1q09 earnings presentation
DESCRIPTION
TRANSCRIPT
Investor Relations ContactJulia Freitas [email protected]
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First Quarter 2009 ResultsConference Call
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Financial and Operational Performance – Wilson Amaral, CEO
Overview of 1Q09 Results
Highlights of the Quarter
1Q09 launches decreased 72% over 1Q08Launches declined to R$160 million in 1Q09 from R$578 million in 1Q08
Pre-sales increased 11% from 1Q08Pre-sales rose to R$558 million in 1Q09 from R$502 million in 1Q08
Net operating revenues rose 59% from 1Q08Net operating revenues increased to R$542 million in 1Q09 from R$341 million in 1Q08
1Q09 EBITDA reached R$108 million (20% EBITDA margin), a 69% increase over 1Q08
Net income before minority interest and stock options increased to R$57 million in 1Q09, a 21%increase from R$47 million in 1Q08
Gafisa consolidated its presence in affordable segment; Tenda s privileged position to benefit from theGovernment Housing Package announced in March
In this quarter, Gafisa completed six projects totaling 578 units. Alphaville completed a project inGravataí-RS with 654 lots while Tenda completed 21 projects totaling 1,305 units.
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Recent Developments
Government Housing Plan announced on late March and already showing results: “Minha
Casa, Minha Vida” comprises investments over R$30bn. Tenda is well positioned to benefit
from it with over two thirds of its current business concentrated in the targeted segment (one
to ten minimum wages)
Tenda completed a R$600 million debenture with Caixa Econômica Federal: receipt of net
proceeds took place in May and will serve to finance 81 existing projects, with a revolving
credit mechanism
Ceiling for units to be eligible to subsidized SFH loans raised from R$350K to R$500K, directly
benefitting Gafisa
Gafisa sold receivables of completed units with immediate net cash proceeds of R$ 70 million
2006 debenture covenant negotiation underway: the absolute covenant did not contemplate
the current size of the company – we are negotiating with bondholders
Gafisa agreed to transfer Cotia development to Tenda, which was originally part of the Bairro
Novo join venture with Odebrecht
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Gafisa 86%
Alphaville
14%
252
74
108
24
218
62
1Q08 1Q09
Conservative Approach Towards Launches
1Q09 Launches (R$ million)
-72%
Other regions
Rio de Janeiro
São Paulo
5
578
160
195 233
7792
230233
1Q08 1Q09
Gafisa 48%
Alphaville
6%
Tenda 46%
Other Regions
Rio de Janeiro
São Paulo
Strong Pre-sales: significant inventory reduction
1Q Pre-sales (R$ million)
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+11%
502558
Dedicated Management Teams for Each Market Segment, Product Line
Mid, Mid High and High
Vertical
Metropolitan areas
Financing: Banks
Unique Projects
Unit Prices: > R$200K
60% owned by Gafisa
Mid High and High
Horizontal (lots)
Outside Metropolitan Areas
Financing: Direct
Unique Projects
Unit prices: R$70K –R$500K
60% owned by Gafisa
Low Affordable Entry Level
Horizontal / Vertical
Metropolitan Areas and Outskirts
Financing: CEF and Banks
Standardized Projects
Unit Prices: R$50K –R$200K
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Mid, Mid High and High
Vertical
Metropolitan areas
Financing: Banks
Unique Projects
Unit Prices: > R$200K
Sales through own sales force and brokers
60% owned by Gafisa
Mid High and High
Horizontal (lots)
Outside Metropolitan Areas
Financing: Direct
Unique Projects
Unit prices: R$70K –R$500K
Sales through own sales force and brokers
60% owned by Gafisa
Affordable Entry Level
Horizontal / Vertical
Metropolitan Areas and Outskirts
Financing: CEF and Banks
Standardized Projects
Unit Prices: R$50K – R$200K
Sales in stores through own sales force - and brokers
One of the Most Geographically Diverse Homebuilders
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*States where Gafisa or its subsidiaries already launched projects.
188 projects under construction in 18 different states
Projects worth R$ 406 million completed in the first quarter of 2009Gafisa completed 6 developments valued at R$279 million, AlphaVille 1 development valued at R$32 million and Tenda 21 developments or phases valued at R$ 95 million.
71% of our inventory consists of developments launched but not started or up to 30% completedCompleted units represent only 6% of the total PSV available for sales
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Not Started
Up to 30% Completed
30% to 70% Completed
Over 70% Completed
Completed Total
Gafisa 169 942 312 50 100 1,572
AlphaVille 9 67 27 58 38 199
Tenda 325 568 99 122 34 1,149
Total 503 1,577 438 230 172 2,920
Diversified, High-Quality Land Bank Provides StrongPlatform for Growth
207 different sites, in 21 states
SegmentPotential Units
% GafisaPotential Units
100%
Future Sales% Gafisa
R$ bn
Swap Agreements %
Gafisa 18,800 22,298 7,589 40%
AlphaVille 21,845 40,623 3,178 98%
Tenda 67,578 70,116 6,324 20%
Total 108,223 133,036 17,091 76%
76% acquired by swap agreements.
Affordable entry level represents 62% of potential Gafisa units in land bank.
