3q07 results presentation
TRANSCRIPT
3rd Quarter 2007Conference Call Presentation3rd Quarter 2007
Conference Call Presentation
AgendaAgenda
Heitor CantergianiCEO
Main Highlights
Overall Outlook
Strategy
Leonardo DinizCommercial Director
Launches
Sales
Geographical Expansion
Gerson CohenController
3Q07 Performance
Backlog
Indebtedness
Maria Claudia BiolchiniIR Manager
Share Performance
Guidance 2007-2009
Coverage RSID3
Overall OutlookHeitor CantergianiOverall OutlookHeitor Cantergiani
3Q07 – Main HighlightsNew Launch Guidance for 2008 and 2009
* 2008: R$ 2.35 billion – R$ 2.65 billion* 2009: R$ 2.80 billion – R$ 3.20 billion
9M07 launches allow us to confirm PSV target for 2007* Rossi’s Share = R$ 1.3 billion
Economic Segment* 37,000 units in the pipeline
Geographical Expansion: 5 new markets* Total of 43 cities, 13 states and 56 partners
Lots-development team represents 12% (R$ 1.6 billion) of our land bank.
9M07 Adjusted Net Income totaled R$ 108 million* Adjusted Net Margin of 21.6%
Sales turnover speed (adjusted STS) of 60%
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Gross Margin and EBITDA Margin in line with our guidance for the year* Gross Margin 34.9%* EBITDA Margin 19.2%
Rossi Vendas operating in São Paulo, Porto Alegre and Rio de Janeiro* Rossi Vendas SP was responsible for R$ 31 million of the total contracted sales
PSV, Sales, Geographic ExpansionLeonardo Diniz
PSV, Sales, Geographic ExpansionLeonardo Diniz
Launches (PSV) 3Q07
63%16%
8%13%
44%
15%12%
29%
PSV – Price Breakdown (in units)PSV – Price Breakdown (in units)
7 projects launched in the quarter: São Paulo (1), Sorocaba (1), São Caetano (1), Curitiba (1), Porto Alegre (2), Rio de Janeiro (1)
PSV – Price Breakdown (in R$)PSV – Price Breakdown (in R$)
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Commercial> 500M
350M < x > 500M200M < x > 350M120M < x > 200M
0 < x > 120M
R$ million
626.8434.4
1,579.4
762.2
RossiPartners +44%
+107%
119.9 143.1 156.0 284.6314.5
483.7 606.2
1,294.8
3Q06 3Q07 9M06 9M07
228.9150.7281.1 377.7
814.9
69.7 50.616.0
3Q06 3Q07 9M06 9M07
Contracted Sales 3Q07
Price Breakdown in R$Price Breakdown in R$
22%
5%
46%
7%14% 6%
Price Breakdown in unitsPrice Breakdown in units
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8% 4%
45%10%
29%4%
R$ million
350.8
166.7
428.3
1,043.8
RossiPartners
+110%
+144%
Commercial> 500M
350M < x > 500M200M < x > 350M120M < x > 200M
0 < x > 120M73%
Sizable Land bankLand bank distributed throughout 37 cities, showing less dependence on any specific market
11.9 million m2 in buildable area
Future launches (in units) – 68,083
4 to 5 years in the bag for future launches
Potential PSV (100%): R$ 13.6 billion
Rossi’s Share: R$9.6 billion
PSV originated (Rossi’s Share) 3Q07: R$ 1.0 billion
Acquisition MethodAcquisition Method
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Land bank PSV in R$ MMLand bank PSV in R$ MM
3Q07 Total RossiTotal 13,557 9,557
End of 2Q07 12,142 9,053PSV launched in 2Q07 (627) (484)
Originated 3Q07 2,042 988
End of 3Q07 13,557 9,557
BREAKDOWN
+195%
8,756
12,142
8,673
4,591
RossiPartners
1,1282,266 2,481 3,090 4,000
3,463
6,407 6,275
9,0529,557
3Q06 4Q06 1Q07 2Q07 3Q07
13,557
Cash38%
Swap by Units
42%
Financial Swap20%
Land bank...Potential PSVFocus on low to middle income segment – 75.9% of the residential units priced up to R$ 350K
Land bank 3Q07 - PSV by Regional Office and SegmentsLand bank 3Q07 - PSV by Regional Office and Segments
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SegmentR$
SP Campinas P. Alegre RJ BH North East Total PSV
< 120 K 321,077 500,405 1,209,078 265,150 302,978 139,533 2,738,221 20.20%
120.1 – 200K 159,982 93,565 348,302 492,411 - 936,703 2,030,963 14.98%
200.1 – 350K 423,646 932,908 1,135,699 1,180,598 - 468,178 4,141,029 30.54%
350.1 – 500K 851,552 83,436 194,564 409,765 - - 1,539,317 11.35%
> 500K 843,998 - 56,250 322,680 - 67,717 1,290,645 9.52%
Commercial - 85,598 - - - 85,448 171,046 1.26%
Lots 724,000 922,340 - - - - 1,646,340 12.14%
Total PSV 3,324,255 2,618,252 2,943,893 2,671,202 302,978 1,697,579 13,557,56124.52% 19.31% 21.71% 19.70% 2.23% 12.52%
R$ thousand
Land bank - Breakdown
2% 13%
19%
22%
20%
25%
Rossi should continue focusing on low to middle income segments... Low income DNA.
