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2006 and 4Q06 Results Presentation
Investor Relationsri@lopes.com.br
PresentationFrancisco Lopes - COO Roberto Amatuzzi - CFO
Lopes – LPS BrasilMarch, 27th, 2007
DISCLAIMER
This presentation does not constitute an offer, or invitation, or solicitation of an offer to subscribe for or purchase any securities neither does this presentation nor anything contained herein form the basis to any contract or commitment whatsoever.The material that follows contains general business information about Lopes – LPS Brasil – Consultoria de ImóveisS.A as of the Fiscal Year concluder at 31st of December of 2006. It is not intended to be relied upon as advice to potential investors. The information does not purport to be complete and is in summary form. No reliance should be placed on the accuracy, fairness, or completeness of the information presented herein and no representation or warranty, express or implied, is made concerning the accuracy, fairness, or completeness of the information presented herein.This presentation contains statements that are forward-looking and are only predictions, not guarantees of future performance. Investors are warned that these forward-looking statements are and will be subject to many risks, uncertainties, and factors related to the operations and business environments of Lopes – LPS Brasil –Consultoria de Imóveis S.A and its subsidiaries such as competitive pressures, the performance of the Brazilian economy and the industry, changes on market conditions, among other factors disclosed in Lopes – LPS Brasil –Consultoria de Imóveis S.A filed disclosure documents. Such risks may cause the actual results of the companies to be materially different from any future results expressed or implied in such forward-looking statements. Lopes – LPS Brasil – Consultoria de Imóveis S.A believes that based on information currently available to Lopes –LPS Brasil - Consultoria de Imóveis S.A management, the expectations and assumptions reflected in the forward-looking statements are reasonable. Lastly, Lopes – LPS Brasil – expressly refuses any duty to update any of the forward-looking statements contained herein.
Program
I. Operational Highlights 2006 and 4T06
II. Real Estate Market
III. Financial Performance 2006 and 4Q06
IV. Lopes in the Capital Markets
Operational Highlights 2006 and 4Q06
Operational Highlights 2006
Record VGV Sold in Primary Market in São Paulo – R$ 2.4 Billion, 31% Growth compared to 2005.Gross Service Revenues reached R$ 90.6 Mlillion, a 28% increase over last year.VGV Sold reached R$ 114 Million in Rio de Janeiro.
Net Income of R$ 31.7 Million, accounting for an increase of 17% over 2005 Results.
Geographic ExpansionLCI – RJ started operations in July entering Brazil’s second largest market.Opening of LIL (Alphaville) – strengthening of presence in the gated communities market and in upstate São Paulo Market.
SAP DeploymentProject “Go Live” scheduled for 1st of April, 2007.
Note – VGV refers to “Valor Geral de Vendas”, or the General Sales Value of a development
Sales Contracts – Total Volume
37%
1,853
2,545
2005 2006Secondary Market
232
Primary Market*
311
2,085
2,856
Full Year (R$ MM)
1,253
1,556
2003 2004 2005
CAGR: 25 %
CAGR: 25 %
1,853
850
591530
1,166
200220001999 2001 2006
2,545
Primary Market Evolution (R$ MM)
Note: Primary Market is the market for launchings of new developments whereas the secondary market states for the sales of pre-owned properties* Managerial numbers until 12/31/06– Includes Sales Contracts of LCI-RJ in 2006, which totaled R$ 114 Million.
Sales Contracts - By Market Segment
37%
793
2005 2006
692
1,853
2,545
83
2005 200678
232311
4th Quarter
R$ Million R$ Million
Full Year (R$ MM) Secondary Market
34%
15%
6%
Note: Primary Market is the market for launchings of new developments whereas the secondary market states for the sales of pre-owned properties* Managerial numbers until 12/31/06– Includes Sales Contracts of LCI-RJ in 2006, which totaled R$ 114 Million.
0-150k
150k-350k
350k-600k
> 600k
41%
32%
15%
12%
Total Units Sold: 8,078
Note: Does not Include LCI-RJ or Secondary Market Units. Includes slot sales (LIL).Does not account for extra-parking spots sold with units. Includes lots.