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Financial Performance – Duilio Calciolari, CFO and IR Officer
Overview of 1Q09 Results
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341
542
1Q08 1Q09
108
64
1Q08 1Q09
155
110
1Q08 1Q09
3740
1Q08 1Q09
1Q09 Operating Highlights
Net Revenues (R$ million) Gross Profit (R$ million)
EBITDA (R$ million)
59%
69%
Net Income (R$ million)
Gross Profit Gross Margin
46
20.0%
18.8%
EBITDA EBITDA Margin
32.3%28.5%
40%
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6.8%
Net Income Net Margin
11.7%
-8%
Net Revenues
Strong Pre-Sales Positively Impact Backlog of Revenues to Be Recognized
R$1,0 billion of results to be recognized (66.6% growth compared to 1Q08)
1Q09 1Q08 4Q08 1Q09 x 1Q08 1Q09 x 4Q08
Sales to be recognized – end of period 3,011 1,726 2,997 74.5% 0.5%
Sales tax - 3.65% (110) (63) (109) 74.5% 0.5%
Net sales 2.901 1.663 2.888 74,5% 0,5%
Cost of units sold to be recognized – end of period (1,898) (1,061) (1,873) 79.0% 1.4%
Backlog of results to be recognized 1,003 602 1,015 66.6% -1.1%
Backlog margin - yet to be recognized 33.3% 34.9% 33.9% -158 bps -54 bps
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Gafisa’s Operation
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1Q09 1Q08
Selling Expenses (R$ 000) 46,606 21,419
G&A Expenses (R$ 000) 55,918 36,085
SG&A Expenses (R $000) 102,524 57,504
Selling Expenses / Sales 8.3% 4.3%
G&A Expenses / Sales 10.0% 7.2%
SG&A / Sales 18.4% 11.4%
Selling Expenses / Revenues 8.6% 6.3%
G&A Expenses / Revenues 10.3% 10.6%
SG&A / Revenues 18.9% 16.9%
- Tenda´s consolidation as well as marketing and sales efforts impacted our SG&A ratios - As top line growth improves with the significant opportunity in the affordable entry level, we expect these ratios to also improve
Strong Financial Position: consolidated cash position in May over R$1.1 billion. Additionally, we have:
1Q09 Proforma
With R$600 MM Debenture
4Q08
Total Debt 1,563 2,162 1,552
Total Cash 501 1,101 605
Obligation to Investors 300 300 300
Net Debt & Obligation to Investors 1,362 1,362 1,247
(Net Debt & Obligation to Investors) / (Equity + Minorities) 61.9% 61.9% 59.8%
Cash-burn rate 115 360
R$200 million in securitizable receivables.R$3.4 billion in construction finance lines of credit provided by all of the major banks:
R$1.9 billion in signed contractsR$458 million in contracts in processR$1 billion additional availability
Cash-burn rate substantially lower than 4Q08
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DEBENTURES
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2006 Debenture CovenantPosition as of
March 31, 2009
(Total Debt – SFH financing – Cash) / Equity ≤ 0.75x 0.41x
(Total Receivables + Inventory of Completed Units) / Total Debt ≥
2.0x3.6x
Total Debt – Cash < R$ 1 billion R$1.06 billion
Financial Statements June 30, 2006 March 31, 2009
Cash 422.8 500.8
Equity + Minorities 807.6 2,199.8
Total Assets 1,406.6 5,725.8
Equity / R$1 billion covenant 0.8x 2.2x
2006 debenture covenant – net debt could not be over R$ 1 billion
Absolute covenant does not correspond to current size and equity position of the Company (other covenants were based on relative metrics thus were not impacted):
This covenant is under negotiation with debenture holders and does not breach other financial obligations of the Company. The next assessment date is June,2009
Gafisa´s average daily trading volume: R$63 million. (Apr 1st, 2008 – Apr 30, 2009)
Average Daily Turnover in the last 90 days over free float – 3.6%
SHARE LIQUIDITY
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0200400600
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010203040
Volume (R$ MM) Price (GFSA3)
0
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Avg. daily volume from Apr 01 of 2008 - Apr 31 of 2009 (R$ MM) Market Cap (R$ MM )
NYSE Listing: Gafisa is the only Brazilian real estate company listed in the United States.
Outlook for 2009
Based on current market outlook, we are providing the following full-year guidance for sales and EBITDA margin:
- Consolidated Sales: between R$2.7 to R$3.2 billion (Gafisa 1.0-1.2 bn; Tenda 1.4-1.6 bn; Alphaville 0.3-0.4 bn)
- Consolidated EBITDA margin: between 16% to 17%
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Safe-Harbor Statement
We make forward-looking statements that are subject to risks and uncertainties. These statementsare based on the beliefs and assumptions of our management, and on information currently availableto us. Forward-looking statements include statements regarding our intent, belief or currentexpectations or that of our directors or executive officers.
Forward-looking statements also include information concerning our possible or assumed futureresults of operations, as well as statements preceded by, followed by, or that include the words''believes,'' ''may,'' ''will,'' ''continues,'' ''expects,'‘ ''anticipates,'' ''intends,'' ''plans,'' ''estimates'' orsimilar expressions. Forward-looking statements are not guarantees of performance. They involverisks, uncertainties and assumptions because they relate to future events and therefore depend oncircumstances that may or may not occur. Our future results and shareholder values may differmaterially from those expressed in or suggested by these forward-looking statements. Many of thefactors that will determine these results and values are beyond our ability to control or predict.
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