apresentação institucional english vsite 20080514
TRANSCRIPT
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Institutional Presentation
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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 LPS Brasil – Consultoria de Imóveis S.A
(“Lopes”) as of the Fiscal Year ended at 31st of March 2008. 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 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 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 believes that based on information currently available to Lopes management, the expectations and
assumptions reflected in the forward-looking statements are reasonable. Lastly, Lopes expressly refuses any duty
to update any of the forward-looking statements contained herein.
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Investment Highlights
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Simple and Focused Value Added
Business Model
Main Distribution Channel in a
Growing Industry with a National
Footprint
Low Risk Business with a Diversified
Client Base : Cash Generator Company
Key Position to Benefit from Market
Growth due to Homebuilders’ IPOs
UnmatchedScale and Reach
Experienced Management Team
and Outstanding Track Record
Investment Highlights
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Mr. Francisco Lopes initiates its activities intermediating properties
193540´s
50´s60´s
70´s
80´s
90´s
00´s
Launch one of the first buildings under the condominium concept
First TV advertisement for a real estate development
Start of long term partnership with Gomes de Almeida Fernandez (Gafisa)
Launch and sell of 14 office buildings at Av. Paulista
Launch and sell of 11 office buildings at the Faria Lima region
Creation of the launching system with sales stands and marketing materials, attracting customers specially during weekends
Identification of Marginal Pinheiros as an attractive area and launch one of the first buildings in the region
Start up of sales of hotel condominium (Flats)
Partner of Grupo Espírito Santo in selling one of the largest launching in Lisboa: Parque dos Príncipes
Introduction of the concept of condominium clubs
First “Top Imobiliário” award, in 1993 – Largest Brokerage Company
Lopes becomes an important player at the segment of gated communities
Triples in size in a decade, strengthening its leadership
Wins its 14th consecutive “Top Imobiliário”
The company’s first logo
Becomes reference in real estate launchings and presents its new logo
Brokerage Market Has No Other Company With The History and Track Record of Lopes
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Lopes’ Market Share Evolution – São Paulo Market
Uncontestable leader in the São Paulo real estate market for more than 10 years
Lopes’ Market Share – São Paulo Market
Source: Embraesp. Launch GSV Market share in the greater São Paulo area. Non-official information for 2007.
Posi
tioni
ng
1
2
3
4
5
1996 1997 1998 1999 2000 2001 2002 2003 2004 2005
Competitor 1 Competitor 2
Competitor 4 Competitor 5
2006
Market Positioning - GSV
2007
Source: Embraesp. Launched VGV in the greater São Paulo area.
Competitor 3
Competitor 6
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Lopes is exclusively focused on providing value-added real estate brokerage services to its client-developers, with a permanent concern of avoiding conflicts of interest
Formal relationship through exclusivity agreements
Over 160 Clients
– 46,393 effective buyers1
– 80,000 prospects included in our data base in 2006
Client-DevelopersClient-Developers Client-BuyersClient-Buyers
Ho
w d
o w
e d
o
Ho
w d
o w
e d
o
bus
ine
ss?
bus
ine
ss?
Ho
w d
o w
e m
ake
mo
ney?
Ho
w d
o w
e m
ake
mo
ney?
2, 3
2, 3
$ 0.53$ 0.12
$ 2.45
$ 100
$ 10
Total Price per Unit
Down-payment
GrossCommission
$ 0.73
$ 0.12
$ 1.05
Agents +Managers
Reve
nue Re
co
gnitio
nRe
venue
Rec
og
nition
$ 5
Developer
1 Over the last 5 years in Sao Paulo2 Figures only for example, not related to financials3 Considering Sao Paulo market
$ 1.90
$ 3.10
Net Commission Premium Contract Advisory Fee
Simple and Focused Business Model…
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Lopes’ business is clearly fundamental to the profitability and returns of its clients…
Working Capital
Is FundamentalPre Sales
Speed of Sales Concentrated in
the Launch Period
Reliance on Sales Force Scale and EfficiencyReliance on Sales Force Scale and Efficiency
Speed of Sales is the Key
for Profitability
With a Key Role in the Real Estate Value-Chain
About 6,000 brokers
Over 500 Exclusive Sponsored Sales Points
Real Estate DevelopmentReal Estate DevelopmentBrazilian Market DynamicsBrazilian Market Dynamics
…and its scale and reach – nearly impossible to replicate – enhance this importance
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Lopes is focused on providing its clients with a full range of consulting services, from land procurement advisory to product formatting, development and sale
Value-Added Services Across the Development Cycle
Determines the Site’s Vocation
Masters Market
Research
Formats ProductMeeting Buyers’
“Wants and Needs”
Develops Marketing Campaign
Optimizes Media
Negotiations
Coordinates Product
Launching Events
Individual Sales
Strategy Created to
Each Product
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Lopes’ unmatched reach and remarkable scale reinforce each other, enhancing success rate and permanently attracting new brokers
More More AgentsAgents
(6,000 (6,000 Brokers)Brokers)
More More Efficiency Efficiency in Salesin Sales
More Trust More Trust from from
DevelopersDevelopers
More Deal More Deal FlowFlow
Amplify market intelligenceAmplify market intelligence
Improve financial performanceImprove financial performance
Attract and maintain top talentsAttract and maintain top talents
More More Sales Sales PointsPoints
(500 Sales (500 Sales Sites)Sites)
More Media More Media ExposureExposure
3,500 pages 3,500 pages / year/ year
Virtuous Growth Cycle: High Barrier to Entry
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HABITCASA: Focused on the Economic Segment
• Business Unit Exclusively Focused on the Economic Segment
• Units ranging up to R$180 thousand
• Focused in all Brazilian real state market
• Own units in São Paulo and Rio de Janeiro
• The other markets work with the brand
The economic segment will be one of the most important drivers for the long term growth of the real estate industry, due to the Brazilian housing deficit of 8 million homes1.
