Conference Call
4Q11/2011 Earnings4Q11/2011 Earnings
02/15/2012
SPEAKERS
• MAURÍCIO TAVARES BARBOSA
Chief Executive Officer and Development Officer
• IAN MONTEIRO DE ANDRADE
2
CFO and IRO
4Q11 highlights
• New budget update with an impact of :
– 4Q11: R$81.7 MM
– 2011: R$171.8 MM
• Contracted Sales:
– R$1,174.2 million in 2011, stable level compared to 2010, even with fewer launchings
– The low income segment had 87% growth in accumulated comparison.
3
– The low income segment had 87% growth in accumulated comparison.
– inventory sales : R$1.07 billion in 2011 (91.1% of contracted sales in 2011)
• The biggest volume of deliveries : 3613 units or R$ 579.3 million in PSV in 2011.
• Low-income segment: 44% increase in the accumulated net income and strong growth in the number of constructions in progress.
• Beginning of the construction in the ("AAA") projects in Sao Paulo totaling 88.836m ² of GLA (part CCDI):
4Q11’s Operational Results4Q11’s Operational Results
5
CONTRACTED SALES
248.5 195.8 59.5
937.1 721.7
79.6 105.2
84.9
242.2 452.5
328.2 301.1
144.3
1,179.3 1,174.2
4Q10 3Q11 4Q11 2010 2011
CONTRACTED SALES(R$ MM)100% CCDI
Low Income(HM)
Traditional
-56,0%
-52,1%
-0,4%
79.9% 85.4%
99.7%
93.2%
74.7%
20.1% 14.6%
0.3%
6.8%
25.3%
328.2 316.5
412.3
301.1
144.3
4Q10 1Q11 2Q11 3Q11 4Q11
CONTRACTED SALES OF LAUNCHINGS AND INVENTORY
launchings sales (%)
Inventory sales (%)
SALES ORIGINED IN THE STATE OF
SÃO PAULO: 92,4%SALES FROM SEGMENTS UNDER R$ 500.0
THOUSAND PER UNIT REPRESENTED 90,8%
4Q10 3Q11 4Q11 2010 20114Q10 1Q11 2Q11 3Q11 4Q11
São Paulo
(countryside+shoreline)…
São Paulo
(Capital + RMSP)38.0%
others7.6%
LOCATION
low income/
economic58.1%
Medium31.4%
mid high1.3% high and
luxury9.2%
MARKET SEGMENT
6
Project Location Launching Units
PSV - %
CCDISegment
(R$ MM)
1 Connect WorkstationCampos dos
Goytacazes, RJfeb/11 243 29,1 Small Offices
2 Soul Jardim Sul São Paulo, SP feb/11 180 38,3 Medium
3 Set Cabral Curitiba, PR feb/11 151 39,2 Mid-high
4Condomínio Residencial Vale das
FigueirasValinhos, SP mar/11 760 78,0 Low Income
5Vivenda do Horto - Vivenda
OrquídeaHortolândia, SP mar/11 173 19,7 Low Income
LAUNCHINGS (R$MM)
LANÇAMENTOS RECENTES
Location: São Paulo – Jd. Sul
PSV: R$51,3MM (100% CCDI)
40,1 m² a 55,0 m² (1 e 2 Dorms )
Launching in Jan/12
Orquídea
6 Vanguard Ipiranga São Paulo, SP jun/11 70 11,7 Low Income
7 Quinta das Figueiras Cajamar, SP jun/11 117 13,9 Low Income
8 Vega Work & Life Curitiba, PR aug/11 397 87,1 Medium
9 Estação Vida Nova Itapevi, SP sep/11 480 55,0 Low Income
10 Feel Jardim Sul São Paulo, SP oct/11 198 64,1 Medium
Total Launchings in 2011 2.769 436,1
RECENT LAUNCHINGS
Own Construction - Status
7
PSV: R$256 MMLaunching: Sep/10Units: 246 (3 Towers)Beginning: Jun/2011Evolution: Construction 8º month;
PSV: R$71 MMLaunching: Nov/10Units: 312 (2 Towers)Beginning: Jun/2011Evolution: Construction 8º month;
Macaé - RJSão Paulo - SPPSV: R$42 MMLaunching: Dec/07Units: 168Beginning: Jan/2009Evolution: Foundation 100%; Structure 100%;
