11
1Q10 Results
Villa Flora – Low Income Segment
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Disclaimer
Results 1Q10
This material is a presentation of general background information about Rossi Residencial S.A. (“Rossi”) as of the date of this presentation.Information contained herein has been summarized and does not purport to be complete. This presentation shall not be considered an advice ofinvestment by potential investors. This presentation is strictly confidential and may not be disclosed to any third person. There are norepresentations or warranties, express or implied, regarding the accuracy, fairness, or completeness of the information presented herein, which shallnot support any decision of investment.
This presentation contains statements and information that are forward-looking pursuant section 27A of the Securities Act of 1933, as amended, andSection 21E of the Securities and Exchange Act of 1934. Such forward-looking statements and information are only predictions and cannot assureRossi’s future performance. Investors have been cautioned that any such forward-looking statements and information are subject to many risks anduncertainties relating to the operations and business of Rossi and its subsidiaries. As a result of such risks and uncertainties, the actual results ofRossi and its subsidiaries may be materially different from any future result expressed or implied in the forward-looking statement or informationcontained herein.
Although Rossi believes that the expectations and assumptions reflected in the forward-looking statements and information are reasonable and havebeen based on data currently available to its officers and directors, Rossi cannot guarantee future results or events. Rossi does not assume thecommitment of update any of the forward-looking statement of information.
Securities may not be offered or sold in the United States unlesss they are registered or exempt from registration under the Securities Act of 1933,as amended. Any offering of securities to be made in the United States will be made by means of an offering memorandum that may be obtainedfrom the underwriters. Such offering memorandum will contain, or incorporate by reference, detailed information about Rossi and its subsidiaries,their business and financial results, as well as its financial statements.
This material is for distribution only to person who (i) have professional experience in matters relating to investments falling within Article 19 (5) ofthe Financial Services and Markets Act of 2000 (Financial Promotion) Order 2005 (as amended, the “Financial Promotion Order”), (ii) are personsfalling within Article 49 (2) (a) to (d) (“high net worth companies, unincorporated associations etc”) of the Financial Promotion Order, (iii) areoutside the United Kingdom, or (iv) are persons to whom an invitation or inducement to engage in investment activity (within the meaning of section21 of the Financial Services and Markets Act 2000) in connection with the issue or sale of any securities may otherwise lawfully be communicated orcaused to be communicated (all such persons together being referred to as “relevant persons”). This material is directed only at relevant personsand must not be acted on or relied on by persons who are not relevant persons. Any investment or investment activity to which this material relatesis available only to relevant persons and will be engaged in only with relevant persons.
This presentation does not constitute an offer, invitation or solicitation of an offer to subscribe to or purchase any securities. Neither thispresentation nor anything contained herein shall form the basis of any contract or commitment whatsoever.
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Heitor Cantergiani
CEO
Highlights
Leonardo Diniz
Sales Officer
Operating Performance
Cássio Audi
CFO and IRO
Financial Performance
Agenda
44
Operating Highlights
Total Launches of R$ 722 million (R$ 571 million – Rossi’s share), up 350% compared to 1Q09
SOS ratio of 25% 5th consecutive quarter of improvement
Contracted sales of R$ 842 million, up 146% compared to 1Q09
Contracted sales Rossi’s share of R$ 666 million, up 136% compared to 1Q09
Low Income Segment
Launched PSV (Rossi’s share) of R$ 417 million, up 358% compared to 1Q09, 73% of total launches
SOS reaches record of 37.4%
Sales over launches (Rossi’s share) in 1Q10 achieved 51% of PSV ( Rossi’s share)
Total sales of R$ 456.7 million (R$ 368.3 million Rossi’s share)
Financial Performance
Increase of 126% in Net Income (vs. 1Q09), reaching R$ 64 million
Net Margin of 13.1% in 1Q10 (growth of 3.5 p.p vs. 1Q09)
EBITDA reaches R$ 109 million, up 110% compared to 1Q09
EBITDA Margin reaches 22.1% vs. 17.5% in 1Q09 (growth of 4.6 p.p )
Adjusted ROE annualized reaches 16,2% in the 1Q10
(¹)Adjusted annualized ROE excludes follow-on and includes the quarter’s cash burn.