3,338 Units
2,555 Units
1,178 Units
1,007 Units
Pre-Sales Contracts by Income Segment – Primary Market in SP*
Units Sold by Income Segment (R$) 2006
Sales Force Evolution
2006 1,400
1,0972005
4Q06 1,400
1,2083Q06
17%
Sales Force - Number of IndependentBrokers (year-end)
28%
Sales Force Number of IndependentBrokers 4Q
100% sold in 20 daysIncreased developer’s margin by 20%Dev.: Cyrela-Lucio-Agra
CASE
Mooca / SP
115/157/202 m2
Central Park – Jun/06
564 Units –GSV - R$284 MM
Location
Usable Area
Sales
Apartments besides the beach96% sold in 1weekDev.: CCDI
CASE
Bertioga / SP
153/197/230 m2
Península de S Lourenço -Oct/06
60 Units –GSV -R$ 54 MM
Location
Usable Area
Sales
2 towers – one apt per floor - 50% sold in 4 weeksAverage Sales Price -R$ 1.55 millionDev.: Even-Tishman Speyer
CASE
Campo Belo / SP
385-674 m2
Particolare – Aug/06
62 Units –GSV -R$ 100 MM
Location
Usable Area
Sales
2 towers – Unique Project50% Sold in 35 days.Dev.: Odebrecht
CASE
Morumbi /SP
146-352 m2
Riverside – May/06
132 Units –GSV -R$ 84 MM
Location
Usable Area
Sales
3 towers
78% sold in 2 months
Dev.: ZKF
CASE
Jabaquara / SP
54-122 m2
Oasis – Jun/06
285 Units –GSV - R$ 38 MM
Location
Usable Area
Sales
LUXURY
MEDIUM-HIGH
MEDIUM
ECONOMIC
LEISURE
Sales Expertise in all Market Segments
Note: Management Reports. Absorption calculated over available units.
Brokerage and Service Fees
4Q05 4Q06
3.16%3.21%
2005 2006
3.23% 3.15%
Net Average Fee – 4th Quarter
Net Annual Average Fee
Increase in Client-Base
2001-2005 2002-2006
38,22740,665
Customers who bought with Lopes in the last 5 years
79,000 new prospects added to database in 2006.
LCI – Rio de Janeiro: New Business Unit
Start of Operations: JUN 06
R$1.5 Million in Investments
First Launching – NOV 06
Sales Contracts - R$ 114 MM
Current Sales Backlog - R$ 600 MM – 31 Developments
Future Developments Pipeline with expressive players such as Brascan, Rossi, Even, Gafisa, João Fortes, Dominus, Via, Plarcon, CR2 e Metro
Case Santa Monica Condominium Club
Apartments from 206 to 260 m2
LOPES launched with BRASCAN, in NOV 06 the development that
obtained the best performance in its segment in Rio de Janeiro in
2006.
Real Estate Market
Current Real Estate Market Scenario
3
6
2.24.8
9.54.5
9.1
6.1
02468
1012141618
2003 2004 2005 2006
Commercial Banks CEF
Commercial Banks were responsible for the largest part of real estate financing in 2006...
Real Estate Credit Availability - Brazil
R$ Billion
65% of savings accounts deposits geared towards real estate.
Chattel mortgage system resulting in less deliquency
Cross Selling Opportunities for Banks
Legally Separated Funding for Developers
Main Drivers to Banks Credit Expansion
Source: ABECIP, Central Bank
16% 16%21%
53%
62%
10%
2%
Brazil Mexico Thailand Chile Malasya USA England
... while mortgage lending still represents only a small fraction of bank’s loan portfolio...
Brazilian Bank’s Loan Portfolio – By Category (Sep. 2006)
Source : Central Bank
Source: IMFI
Mortgage Lending as % of GDP
... and is still way behind international peers.
5%
24%
16%
22%
33%
Real Estate
Other
Services
Industry
Consumer
Current Real Estate Market Scenario – Cont.
In 2006 around 25,400 units were launched in
the city of São Paulo, still 14.4% and 4.4% below
the levels of 2000 and 2003, respectively.
Absorption levels with current growth in the last
years.