São Paulo - SP
Construction sites that we assumed
PSV: R$49 MMLaunching: Oct/2010Evolution: Construction 16º month; Foundation99%; Structure98%; Masonry 85%; Finishing 25%
Delivery: Oct/2012
PSV: R$35 MMLaunching Feb/2011Evolution: Construction 12º month, Foundation 98%; Structure 95%; Masonry 75%, Finishing 10%
Delivery: Feb/2013
PSV: R$29 MMLaunching : Aug/2010Evolution: Construction 18º month, Foundation 100%,Structure 100%; Masonry98%; Finishing 40%
Delivery: Jun/2012
Evolution: Construction 8º month; Foundation 90%; Structure 10%
Delivery: Nov/2013
Evolution: Construction 8º month; Foundation 95%; Structure 5%
Delivery: Aug/2013
São Paulo - SP
São Paulo - SP
São Paulo - SP
Evolution: Foundation 100%; Structure 100%; Masonry 100%; Finishing 95%
Delivery: Mar/2012
PSV: R$141,5 MMLaunching: Mar/08Units:876Beginning: Oct/08
Evolution: Foundation 100%; Structure 98%; Masonry 96%, Finishing 79%
Delivery: Aug/12São Paulo - SP
INTERCLUBES
Low Income (HM): Fully Verticalized Construction Process
8
30 projects and 8,415 under construction (dec/11)
294 404 1,025
1,723 1,828
4,290
1T10 3T10 4T10 2010 2011 2012(E)
UNITS DELIVERED
3,934 5,550
8,415
2009 2010 2011
UNITS UNDER CONSTRUCTION
PSV: R$29 MMBeginning: jun/2010Evolution: 78.8%
Delivery: Apr/2012
PSVR$52 MMBeginning: Jun/2011Evolution: 93.6%Delivery: Feb/2012
PSV: R$26 MMBeginning: Mar/2011Evolution: 64.4% Delivery: Aug/2012
1T10 3T10 4T10 2010 2011 2012(E)2009 2010 2011
(E): Estimativa
Vivenda Ribeirão Águas de Março Bela Vista Varandas
9
553.9 422.2
1,195.3
503.5
129.0 157.1
390.0
393.0 683 579
1,585
897
2,373 3,613
9,798
5,464
Delivery Evolution (100% CCDI)
2007
200820.0%
200911.4%
201025.7%
2011
CONSTRUCTION PER YEAR OF LAUNCHING*
CCDI 650
HM 1.723
CCDI 1.785
HM 1.828
CCDI 5.508
HM 4.290CCDI 1.669
HM 3.795
Contruction Evolution
553.9 422.2 503.5
2010 2011 2012(E) 2013(E)
VGV HM R$MM VGV CCDI R$MM Unidades Entregues
200728.6% 2011
14.3%
*PSV
64%
36%
2012 (E)
50%50%
2013 (E)
Evolution of Own Construction participation in the traditional segment (in PSV)
45%
55%
2014 (E)
22%
78%
2015 (E)
Third-Party Construction
Own Construction
10
2011: 3,613 units or R$579.3 MM in PSV 4Q11: 274 units or R$96.1 MM in PSV
Deliveries - 4Q11/2011
ID Jardim SulSegment: HighPSV: R$50.0 MMUnits delivered: 46Launching: Mar/08
Ecos’s Natureza Clube 2Segment: MediumPSV: R$46.1 MMUnits delivered: 228Launching: Dec/07
11
TRIPLE A
Paulista JK
Photo of “Paulista”
construction site (dec/11) Photo of “JK” construction site (dec/11)
Beginning of construction: april/11
Development Registration (RI): 1Q12 (E)
Beginning of construction: may/11
Development Registration (RI): 1Q13 (E)
Completion of construction (E):• Tower A: 4Q14• Tower B: 4Q15
Completion of construction (E):• Mall: 2Q15• Tower: 2Q15
Leasable Area Leasable Area
GLA m² 100% % CCDI (50%)
Tower 22,052 6,136
Mall 19,000 9,500
GLA m² 100% % CCDI (60%)
2 Towers 122,000 73,200
CCDI CCP
50% 50%
SPE: CAMARGO CORRÊA CYRELA PAULISTA 1230
CCDI P.M.V.
