Presentation 2Q09

Presentation 2Q09

• 1.
  First Quarter 2009Results Conference Call Investor Relations Contact Julia Freitas Forbes [email protected] 1
• 2.
  Overview of 1Q09Results Financial and Operational Performance – Wilson Amaral, CEO 2
• 3.
  Highlights of theQuarter 1Q09 launches decreased 72% over 1Q08 Launches declined to R$160 million in 1Q09 from R$578 million in 1Q08 Pre-sales increased 11% from 1Q08 Pre-sales rose to R$558 million in 1Q09 from R$502 million in 1Q08 Net operating revenues rose 59% from 1Q08 Net 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 the Government Housing Package announced in March In this quarter, Gafisa completed six projects totaling 578 units. Alphaville completed a project in Gravataí-RS with 654 lots while Tenda completed 21 projects totaling 1,305 units. 3
• 4.
  Recent Developments GovernmentHousing 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 4
• 5.
  Conservative Approach TowardsLaunches 1Q09 Launches (R$ million) Other regions Rio de Janeiro São Paulo Alphaville 14% 578 -72% 218 108 160 252 62 24 74 1Q08 1Q09 Gafisa 86% 5
• 6.
  Strong Pre-sales: significantinventory reduction 1Q Pre-sales (R$ million) Other Regions Rio de Janeiro São Paulo +11% 558 502 Tenda 46% Gafisa 48% 233 230 92 77 195 233 1Q08 1Q09 Alphaville 6% 6
• 7.
  Dedicated Management Teamsfor Each Market Segment, Product Line Mid, Mid High and High 60% owned by Gafisa 60% owned by Gafisa 60% owned by Gafisa Affordable Entry Level Low 60% owned by Gafisa Vertical High and High Mid, Mid Mid High and High Affordable Entry Level Mid High and High Horizontal / Vertical Vertical Metropolitan areas Horizontal (lots) Metropolitan Areas and Horizontal / Vertical Horizontal (lots) Financing: Banksareas Outside Metropolitan Outskirts Metropolitan Areas and Metropolitan Areas Outside MetropolitanFinancing: CEF and BanksOutskirts Unique Projects Financing: Banks Areas Standardized Projects Financing: Direct Financing: CEF and Banks Unit Prices: > R$200K Unique Projects Financing: Direct Unit Prices: R$50K – Unique Projects R$200K Standardized Projects Unique Projects Unit Prices: > R$200K Unit prices: R$70K – Unit Prices: R$50K – R$200K R$500K Unit prices: R$70K – Sales through own sales R$500K Sales in stores through own force and brokers sales force - and brokers Sales through own sales force and brokers 7
• 8.
  One of theMost Geographically Diverse Homebuilders 188 projects under construction in 18 different states *States where Gafisa or its subsidiaries already launched projects. Projects worth R$ 406 million completed in the first quarter of 2009 Gafisa 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. 8
• 9.
  71% of ourinventory consists of developments launched but not started or up to 30% completed Completed units represent only 6% of the total PSV available for sales Not Up to 30% 30% to 70% Over 70% Completed Total Started Completed Completed Completed 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 9
• 10.
  Diversified, High-Quality LandBank Provides Strong Platform for Growth 207 different sites, in 21 states Future Sales Potential Units Potential Units Swap Agreements Segment % Gafisa % Gafisa 100% % R$ bn 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. 10
• 11.
  Overview of 1Q09Results Financial Performance – Duilio Calciolari, CFO and IR Officer 11
• 12.
  1Q09 Operating Highlights Net Revenues (R$ million) Gross Profit (R$ million) 32.3% 28.5% 59% 40% 542 155 341 110 1Q08 1Q09 1Q08 1Q09 Net Revenues Gross Profit Gross Margin EBITDA (R$ million) Net Income (R$ million) 20.0% 11.7% 18.8% -8% 6.8% 69% 46 108 40 37 64 1Q08 1Q09 1Q08 1Q09 EBITDA EBITDA Margin Net Income Net Margin 12
• 13.
