Santander 7th Annual Brazil Conference Campos do Jordão, Brazil, August 21-22th, 2006 Second Quarter 2006 Launches Belle Vue – Porto Alegre Paço das Águas – São Paulo Vistta Ibirapuera – São Paulo Beach Park Living - Fortaleza Blue Land – Rio de Janeiro
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Santander 7th Annual Brazil ConferenceCampos do Jordão, Brazil, August 21-22th, 2006
Second Quarter 2006 Launches
Belle Vue – Porto Alegre Paço das Águas – São Paulo Vistta Ibirapuera – São Paulo Beach Park Living - Fortaleza
Blue Land – Rio de Janeiro
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We make forward-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.
“Safe-Harbor” Statement
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Agenda
2Q06 Update 3
What’s Going On the Brazilian Housing Industry? 15
Page
Why Gafisa is Better Prepared to Take Advantage of This Market? 20
Appendix 34
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2Q06: Gafisa Reports 151% Growth in Launches and 168% in Pre-Sales
% Mortgage / Total Pre-sales % Mortgage / Total Pre-sales
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High Fragmentation is also an opportunity
Market Share in São Paulo (2005)
Well capitalized companies will benefitfrom increasing demand
Market Share in Rio de Janeiro (2005)
Source: EMBRAESP and SECOVI
Others80%
5%
Cyrela Brazil Realty8%
Rossi Residencial2%
Company S.A.3%
Tecnisa2%
Source: ADEMI
Others42%
CHL9%
Carmo Calçada11%
Agenco13%
RJZ Cyrela12%
13%
Units (#)
Launchings (R$ bi)
2005 04-05Growth
33,748
9.0 19%
24% Units (#)
Launchings (R$ bi)
2005 04-05Growth
8,832
3.0 2%
23%
Gafisa´s strong brand and market positioning are a competitive advantage against the many family-owned and non-professional competitors
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Agenda
2Q06 Update 3
What’s Going On the Brazilian Housing Industry? 15
Page
Why Gafisa is Better Prepared to Take Advantage of This Market? 20
Appendix 34
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Well Defined Strategy
Create the leading residential development company in Brazil based upon sales, profitability and quality
Strong revenue growth
Focus on high return
opportunities
Maintain debt policy of
40% - 60% net debt / equity
Continued geographic expansion
Our Strategy
Maintain land bank of
2-3 years of future sales
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Gafisa: Premier Growth Opportunity
Professional Managementand
Established Organization
Industry Leadership and Strong Brand Recognition
GeographicDiversification
World-class Shareholdersand the Highest Standards of Corporate Governance
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Led by GP and EI, Gafisa is the only homebuilder with an institutional shareholder base …
World-Class Shareholders and Corporate Governance
… and commitment to superior corporate governance standards
27.4%21.8%
Free Float
50.8%
Current Shareholder Structure 1
► Proven track record in the Brazilian capital markets
– Submarino, ALL, Cemar, among others
► A leading investor in real estate companies outside of the U.S.
► Portfolio includes Homex, Mexico’s leading homebuilder
► Founded by Sam Zell
► Novo Mercado listing
► 100% tag along rights
► US GAAP
► 2 independent board
members
► Audit Committee
Superior Governance Standards
Note:1 Excludes treasury stocks
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A Diverse Product Mix Positions Gafisa to Take Advantage of Positive Environment
100 to 400100 to 500150 to 300up to 100# of Units
28%
2%
R$ 1,800 to R$ 2,000
100% CEF (directly to buyer)
R$ 32,000 to R$ 62,000
R$ 70k to 130K
45 to 65 sq.m
Affordable Entry Level Land SubdivisionMiddle and Mid-HighHigh-End
31%
62%
R$ 2,000 to R$ 3,600
Commercial Banks and CEF
R$ 70,000 to R$150,000
R$ 150k to 400K
70 to 150 sq.m
10%19%% of 2006 Launches²
44%
R$ 150 to R$ 800
Provided by Gafisa
Diverse
Up to 300k
100 to 1,000 sq.m
37%
Above R$3,600
Provided by Gafisa
Above R$150,000
Above 400K
100 to 500 sq.m
Typical Project Margin
Average Price sq.m
Financing
Household Income¹
Price Range
Size
Notes:¹ Annual household income. ² Gafisa has commercial buildings which accounted for the remaining 7% of the 2006 Launches
Lorian - SPBlue -RJ Side Park - SPThe Gold-SP
Gafisaeographical expansion offers further growth potential in the medium term
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► Main Characteristics:3% of Brazilian population 5% of Brazilian GDPOne of the highest GDP per capita in Brazil (38% higher than Brazilian average)Around 2 million homes (~ 4% of Brazil`s total)Market Size in 2005: R$3 billion
► Growth Opportunities:Projects oriented to middle and high-income in Barra da Tijuca and Jacarepaguá, fastest-growing region in the city (70% of Rio’s market)Diversifying around suburban areas of Rio de Janeiro State
► Main Characteristics:6% of Brazilian population10% of Brazilian GDP One of the highest GDP per capita in Brazil (72% higher than Brazilian average)Over 4 million homes (~ 8% of Brazil's Total)Market Size in 2005: R$9 billion
► Growth Opportunities:Projects targeted to the middle income bracketDespite the lower demand for luxury housing, there are several opportunities for innovative and differentiated projectsHuge unmet demand for Low Income projects due to lack of a regulatory framework
Gafisa has a Leadership Position in Brazil’s Main Markets
Sao Paulo Rio de Janeiro
Sao Paulo and Rio de Janeiro represent, respectively, 36% and 32% of Gafisa’s Launchings
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► Why expand through JVs with local partners?Develop local partnerships to leverage regional market knowledge, legal skills, risk mitigation and entry barriers
► Growth Opportunities Multiple drivers of other markets mitigate growth riskSmall and poorly capitalized competitorsBetter marginsBusiness Owners Organizational Structure provide a totally focused local management integrated and supported by Gafisa Corporate Unit in Sao Paulo
Present in 12 states, Gafisa is one of the most geographically diverse builders in Brazil
Although SP and RJ are still core markets, “New Markets”already represents 32% of Gafisa’s Launches
Recently signed partnerships
► How Gafisa is differentiated in “New Markets”?Strength of its brand and its track record in São Paulo and Rio de Janeiro
Innovative project concepts
Differentiated project designs
Delivery of products on time and demand-aligned payment conditions
Aggressive marketing strategy
Geographical expansion offers further growth potential in the medium term
North • Rapidly Expanding Export Platform• Brazil’s New Agricultural Frontier
Mid-west• High Dependant on the Agricultural Business South
• Nation’s Highest Income Per Capita
Northeast• Second Home, Foreign Investments
Gafisa’s National Reach Drivers of Growth
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A superior organizational structure and professional management yield results …
Professional Management and Superior Organizational Structure
… and make Gafisa a scalable business platform
A unique business model in the industry oriented towards maximizing shareholder profitability
Gafisa People and its culture
Professional, experienced and motivated management focused on value creation
Committed to develop leaders
4 out of 7 directors joined the company as
interns
Results driven culture
40% to 60% of compensation
linked to aggressive
targets
In depth industry
knowledge
Management, on average, with more than 14
years of experience
Ownership Culture
More than 25 managers hold
3.6% of the company
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Efficient and Scalable Organizational Structure Designed to Sustain Growth