26,547
22,550
24,915
25,389
20.000
21.000
22.000
23.000
24.000
25.000
26.000
27.000
2003 2004 2005 20060,0%
2,0%
4,0%
6,0%
8,0%
10,0%
12,0%
14,0%%
São Paulo Market – Units Launched
Fonte: Secovi Fonte: Secovi
Current Real Estate Market Scenario – Cont.
O mercado de São Paulo está se reerguendo
Financial Performance 2006 and 4Q06
Income Statement
(R$ 000)
Gross Service Revenues
Deductions from Gross Revenues
Net Revenues
Operating Expenses
Depreciation and Amortization
Financial Revenues, Net
Operating Profit
Non-Operating Result
Income Taxes and Contributions
Minority Interest
Net Income
2006
90,608
(8,600)
82,008
(41,345)
(1,249)
1,354
40,768
264
(8,221)
(1,117)
31,694
2005
71,001
(6,745)
64,256
(29,695)
(1,105)
1,521
34,977
1
(6,984)
(950)
27,042
4Q06
29,508
(2,849)
26,659
(13,441)
(380)
(83)
12,755
-
(2,480)
1
10,273
4Q05
24,958
(2,317)
22,641
(10,808)
(312)
385
11,906
-
(2,449)
(250)
9,205
Financial Highlights
18%34,55940,663
28%64,256
82,008
22,641 26,659
2005 2006 2005 20064th Quarter
Net Revenues Adjusted EBITDA*
(R$ 000)
11,831 13,21618% 12%
*We disclose adjusted EBITDA as a measure of our performance. We calculate adjusted EBITDA by adding income and social contribution taxes, depreciation, amortization, net financial income,non-operating income and minority interest to our net income or loss. Adjusted EBITDA is not a measure recognized under Brazilian GAAP or U.S. GAAP, does not have a standardized meaning and may not be comparable to adjusted EBITDA, EBITDA or similarly-titled measures as used by other companies or in markets outside Brazil. In addition, we have not calculated adjusted EBITDA in accordance with the guidelines adopted by the SEC for the presentation of non-GAAP financial measures. Adjusted EBITDA should not be considered as an alternative to net income or loss as an indicator of our operating performance or as an alternative to cash flow as an indicator of our liquidity.
Financial Highlights – Cont.
17%25,136
29,370
8,370 7,867
17 % 27,042
31,694
9,205 10,273
2005 2006 2005 2006
Net Income Cash Flow from Operations
4th Quarter
12 % -6%
(R$ 000)
Financial Highlights – Cont.
Cash Flow from Investing Activities (R$mm) Cash Flow from Operations (R$mm)
+18%
34.634.6
11.8 13.2
53.8% 52.3% 49.6%49.6%
2005 2006 4Q05 4Q06EBITDA (R$mm) EBITDA Margin
27.031.7
9.2 10.3
40.7%42.1%38.5%
38.6%
2005 2006 4Q05 4Q06
Net Income (R$mm) Net Margin
+17%
2.40.1
2.2
2005 2006 4Q05 4Q06
25,1 29.4
8.4 7.9
2005 2006 4Q05 4Q06
5.0
40.7
+17%
Adjusted EBITDA Net Income
Cash Flow from Investing Cash Flow from Operations
+12%
+12%
-6%
Lopes in the Capital Markets
Stock Performance and Liquidity
Successful Initial Public Offering – 3 days after company’s IPO the company’s stock increased 25% - Adequate Pricing (R$ 20 per stock) well received by the market.
Average Daily Trade Volume : R$ 6.7 Million Average Stock Quote: R$ 23.24
0.005.00
10.0015.0020.0025.0030.0035.0040.0045.0050.00
12/1
5/06
12/2
7/06
01/0
9/07
01/1
8/07
01/3
0/07
02/0
8/07
02/2
1/07
03/0
2/07
03/1
3/07
03/2
2/07
18.00
20.00
22.00
24.00
26.00
Volume IBOV LPBS3
25% de Valorizaçãoapós o IPO em três dias
150.00
LPBS3: +11%
IBOV: +4%
Fonte: Bovespa, Atualizada até22/03/2007
LPSB3 – Performance and Liquidity
R$/Stock
R$ MM
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