2010 and 2011. The information set forth above is based on the base earn out scenario and is thus subject to change.
Schedule for amortization of premium *(in R$ thousands)
2007 2008E 2009E 2010E 2011E 2012E 2013E 2014E 2015E 2016E 2017E TotalTotal Lopes
833
20,731
25,111
26,063
28,172
29,425
30,720 31,630
32,993
34,311
3,228
263,216
* Curve projection
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Guidance 2008
Market Contracted GVS
(in R$ millions)
São Paulo 5,000 – 5,500
Rio de Janeiro 2,250 – 2,500
Other 2,250 – 2,500
Total 9,500 – 10,500
Warning: As projected for 2008 and indicated herein, contracted general value of sales (GVS) may change due to a number of variables. This material information includes forward-looking statements based on estimates and projections related to future events and financial trends, including the business prospects, results of operations and Lopes’ prospects for growth. These forward-looking statements may be materially affected due to changes in market conditions, government policies and rules, competitive pressures, performance of the industry and Brazilian macroeconomic conditions, among other factors, in addition to other risk factors discussed in documents previously released by Lopes, and are therefore subject to unanticipated changes.
Thank you!