1Q10 Highlights
555
Launches and Sales
Villa Flora – Low Income Segment
6
27%
14%
14%9%
8%
8%
7%
6%
5%3%
São Paulo (other cities)
Rio Grande do Sul
São Paulo (RMSP*)
Distrito Federal
Espírito Santo
Goiás
Minas Gerais
Mato Grosso do Sul
Amazonas
Ceará
72%
23%
5%
Low Income
Conventional
Commercial
Nossos Resultados em Números
Launches Breakdown by Income Segment and State – Total PSV
Launches
Launches PSV (R$ million)
143
57118
151
1T09 1T10
Rossi Partners
722
161
91
417
18
102
1Q09 1Q10
Launch PSV (R$ million)Low Income Segment
Rossi Partners
+378%
109
519
+350%
RMSP - Região metropolitan Sao Paulo
7
54%
15%
13%
9%
6%2%
Low Income
More than R$ 500,000
R$ 200,000 - R$ 350,000
R$ 350,000 - R$ 500,000
Commercial Properties
Up to R$ 200,000
21%
17%
16%10%
9%
7%
5%
4%
1%4%
4%
São Paulo (RMSP)
Rio Grande do Sul
São Paulo (other cities)
Distrito Federal
Rio de Janeiro
Minas Gerais
Amazonas
Espírito Santo
Paraná
Goiás
Mato Grosso do Sul
Pernambuco
Contracted Sales
Sales Breakdown by Income Segment and State – Total PSV
283
66660
176
1Q09 1Q10
Contracted Sales (R$ million)
Rossi Partners
+146%
342
842
RMSP - Região metropolitan Sao Paulo
8
Real Estate Market: Industry and Company OverviewSuccessful Launches in the quarter
Gragoatá Bay Residênciais
Niterói - RJ
318 unidades 86% vendido)
VGV % Rossi: R$ 106 milhões
Lançamento: Nov/09
Rossi Jardins Praças Residenciais
Belo horizonte - MG
132 unidades (80% vendido)
VGV % Rossi: R$ 23 milhões
Lançamento: Dez/09
Rossi Ideal Cores de Mogi
Mogi das Cruzes - SP
Lançamento Jan/10 – 80% vendido
Speciale
Gama - DF
140 unidades (60% vendido)
VGV % Rossi: R$ 19 milhõesLançamento: Nov/09
Rossi Ipiranga One
São Paulo - SP -
180 units (100% sold )
PSV % Rossi: R$ 36 millionLaunched : Mar/10
Gragoatá Bay Residênciais
Niterói - RJ
318 unidades 86% vendido)
VGV % Rossi: R$ 106 milhões
Lançamento: Nov/09
Rossi Ideal Pitangueiras
Hortolândia -
176 units (84% sold )
PSV% Rossi: R$ 10 million
Launched : Mar/10
TotalitéSão José do Rio Preto - SP
208 unidades (68% vendido)
VGV % Rossi: R$ 22,5 milhões
Lançamento: Out/09
Rossi Ideal Vila das Acácias
- MG
240 units (90% Sold)
PSV % Rossi: R$ 16 million
Launched : Mar/10
Rossi Jardins Praças Residenciais
Belo horizonte - MG
132 unidades (80% vendido)
VGV % Rossi: R$ 23 milhões
Lançamento: Dez/09
Rossi Passeio Residencial
Porto Alegre - RS
384 units (97% sold )
PSV% Rossi: R$ 86 million
Launched : Mar/10
Rossi Ideal Cores de Mogi
Mogi das Cruzes - SP
Rossi Ideal Cores de Mogi
Mogi das Cruzes - SP
Rossi Ideal Águas Claras e Vitória Régia
Campinas - SP
400 unidades (99% vendido)
VGV % Rossi: R$ 19 milhões
Lançamento: Dez/09
Rossi Ideal Laranjeiras
Hortolândia - SP
176 units (88% sold )
PSV % Rossi: R$ 10 million
Launched: Mar/10
SP
Uberlândia
320 units (72% sold)
Launched : Jan/10PSV % Rossi: R$ 19 million
9
69120
163
266 259
214
284
354
355407
1Q09 2Q09 3Q09 4Q09 1Q10
Launch Sales Inventory Sales
Nossos Resultados em Números
Constant growth in Sales velocity
SOS and Inventory
15%
20%21%
23%25%