60% 40%
SPE: VIOL EMPREENDIMENTOS IMOBILIÁRIOS S.A.
Leasable Area
Societary Structure
Leasable Area
Societary Structure
Financial Performance
� Deviations caused by:
1. Manpower and material Cost pressures
2. Management challenges in the outsourced constructions
3. Contractual disputes with some contractors
13
Despite the wide update budget held in 2Q11, new "overruns" of R$ 121.4 MM were quantified in the 4Q11
� New budget update reflects the following measures taken by the Administration:
1. Hiring independent engineering firms to evaluate the budgets of most critical constructions (10 works)
2. Creation of the Budget Department in the engineering board
3. Replacement of contractors in the constructions with low physical and/ or financial performance
14
The 4Q11 budget update...
• The budget update is still concetrated in developments launched until 2008
3.8% 2009-1130%
Budget update 4Q11
R$121.4MM
2011 Total Budget update(2T11 + 4T11)
8.5% 2009-1119%
R$262.6MM
Por ano de Lançamento
Total Budgeted cost
Por ano de Lançamento
Year ofLaunch
* Budget base dec/11 CCDI Consolidated R$3.1 bi
2007-0870%
Total Budgeted cost*
Year of launch
2007-0881%
.. that impacted in the result non recurringly in R$ 81.7 million...
15
INCOME STATEMENTS (R$ MM) 4Q11 Pro Forma
Update 4T11 Reported 2011 pro formaUpdate
2011 ReportedCONSOLIDATED
GROSS REVENUE FROM SALES AND/OR SERVICES
285,4 (87,6) 197,7 1.161,6 (183,5) 978,2
GROSS REVENUE DEDUCTIONS (10,2) 3,2 (7,0) (37,9) 6,7 (31,2)
NET REVENUE FROM SALES AND/OR SERVICES
275,1 (84,4) 190,7 1.123,7 (176,8) 946,9
COST OF SALES, RENTALS AND SERVICES (232,8) - (232,8) (906,9) - (906,9)
GROSS PROFIT 42,3 (84,4) (42,2) 216,8 (176,8) 40,1
GROSS MARGIN 15,4% -22,1% 19,3% (0,2) 4,2%
OPERATING INCOME (EXPENSES) (43,2) - (43,2) (163,4) - (163,4)
In 2011 a provision was made to cover fines and compensations to customers for late deliveries (R$ 20.4 million)
OPERATING INCOME (EXPENSES) (43,2) - (43,2) (163,4) - (163,4)
Selling Expenses (5,6) - (5,6) (33,8) - (33,8)
General and Administrative Expenses (37,6) - (37,6) (129,7) - (129,7)
General and Administrative Expenses (29,8) - (29,8) (100,9) - (100,9)
Other Expenses (7,8) - (7,8) (28,7) - (28,7)
INCOME(LOSS) FROM OPERATIONS BEFORE FINANCIAL
(0,9) (84,4) (85,4) 53,4 (176,8) (123,4)
INCOME (EXPENSES) (12,8) - (12,8) (42,4) - (42,4)
INCOME BEFORE INCOME TAX AND SOCIAL CONTRIBUTION
(13,7) (84,4) (98,2) 11,0 (176,8) (165,8)
INCOME TAX AND SOCIAL CONTRIBUTION (5,3) 2,7 (2,6) (31,9) 4,9 (27,0)
NET INCOME (19,0) (81,7) (100,7) (21,0) (171,8) (192,8)
NET MARGIN (%) -6,9% - -52,8% -1,9% - -20,4%
16
273.7 308.7190.7
932.5 946.9
25.5% 21.3%
-22.1%
25.6%
4.2%
-90.0%
-70.0%
-50.0%
-30.0%
-10.0%
10.0%
30.0%
0
100
200
300
400
500
600
700
800
900
4Q10 3Q11 4Q11 2010 2011
NET REVENUE (R$ MM) AND MARGINNet Revenue
Gross Margin
*Excluding the sale of the ItautecPiece of land by the amount of R$100 million in 1Q10, this deal created an impact in the amount of R$49.4 million in Net Income.