1 According to Fundação Getúlio Vargas – FGV
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Geographic Expansion
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Lopes is Growing Nationwide
SOUTHEAST REGIONSão Paulo – Lopes is the incontestable leader and with the acquisition of Cappucci & Bauer, become the leader in the Campinas Metropolitan Area.
Rio de Janeiro – LCI-RJ and Patrimóvel operate separately, but with synergies on the back office, promoting reducing of cost.
Espírito Santo – Entry in this market through the acquisition of Actual, leading real estate broker in that market.
Minas Gerais – Greenfield operation in the state of Minas Gerais, with operations scheduled to start in February 2008.
SOUTHERN REGIONStates of Rio Grande do Sul, Santa Catarina and Paraná – After the acquisition of Dirani in May 2007, Lopes is already benefiting from operating synergies and foresees opportunities to consolidate its leading position in the region.
MIDDLE WEST REGIONFederal District – Entry in this market through the acquisition of Royal, the industry leader in the region.
NORTHEAST REGIONBahia - Greenfield operation in the state of Bahia, with launches initiated in October 2007.
Pernambuco – Entry in this market through the acquisition of Sergio Miranda, one of the leading real estate brokers in that market.
Ceará - Entry in this market through the acquisition of Immobilis, leading real estate broker in that market.
NORTHERN REGION
Pará – Greenfield operation in the state of Pará with launches scheduled for March 2008.Lopes tracks developers’ regional movements, consolidates its
position as the largest consulting and sales player
PR
RJ
BA
SP
RS
ES
SC
PE
MG
PA
DF
CE
Business Unit State Lopes Participation
Market
Habitcasa SP/RJ 100% Primary Market
LCI-RJ RJ 100% Primary Market
Lopes Dirani PR/SC/RS 75% Primary and Secondary Market and Rent
Lopes Salvador BA 100% Primary Market
Lopes Actual ES 60% Primary and Secondary Market
Lopes Sérgio Miranda PE 60% Primary and Secondary Market
Lopes Minas Gerais MG 75% Primary Market
Lopes Bauer SP – Campinas 60% Primary and Secondary Market
Lopes Pará PA 60% Primary and Secondary Market and Rent
Lopes Royal DF 51% Primary and Secondary Market
Patrimóvel RJ 100% Primary and Secondary Market
Lopes Immobilis CE 60% Primary and Secondary Market and Rent
Expansion Plan
Lopes is present in 11 States and Federal District, through more than 50 cities
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Geographic Expansion Model
Geographic Expansion Model
Aquistions• Earn-out system• Call and put mechanisms• Non compete clause
Greenfields• Alliance with local partners• Fragmented and unprofessional markets• Low barriers of entrance
Integration• Focused team on business units integration• Process and systems (SAP and SIAV)• Technology of communications (VOIP)
Objectives
• To capture the opportunities on markets very fragmented with lower efficiency• To decrease the dependency of São Paulo• To render services on the most important markets, through a model tested on the most competitive market of Brazil
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Lopes developed a geographic expansion model that aligned interests between Lopes and its subsidiaries, generating value to its shareholders
Geographic Expansion
The Lopes Group 1Q07 2Q07 3Q07 4Q07 1Q08 2Q08
LPS Brasil 3/3 3/3 3/3 3/3 3/3 3/3
LCI-RJ 3/3 3/3 3/3 3/3 3/3 3/3
Lopes Dirani - 1/3 3/3 3/3 3/3 3/3
Lopes Salvador - - 3/3 3/3 3/3 3/3
Lopes Actual - - 1/3 3/3 3/3 3/3
Lopes Sérgio Miranda - - - 1/3 3/3 3/3
Lopes Minas Gerais - - - - 2/3 3/3
Lopes Bauer - - - - 1/3 3/3
Lopes Pará - - - - - 3/3
Lopes Royal - - - - 2/3 3/3
Patrimóvel - - - 1/3 3/3 3/3
Lopes Immobilis - - - - 1/3 3/3
Note: For purposes of the information in this slide, the fraction numerators represent the number of months for which a unit has been operating, whereas the denominators represent the number of months making up the relevant period.