1Q09 2Q09 3Q09 4Q09 1Q10
SOS (%) - 5th Consecutive Quarter of Improvement Sales of inventory (R$ million)
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Land bankR$ million
Low Income Segment
Up toR$ 200.000
R$ 200.000 toR$ 350.000
R$ 350.000 toR$ 500.000
Above R$ 500.000
Commercial Lots Total
Amazonas 189 59 214 66 118 646
Bahia 94 879 479 1,452
Ceará 219 174 104 498
Distrito Federal 973 25 69 567 1,633
Espírito Santo 694 105 799
Goiás 925 925
Mato Grosso do Sul 45 45
Minas Gerais 2,253 171 2,424
Paraná
Pernambuco 92 92
Rio de Janeiro 979 359 124 906 88 26 2,483
Rio Grande do Norte 205 82 82 286
Rio Grande do Sul 1,739 988 479 3,206
São Paulo (other cities)
1,884 135 2,343 1,762 862 231 798 8,015
São Paulo (Metropolitan Region)
366 163 404 322 1,255
Total 10,659 577 4,953 3,413 2,230 1,129 798 23,760
Distribuição 45% 2% 21% 14% 9% 5% 3% 100%
Expertise Rossi e Diferenciais Competitivos
Land bank diversified by region and product
45% of Land bank focused on Low Income Segment
Land bank 1Q10 (in R$ million) - PSV by State and Income Segment
Land bank
SFH (Brazilian financial system) = 83%
11
24%
29%
47%
Cash Units swap Financial swap
Potential PSV (100%): R$ 23,8 billion
Rossi’s share: R$ 16.0 billion
148 lands and 73 cities
11 million of m2 on area under construction
135 mil unities for future launches
Expertise Rossi e Diferenciais CompetitivosExpertise Rossi e Diferenciais Competitivos
R$ 23.8 billion of PSV on Landbank
Land bank
76% acquired by swaps
Land Bank Variation - Rossi´s share
(R$ billion)
16.0 15.2
0.6 1.4
Initial landbank 1Q10 Launches New acquisitions Final landbank 1Q10
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Sales Breakdown
Market segment: Rossi Vendas São Paulo, Rio de Janeiro, Porto Alegre Campinas, Fortaleza, Brasília, Espírito Santo, Campo Grande and Goiania.
We plan to open new regional offices in Curitiba, Belo Horizonte and Manaus in June of 2010.
Sales on operations region
Rossi Vendas
Brokers by city
89
77
127
51
40
35
1716
10
São Paulo
Porto Alegre
Rio de Janeiro
Campinas
Brasília
Espírito Santo
Fortaleza
Goiânia
Campo Grande
14%
86%
Launch Sales
Inventory Sales
29,4%
70,6%
ROSSI VENDAS
Other
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Rossi Ideal
Rossi Ideal
Rossi Ideal stores received an average of 9,000 visitors per quarter, equivalent to an average of 100
visits per day.
Photos of the first “Minha casa minha vida” Fair in Uberlândia/MG:
14141414
Financial Highlights
15
Destaques Resultados
Net Income
Net income growth of 126% (vs. 1Q09), totaling R$ 64 million
Margins
EBITDA Margin reaches 22.1% vs. 17.5% in 1Q09 (4.6 p.p. growth)
Net Margin of 13.1% in 1Q10 (increase of 3.5 p.p vs. 1Q09)
Adjusted annualized ROE (¹) of 16.2% in the quarter
Selling and Administrative Expenses
More efficient at selling and administrative expenses
Decline in expenses as a percentage of net revenue, contracted sales and launches versus
1Q09
1Q10 Highlights
(¹)Adjusted annualized ROE excludes follow-on and includes the quarter’s cash burn.
