Earnings Release Presentation - Fourth Quarter 2009 (4Q09).

Earnings Release 4Q09March 25, 2010

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Earnings Release 4Q09

Rubens Menin

Opening Comments

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Contracted sales were R$2.8 billion in 2009, up 82.7% from last year, achieving the

guidance disclosed.

EBITDA margin was 26.8% in 2009 (29.4% in 4Q 2009), achieving the guidance

disclosed.

Net income increased by 50.4% over last year, totaling R$347.4 million in 2009 (net

margin of 21.1%).

MRV shares compose the Ibovespa (Bovespa index).

Completion of 3rd issue of debentures in March 2010 in the amount of R$516 million.

Highlights


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Perspectives

1 million homes2

2 million homes?


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Contracted Sales (R$ million) Net Revenue (R$ million)

EBITDA (R$ million)

and Margin EBITDA (%)Net Income (R$ million)e Net Margin (%)

Growth with Consistency of Financial and Operating Results

CAGR = 98% CAGR = 103%

CAGR = 140% CAGR = 100%


76.9

272.6

441.3

19.3%

24.5%

26.8%

2007 2008 2009

254.4%

61.9%

399.6

1,110.7

1,647.6

2007 2008 2009

178.0%

48.3%

87,1

231,0

347,4

21,8%20,8% 21,1%

2007 2008 2009

165.2%

50.4%

717.0

1,544.2

2,821.8

2007 2008 2009

115.4%

82.7%

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Ready to Grow

Land Bank Feb/10 (%MRV):

• PSV of R$10.9 billion

• 108,342 potential units

• 358 units per construction site

Strong Capitalization:

• Total cash of R$ 714.0 million on 12/31/09• Debentures of R$516 million on 2010

Low indebtedness:

• Net Debt / Shareholders’ Equity of 3.0%


Construction

- Team

- Partnership with suppliers

- Imports

- Capital Intensive

Process

- Shared Service Center

Management Technology

- R$ 27,2 mm invested since

2008

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Real Estate Financing

Increasing amount of units under contracts with CEF

MRV is the largest partner of CEF in the housing program “Minha Casa, Minha Vida”

Units under contracts with CEF in 2009


4,339 4,719

13,091

1,426

5,765

10,484

23,575

1Q09 2Q09 3Q09 4Q09

Contracted Units CEF YTD

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Closing the cycle and substantially reducing the cash burn...

Cash Burn

Change in Net Debt

(R$ million)

Operational and Financial Performance 4Q09

210.9

242.4

211.4 200.4

100.6

123.8

0.1

89.8

1Q08 2Q08 3Q08 4Q08 1Q09 2Q09 3Q09 4Q09

-55.2%

865.1

314.4

2008 2009

-63.7%

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Processes Optimization by CEF Pilot Project: Transfer of approximately 95% of the contracting process to the homebuilder = substantial gains in the contracting process Involvement of senior management of CEF in contracting process Partnership between MRV and CEF

Financial Cycle Management

POSITIVE impact on financial cycle


0,00

2,00

4,00

6,00

8,00

10,00

12,00

14,00

16,00

0

10.000

20.000

30.000

40.000

50.000

60.000

Average Daily Trading Volume (R$ thousand) Price (monthly average)10

Subsequent Events

Average Price per Month (MRVE3) (R$)and Average Daily Trading Volume (R$ thousand)

MRVE3

Volume(R$ thousand) Priçe R$

Completion of 3rd issue of debentures

on March 2010

Total amount: R$ 516 million

Expiring Term: 4 years

Amortization: 50% on February, 2013

50% on February, 2014

Remuneration: CDI + 1,6% a.a.

Bookbuilding Summary


Asset Management66%

Bank Treasury33%

Private Bank and Retail

1%

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Land Bank

Launches

Contracted Sales

Inventories at Market Value

Productivity Index

Indebtedness and Net Debt

Unearned Results

Guidance

Operational and Financial Performance


... on February 28, 2010:

• Land bank of R$10,942.1 million

• 108,342 potential units

• Average price of R$101.0 thousand (focus on low income)

• 358 units per construction site (average)

... by financing source Feb/10

% swap / land cost % land cost/ PSV

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Land Bank %MRV (R$ billion)

Land Bank (%MRV)


9.0

10.6 10.9

Dec/08 Dec/09 Feb/10

Swap42%

Cost9%

Minha Casa, Minha Vida

92%SFH - SBPE

8%

... by price range in 2009

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... by financing source in 2009

... in 2009

• Launches of 139 new projects

• PSV of R$2,586.1 million – 25,522 units

• 87% of the launched units are elegible to MCMV

Launches (%MRV)

SFH - FGTS

87%

SFH - SBPE

13%


2,533.0 2,586.1

536.2

1,052.7

2008 2009 4Q08 4Q09

2.1%

96.3%

Below R$80,0008%

From R$80,001 to R$130,000

72%Over R$130,000

20%

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... by price range in 2009

... by financing source in 2009

Contracted Sales (%MRV)

... in 2009

• Total of R$2,821.8 million with sales

• 27,951 sold units

• Average Sales Speed of 17%

SFH - FGTS

79%SFH - SBPE

21%


1,544.2

2,821.8

298.4

750.9

2008 2009 4Q08 4Q09

82.7%

151.7%

Below R$80,000

18%

From R$80,001 to R$130,000

62%Over

R$130,00020%

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Inventory distribution of units for saleper construction phase as of Dec/31/09