For the second quarter of 2008, all Lopes units will be operational and active.
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Joint Venture: Lopes Itaú
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Strengthening of mortgage origination and other related services.
Leadership position in their respective
markets
Management Excellence High Value Brands
Joint Venture Lopes Itaú
Establishment of a Promotion Sales Company (non-financing company) to promote and offer financial products and services – mortgage and other related – with emphasis on the secondary market and with
exclusivity to Lopes’ clients
Direct and exclusive access to its customer database
Seamlessly integrated operation with Lopes’ sales process, including an incentive compensation plan
Lopes media exposure
Service excellence Competitive financing terms and
conditions Speed and quality of processing Experienced credit analysis Successful exposure to the lending
business and in joint ventures
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Earn-out will be paid every 2 years during a 10-year period, conditioned to the achievement of certain operational metrics
Banco Itaú will have exclusivity to offer mortgages and related financial products to Lopes’ clients
Joint Venture Lopes Itaú: Transaction
Transaction
Structure • No full recourse over Lopes’ assets• Results accounted through a Virtual P&L
Term 20 years
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Brazilian Real Estate Market
Brazil
Shortage
in units 7.9 MM
% 14.9
Northeast
Shortage
in units 2.7 MM
% 20.6%
Southeast
Shortage
in units 2.9 MM
% 12.2%
South
Shortage
in units 0.87 MM
% 10.4%
Mid West
Shortage
in units 0.54 MM
% 14%
North
Shortage
in units 0.85 MM
% 22.9%
Regional Housing Shortage
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Social Economic Scenario and Housing Shortage
5,4
6,7
0
3
6
9
1991 20062000
7,9
Source: Fundação João Pinheiro e Ministério das Cidades
Source: Credit Suisse
47 million homes
19%A/B > 10 minimum wages- US$ 1.900 52%
5 – 10 minimum wages- US$ 950 - US$ 1.900
30%C 28%
< 5 minimum wages - US$ 950
51%D/E 20%
Source: Losango
-6% -4% -2% 0% 2% 4% 6%
0 to 4
10 to 14
20 to 24
30 to 34
40 to 44
50 to 54
60 to 64
more than 70
Men Women
* Qualitative Housing Shortage is the number of times that a family moves to different houses in life
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Age Pyramid in Brazil - 2005 Segments by Income in Brazil
Quantitative Housing Shortage(millions of homes)
Qualitative Housing Shortage
Prospects For Investments In the Brazilian Real Estate Market
Share of Investments by Brazilian Economic Sectors
Source: BNDES, prepared by SAE
(% of GDP)
37%
In the coming four years, residential construction in Brazil should represent 44.1% of the investments in the Brazilian market, an increment of 10.7% over investments for the past four years.
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Real Estate Credit Availability from Commercial Banks – Brazil
Source: IMF - 2006
CAGR Savings Accounts: 54.4%CAGR FGTS: 18.3%CAGR Total: 37.3%
(R$ Bi)
Commercial banks were mainly responsible for the expansion in real estate financing in 06’and the credit expansion trend was reflected in the market in 2007 and will be in 2008
Current Brazilian Real Estate Market Scenario
FGTS Savings Accounts
25Source: EMBRAESP
R$ Billion
São Paulo Real Estate Market – Launches in R$
The SPMR has averaged 8.4 Billion in new residential launches over the last 10 Years.
Evolution of Launches in the São Paulo Metropolitan Region
The volume of launches in the1Q08 reached
R$2.3 Billions in São Paulo
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33%46%
60% 66%51%
0%
10%
20%
30%
40%
50%
60%
70%
2003 2004 2005 2006 2007
Market absorption levels reinforce the conclusion that demand is recovering after the market’s downturn in the late 90’s
Uni
ts S
old
:36
.6k
66%
Units Launched
38.5kMarket Absorption:
Units Sold/ Total Units Available
Initial Supply:
17.2 k
Source: Secovi-SP
Market Absorption – City of São Paulo
São Paulo Real Estate Market – Market Absorption
Market Absorption in 2007 To
tal S
upp
ly55
.7 k
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Operational Highlights 1Q08
Contracted Sales*
Total GVS
* Unaudited managerial information.