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Nossos Resultados em Números
Net Revenue
Property sales and services
Monetary variation and interest
(-) Sales taxes
Total
Costs 1Q09 1Q10
Works+Sites 191 90,6% 308 90,4%
Financial Charges 20 9,4% 33 9,6%
Gross Profit 85 150
Financial Charges 20 33
Monetary variation and interest 9 41
Adjusted Gross Profit* 96 142
Adjusted Gross Margin* 33.4% 31.5%
Financial Highlights
* Excluding financial effects
296.4
491.0
1Q09 1Q10
Net Income (R$ million)
65.6%
1Q10% of Net Revenue
464 94.5%
41 8.4%
(14) -2.8%
491 100%
1Q09% of Net Revenue
298 100%
9 3,0%
(10) -3,4%
296 100%
85.1
150.1
1Q09 1Q10
Gross Income (R$ million) & Gross Margin (%)
29%
31%
76.4%
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EBITDA 1Q10 1Q09 Var
Net Income 65 29 126%
(+/-) Financial Expenses (Ver.), Net (9) (3) 176%
(+) Provision for tax and Social Contrib. 13 2 726%
(+) Depreciation and Amortization 5 5 -2%
(+) Interest 33 20 65%
EBITDA 107 52 106%
(+) Stock Options 2 0 -
Adjusted EBITDA 109 52 110%
Adjusted EBITDA Margin 22.1% 17.5% 4.6 p.p
Nossos Resultados em NúmerosFinancial Highlights
51.8
108.5
1Q09 1Q10
EBITDA and EBITDA Margin (%)
17.5%
22.1%
109.6%
13%
10%
28.6
64.5
1Q09 1Q10
Net Income (R$ million) & Net
Margin (%)
126%
10%
13%
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Operating expenses 1Q10 1Q09 Var.
Administrative 33 24 39%
Selling35 26 33%
Administrative/Net Revenue6.8% 8.1% -1.3 p.p.
Selling/Net Revenue 7.1% 8.8% -1.7 p.p.
Administrative/Contracted Sales (% Rossi)5.0% 8.5% -3.5 p.p.
Selling/Contracted Sales (%Rossi)5.2% 9.3% -4.0 p.p.
Administrative/Launches (% Rossi)5.8% 16.7% -10.9 p.p.
Selling/Launches (%Rossi)6.1% 18.3% -12.2 p.p.
Nossos Resultados em Números
More efficient at selling and administrative expenses
Selling and Administrative expenses
Operating expenses
We have decline in expenses as a percentage of net revenue, contracted sales and launches:
8.1% 6.8%
8.8% 7.1%
1Q09 1Q10
Administrative/Net Revenue
Selling / Net Revenue
- 1.7pp
- 1,3pp
8.5% 5.0%
9.3%
5.2%
1Q09 1Q10
Administrative /Contracted Sales (% Rossi)
Selling/ Contracted Sales (% Rossi)
- 4.0pp
- 3.5pp
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Debt Interest Rate Mar/10 Dec/09 Var.
Debt – Short Term 528.0 515.8 2%
Loans – working capital CDI + 1.5 – 2.0% 80.3 69.4 16%
Construction financing TR + 9-11% 422.1 413.4 2%
Debentures - 25.6 33.1 -23%
Debt – Long Term 768.9 694.8 11%
Loans – working capital CDI + 1.5 - 2,0% 150.4 167.1 -10%
Construction financing TR + 9-11% 308.9 213.2 45%
Debentures 106.6% do CDI 309.6 314.6 -2%
Total Debt 1,297.0 1,210.6 7%
Cash position
Short term investments CDB indexed to CDI variation 880.8 969.7
-9%
Long term investments CDB indexed to CDI variation
1.1 1.1 0%
Total cash position881.9 970.9 -9%
Net Debt 415.1 239.7 73%
Net Debt/Shareholders’ Equity 17.7% 10.5% 7.2 p.p.
Net Debt (- SFH)/ Shareholders’ Equity -13.5% -16.9% 3.5 p.p
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Nossos Resultados em NúmerosDebt
Total Debt Breakdown
Cash Burn (in R$ million)
SFH- Housing Policy Financial System
138
108 117
187 175
1Q09 2Q09 3Q09 4Q09 1Q10
18%
56%
26% Loans – working capital
Construction financing
Debentures
20
NossosResultados em NúmerosRSID3 Performance
Market Value RSID3
Number of shares before offering 192.186.388
Number of new shares issued 74.250.000
Total shares after offering 266.436.388
Share price 05/12/2010 13,85
Market Value R$ 3.690.144
80,00
100,00
120,00
140,00
160,00
180,00
200,00
220,00
240,00
RSID x IBOV x IMOB
RSID3 IBOV IMOB
The company outperformed the sector and Bovespa indexes in the last 12 months
21
Equipe de RIIR Team
Cássio Elias AudiCFO and Investor Relations Officer
Carolina BurgInvestor Relations [email protected]. (55 11) 3759-7516
222222
Q&A
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