Inventory at Market Value on 12/31/09 = R$ 1.6 billion

Inventory distribution of units for saleper financing source as of Dec/31/09

Inventory at Market Value (%MRV)

SFH - FGTS

84%SFH - SBPE

16%


Under

construction47%

Finished

3%

Construction

not initiated50%

Commercial Expenses

(R$ million)

Commercial Expenses / Contracted Sales %MRV (%)

and Commercial Expenses / Net Revenue (%)

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Productivity Index


93.2

105.2

24.4 31.8

2008 2009 4Q08 4Q09

12.8%

30.5%

8.4%

6.4% 7.6%5.9%

6.0%

3.7%

8.2%

4.2%

2008 2009 4Q08 4Q09

% Net Revenue

% Sales

G&A Expenses

(R$ million)

G&A Expenses / Contracted Sales %MRV (%)

and G&A Expenses / Net Revenue (%)

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Productivity Index


86.3

100.1

22.6 29.8

2008 2009 4Q08 4Q09

16.0%

31.8%

7.8%

6.1%7.1% 5.6%

5.6%

3.5%

7.6%

4.0%

2008 2009 4Q08 4Q09

% Net Revenue

% Sales

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Debt Maturity Schedule

Loans and Financing and Net Debt

Loans and Financing Breakdown Net Debt


(R$ million) dec-09 sep-09 Chg. %

Debentures (1st Issuance) 305.0 310.9 1.9% ↓

Debentures (2nd Issuance) 101.2 101.2 0.0% ↑

Construction Financing 335.1 289.6 15.7% ↑

Others 49.4 53.2 7.2% ↓

Total debt 790.7 754.9 4.7% ↑

Expenses from debenture's issuance (4.2) (4.8) 11.4% ↓

Total Debt (Net of Fees) 786.5 750.1 4.8% ↑


Total debt 786.5 750.1 4.8% ↑

(-) Cash and cash equivalents (714.0) (767.5) 7.0% ↓

Net Debt (Net Cash) 72.5 (17.3) 518.2% ↓

Shareholder's Equity 2,392.9 2,352.6 1.7% ↑

Net Debt / Shareholder's Equity 3.0% -0.7% 5.3 p.p. ↓

62.0

140.799.4 99.8

241.6129.8

12.5 0.7

303.6270.5

111.9 100.5

12 months 13 to 24 months 25 to 36 months Over 37 months

Loans & Financing

Debentures

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Unearned Results



Unearned Sales Revenues 2,278.0 2,052.2 11.0% ↑

(-) Unearned Costs of Units Sold (1,230.8) (1,134.2) 8.5% ↑

Unearned Results 1,047.2 918.0 14.1% ↑

Unearned Results Margin 46.0% 44.7% 1.2 p.p. ↑

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Guidance 2009 / 2010


2009 Guidance Realized

Contracted sales (%MRV) - R$ million 2,800 ~ 3,000 2,821.8

EBITDA Margin 24% ~ 28% 26.8%

2010 Guidance

Contracted sales (%MRV) - R$ million 3,700 ~ 4,300

EBITDA Margin* 25% ~ 28%

* according to the accounting practices of 2009

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Disclaimer


The material that follows is a presentation of general background information about MRV Engenharia e Participações S.A. and its

subsidiaries (collectively, “MRV” or the “Company”) as of the date of the presentation. It is information in summary form and does

not purport to be complete. No representation or warranty, express or implied, is made concerning, and no reliance should be

placed on, the accuracy, fairness, or completeness of this information.

This presentation may contain certain forward-looking statements and information relating to MRV that reflect the current views

and/or expectations of the Company and its management with respect to its performance, business and future events. Forward

looking statements include, without limitation, any statement that may predict, forecast, indicate or imply future results,

performance or achievements, and may contain words like “believe,” “anticipate,” “expect,” “envisages,” “will likely result,” or any

other words or phrases of similar meaning. Such statements are subject to a number of risks, uncertainties and assumptions. We

caution you that a number of important factors could cause actual results to differ materially from the plans, objectives,

expectations, estimates and intentions expressed in this presentation. In no event, neither the Company nor any of its affiliates,

directors, officers, agents or employees shall be liable before any third party (including investors) for any investment or business

decision made or action taken in reliance on the information and statements contained in this presentation or for any

consequential, special or similar damages.

This presentation does not constitute an offer, or invitation, or solicitation of an offer to purchase any securities. Neither this

presentation nor anything contained herein shall form the basis of any contract or commitment whatsoever.

The market and competitive position data, including market forecasts, used throughout this presentation was obtained from internal

surveys, market research, publicly available information and industry publications. Although we have no reason to believe that any

of this information or these reports are inaccurate in any material respect, we have not independently verified the competitive

position, market share, market size, market growth or other data provided by third parties or by industry or other publications. MRV

does not make any representation as to the accuracy of such information.

This presentation and its contents are proprietary information and may not be reproduced or otherwise disseminated in whole or in

part without MRV’s prior written consent.

Leonardo CorrêaChief Financial and Investor Relations Officer

Mônica SimãoFinancial Director

Ph.: (31) 3348-7150

E-mail: [email protected]

www.mrv.com.br/ri

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Contacts


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Earnings Release Presentation - Fourth Quarter 2009 (4Q09).

Investor Relations

Transcript of Earnings Release Presentation - Fourth Quarter 2009 (4Q09).