Total launched GVS
(in R$ million) (in R$ million)
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CAGR: 35%
2,336
719
225%
236%
Contracted Sales per Market
(R$ MM) (R$ MM)
29
236%132%
For both Primary and Secondary Market, Lopes presented a significant contracted sales volume growth.
GVS – Primary Market GVS – Secondary Market
In 2007, the geographic diversification resulted an increase of the participation of other regions in the contracted sales, it also highlighted the good position of Lopes in the economic segment.
Contracted Sales per Region and Segment
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Contracted Sales per Region in 1Q08(Primary Market – In GSV)
Contracted Sales per Segment in 1Q08(Primary Market – In Units)
Sales Force
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32
Financial Highlights 2008
(R$ thousands) (R$ thousands)
(R$ thousands)
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164%
37.5%
42.3%
197%
26.4%
27.1%
171%
Financial Highlights
Net Revenue Adjusted EBITDA*
Adjusted Net Income**
Ebitda Margin
Net Margin
*Adjusted EBITDA is a non-accounting measure created by Lopes, consisting of net income before the minorities share, interest, income tax and social contribution tax, net financial result (financial revenues and expenses), depreciation, amortization and non-operating income. The calculation of Adjusted EBITDA does not correspond to any generally accepted accounting practice in Brazil, does not represent cash flow for the periods presented, and should not be considered a substitute for net income as an indicator of operating performance, or a substitute for cash flow as an indicator of liquidity. Adjusted EBITDA does not have a standardized meaning and the definition of EBITDA adopted by Lopes may not be identical or comparable to the definitions of EBITDA or Adjusted EBITDA used by other companies.**Adjusted Net Income is an accountability issue decided by Lopes, it represents the amount of net income without the goodwill amortization.
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Guidance for 2008
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Guidance for 2008 (R$MM)
35%
105%
275% 596%
* The information for 2008 is based in the middle point of the divulged guidance.** Includes Lopes Bauer, located in São Paulo state.
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Additional Information
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Two seasonality components:
• Natural variation in sales related to holidays or vacation periods over the year. The first quarter is more significantly affected by summer vacations and the week of Carnival celebrations.
• Variations in sales stemming from the sales pipeline in the real estate development market, in which projects launched are subject to licensing and permit requirements, which account for significant distortions in a quarter-over-quarter comparison.
Contracted Sales Seasonality
Unstable sales behavior in each quarter accounts for variations in yearly sales
17% 18%14%
21%
31%
22%25%
22% 23%
37%
29%
41%
2005 2006 2007
1Q 2Q 3Q 4Q
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Launches – São Paulo
Lopes reached a market share of 25%* in São Paulo, consolidating its leading position in the largest and most competitive Brazilian market
* Market share according to EMBRAESP ranking for launches, using the criteria of points in the São Paulo Metropolitan Region in the 1Q08.
Ranking Company GSV (R$)1 LOPES R$ 570.368.851 2 ABYARA R$ 326.457.390 3 IPRICE R$ 249.466.546 4 FERNANDEZ MERA R$ 165.567.490 5 ITAPLAN R$ 117.896.360 6 AVANCE R$ 83.825.640 7 DEL FORTE R$ 61.440.500 8 SIM R$ 58.083.200 9 NOSSACASA R$ 54.543.950 10 TENDA R$ 40.552.000
43%
7%
49%
1% Foreigner Investors - Free Float
Nacional Investors - Free Float
Controlling
Management
Ownership Structure
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Total of 49.390.715 shares
Ownership Structure Post-IPO
Institution Analyst Contact
Agora Cristiane Viana (+55 21) 2529-3393 [email protected]
Banco Espírito Santo Rodrigo Bonsaver (+55 11) 3074-7412 [email protected]
Credit Suisse Marcelo Telles (+52 55) 5283-8933 [email protected]
Fator Eduardo Guimarães (+55 11) [email protected]
Itaú Tomas Awad (+55 11) 5029-4517 [email protected]
Link Celso Boin Jr. (+55 11) 4505-6701 [email protected]
Planner Ricardo Martins (+55 11) 2172-2600 [email protected]
UBS Pactual Rodrigo Monteiro (+55 21) 3262-9208 [email protected]
Analysts Coverage
Waited for 2008
Coin Valores
Bulltick
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