21.4 26.3 29.8
72.9
100.96.5%
8.7%
20.7%
6.2%8.6%
-9.0%
-4.0%
1.0%
6.0%
11.0%
16.0%
21.0%
8.0
18.0
28.0
38.0
48.0
58.0
68.0
78.0
88.0
98.0
4Q10 3Q11 4Q11 2010 2011
GENERAL AND ADMINISTRATIVE EXPENSES (R$MM)
G&A G&A/Contracted Sales
13.510.2
5.6
33.3 33.8
4.1%3.4% 3.9%
2.8% 2.9%
-4.0%
-2.0%
0.0%
2.0%
4.0%
6.0%
0
5
10
15
20
25
30
4Q10 3Q11 4T11 2010 2011
SALES EXPENSES(R$MM)
Sales Expenses Sales Expenses/Contracted Sales
4Q10 3Q11 4Q11 2010 2011
Sales reduced 52.1% in 4Q11
Results and Margin to be recognized per year of launching
17
1,242.11,495.9 1,437.6
200.0
400.0
600.0
800.0
1,000.0
1,200.0
1,400.0
1,600.0
REVENUES TO BE RECOGNIZED (R$MM)
398.4 449.8 400.1
50.0
100.0
150.0
200.0
250.0
300.0
350.0
400.0
450.0
500.0
RESULTS TO BE RECOGNIZED (R$MM)
-
200.0
4Q10 3Q11 4Q11
-
50.0
4Q10 3Q11 4Q11
MARGIN TO BE RECOGNIZED
YEAR OF
LAUNCHINGTRADITIONAL
LOW
INCOME
CONSOLIDATE
D
2007 7.0% - 7.0%
2008 17.1% 2.,2% 17.3%
2009 25.8% 25.6% 25.8%
2010 34.3% 27.5% 31.7%
2011 32.2% 29.8% 31.0%
TOTAL DEC
201127.8% 27.9% 27.8%
MARGIN TO BE RECOGNIZED
Increase in debt aligned with increase of construction
18
154.6128,0
26.6
CASH CHANGE (R$MM)
363.2559.1 617.5
397.9
412.2 411,0
NET DEBT (R$MM)
SFH Dívida Líquida ex SFH
761,1
971,2 1.028,5
Caixa em Set/11 Caixa Líquido usado no 4T11
Caixa em Dez/11 4T10 3T11 4T11
20.4%
37.6%
48.4%
13.5%
22.7%
28.7%67,1%
119,2%
154,0%
0
50
100
150
4Q10 3Q11 4Q1110.0%
20.0%
30.0%
40.0%
50.0%
60.0%NET DEBT/SE
net debt ex SFH/ SE
net debt ex sfh/(SE+ ref)
net debt/SE
396.6
173.5 37.8 9.5
0.2
205.4 205.4
396.8
173.5
243.2 214.9
GROSS DEBT TIMELINE(R$ MM)
Debêntures SFH
Long-term and low cost debt profile
19
Gross Debtdec/2011R$1,028.5 millions
Custo das Debêntures: DI+1,9% 37.8
2012 2013 2014 2015 em diante
1,037.7
221.1
73.2
2012 2013 2014 em diante
CRONOGRAMA DE RECEBIMENTO DO CONTAS A RECEBER(R$ MM)
AccountsReceivabledec/2011
R$1,332 milhões
CONTACT INFORMATION
Ian Monteiro de AndradeIan Monteiro de Andrade
CFO and IRO
Mara Boaventura Dias
IR Manager
Caio Sampaio Rodrigues
IR Analyst
Tel: (11) 3841-8809/4824