  Strong Pre-Sales PositivelyImpact Backlog of Revenues to Be Recognized R$1,0 billion of results to be recognized (66.6% growth compared to 1Q08) 1Q09 1Q08 4Q08 1Q09 x 1Q08 1Q09 x 4Q08 Sales to be recognized – end of period 3,011 1,726 2,997 74.5% 0.5% Sales tax - 3.65% (110) (63) (109) 74.5% 0.5% Net sales 2.901 1.663 2.888 74,5% 0,5% Cost of units sold to be recognized – end of period (1,898) (1,061) (1,873) 79.0% 1.4% Backlog of results to be recognized 1,003 602 1,015 66.6% -1.1% Backlog margin - yet to be recognized 33.3% 34.9% 33.9% -158 bps -54 bps 13
• 14.
  Gafisa’s Operation - Tenda´sconsolidation as well as marketing and sales efforts impacted our SG&A ratios - As top line growth improves with the significant opportunity in the affordable entry level, we expect these ratios to also improve 1Q09 1Q08 Selling Expenses (R$ 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% 14
• 15.
  Strong Financial Position:consolidated cash position in May over R$1.1 billion. Additionally, we have: 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 contracts R$458 million in contracts in process R$1 billion additional availability Cash-burn rate substantially lower than 4Q08 Proforma 1Q09 With R$600 MM 4Q08 Debenture Total Debt 1,563 2,162 1,552 Total Cash 501 1,101 605 Obligation to Investors 300 300 300 Net Debt & Obligation to Investors 1,362 1,362 1,247 (Net Debt & Obligation to Investors) / (Equity + Minorities) 61.9% 61.9% 59.8% Cash-burn rate 115 360 15
• 16.
  DEBENTURES 2006debenture covenant – net debt could not be over R$ 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): Position as of 2006 Debenture Covenant March 31, 2009 (Total Debt – SFH financing – Cash) / Equity ≤ 0.75x 0.41x (Total Receivables + Inventory of Completed Units) / Total Debt ≥ 3.6x 2.0x 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$1 billion covenant 0.8x 2.2x This covenant is under negotiation with debenture holders and does not breach other financial obligations of the Company. The next assessment date is June,2009 16
• 17.
  SHARE LIQUIDITY Volume (R$ MM) Price (GFSA3) 600 40 400 30 200 20 10 0 0 Feb-06 Aug-06 Sep-06 Dec-06 Aug-07 Dec-07 Aug-08 Nov-06 Feb-07 Nov-07 Feb-08 Sep-08 Nov-08 Feb-09 Jul-06 Jul-07 Jan-08 Jul-08 Jan-09 Jun-06 Jun-07 Jun-08 Apr-06 Oct-06 Apr-07 Oct-07 Oct-08 Apr-09 May-07 May-08 Mar-06 Mar-07 Mar-08 Mar-09 NYSE Listing: Gafisa is the only Brazilian real estate company listed in the United States. Avg. daily volume from Apr 01 of 2008 - Apr 31 of 2009 (R$ MM) Market Cap (R$ MM ) 80 3. 000 60 2. 250 40 1. 500 20 750 0 0 Invest Tur Rodobens Brascan EZ Tec MRV Even CCDI CR2 Agra JHSF PDG Inpar Trisul Lopes Tenda Abyara Cyrela Klabin Rossi Gafisa Tecnisa 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% 17
• 18.
  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% 18
• 19.
  Safe-Harbor Statement We makeforward-looking statements that are subject to risks and uncertainties. These statements are based on the beliefs and assumptions of our management, and on information currently available to us. Forward-looking statements include statements regarding our intent, belief or current expectations or that of our directors or executive officers. Forward-looking statements also include information concerning our possible or assumed future results of operations, as well as statements preceded by, followed by, or that include the words ''believes,'' ''may,'' ''will,'' ''continues,'' ''expects,'‘ ''anticipates,'' ''intends,'' ''plans,'' ''estimates'' or similar expressions. Forward-looking statements are not guarantees of performance. They involve risks, uncertainties and assumptions because they relate to future events and therefore depend on circumstances that may or may not occur. Our future results and shareholder values may differ materially from those expressed in or suggested by these forward-looking statements. Many of the factors that will determine these results and values are beyond our ability to control or predict. 19