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Land bank – Price and product BreakdownLand bank – Price and product Breakdown
Land bank (Sep -30-2007) = R$ 13.6 billion
Land bank – Regional BreakdownLand bank – Regional Breakdown
São Paulo (city) & Metro Region accounts for 25% of the total
BHNE
CPSPOASPRJ
20%
15%
31%
11%
1% 12%10%
Commercial> 500M
350M < x > 500M200M < x > 350M120M < x > 200M
0 < x > 120M
Lots
Geographical PresenceLong Term Sustainable Competitive Advantages: Building up Local know-how
Regional Offices (7)Regional Offices (7) Geographical PresenceGeographical Presence
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43 cities in 13 Brazilian states5 new states being prospected56 partnerships
PE
RN
RS
PR
SP
MG
RJ
ES
BA
SC
CE
GO
MS
AMPA MA
AL
AC
RRAP
ROTO
PI
MA
PB
SE
(1) 1980 – São Paulo(2) 1996 – Campinas(3) 1999 – Porto Alegre(4) 2001 – Rio de Janeiro(5) 2006 – Belo Horizonte(6) 2007 – Salvador(7) 2007 – West of São Paulo
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3
4
5
6
1
Operating PerformanceGerson Cohen
Operating PerformanceGerson Cohen
Adjusted Net Income
17.2
31.6
3Q06 3Q07
+ 83%
3Q07 – Financial Highlights I
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18.0%
15.6%
EBITDA EBITDA Margin Adjusted Net Margin
Net Revenue (R$ mm)Net Revenue (R$ mm)
EBITDA (R$ mm)EBITDA (R$ mm) Adjusted Net Income (R$ mm)Adjusted Net Income (R$ mm)
Gross Income (R$ mm)Gross Income (R$ mm)
110.4
175.5
3Q06 3Q07
+ 59%
24.931.8
3Q06 3Q07
+ 28%
18.1%
22.5%
37.7
60.6
3Q06 3Q07
+ 61%
34.1%34.5%
Gross Income Gross Margin
Net Revenue (R$ mm)Net Revenue (R$ mm)
EBITDA (R$ mm)EBITDA (R$ mm) Adjusted Net Income (R$ mm)Adjusted Net Income (R$ mm)
Gross Income (R$ mm)Gross Income (R$ mm)
286.0
501.4
9M06 9M07
+ 75%
28.2
96.4
9M06 9M07
+ 242%
64.3
108.1
9M06 9M07
+ 28%
21.6%
22.5%
83.9
174.8
9M06 9M07
+ 108%
9M07 – Financial Highlights I
19.2%
9.9%
EBITDA EBITDA Margin Adjusted Net Income Adjusted Net Margin
34.9%
29.3%
Gross Income Gross Margin
27%
64%
9%
3Q07 – Financial Highlights IIUnearned Result (R$ mm)Unearned Result (R$ mm)
96.2%
0.3% 3.5%
Total Debt: R$ 481.0 millionTotal Debt: R$ 481.0 million
Cash Position: R$ 394.0 millionCash Position: R$ 394.0 million
Cash and banksShort Term InvestmentsLong Term Investments
Net Debt: R$ 86.9 millionNet Debt: R$ 86.9 million
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Additional FundingIssue and Placement of the 1st trenche of Debentures – R$ 300MM – from a Total of
R$ 600MM
Unearned Result Backlog Gross Margin
255.2307.2
2Q07 3Q07
+ 20%
36.0%
34.4%
Short Term Construction FinancingDebenturesLong Term Construction Financing
GuidanceMaria Claudia Biolchini
GuidanceMaria Claudia Biolchini
Guidance 2007-2008Scale in revenues to bring bottom line benefits is generating operating gains.
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Rossi’s Share in R$ MM 2007E 9M07 2008 2008E (revised) 2009E
Net Revenue 600 - 700 501 850 - 950 tba tba
Launches (PSV) 1,600 – 1,800 1,295 1,920 – 2,160 2,350 – 2,650
Contracted Sales 1,250 – 1,400 815 1,150 – 1,265 tba tba
Gross Margin % 34 - 36 34.9% 34 - 36 34 - 36 34 - 36
EBITDA Margin % 18 - 20 19.2% 20 - 22 20 - 22 tba
2,800 – 3,200
Share Performance RSID3
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RSID3
IBOVESPA
RSID3 x IbovespaRSID3 x Ibovespa
Average Daily Volume2006: USD 6.0 MM (525M shares)2007: USD 12.0 MM (506M shares)
Average Daily Volume2006: USD 6.0 MM (525M shares)2007: USD 12.0 MM (506M shares)
RSID3Since the Offering (Feb-2006): + 117%
in 2007: + 99%
RSID3Since the Offering (Feb-2006): + 117%
in 2007: + 99%
50
75
100
125
150
175
200
225
250
7/ap
r/06
1/ju
n/06
24/ju
l/06
13/s
ep/0
66/
nov/
062/
jan/
0728
/feb/
0720
/apr
/07
13/ju
n/07
6/au
g/07
26/s
ep/0
712
/nov
/07
Coverage – RSID3Rossi is currently covered by 10 institutions.... 4 more to initiate in the near future
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Cobertura AtualCobertura Atual
Guilherme Vilazante [email protected] Lee [email protected] Telles [email protected] Quiroga [email protected] Firetti [email protected] Suzaki [email protected] Huerta [email protected] Agarwal [email protected]
Bulltick Rafael Pinho [email protected] Milman [email protected] Fernandez [email protected]
BB Investimentos Antonio Emilio Ruiz [email protected] Carlos Macedo [email protected]
Carlos Peyrelongue [email protected] Miguel [email protected] McGoey [email protected] Dorea [email protected]
Deutsche Bank
Fator Corretora
Goldman Sachs
Merrill Lynch
Santander
JP Morgan
On the wayInstitution Analysts Contacts
Citibank
Itaú
UBS Pactual
Bradesco
Credit Suisse
Investor Relations Team
www.rossiresidencial.com.br
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Sérgio RossiInvestor Relations [email protected]+ 55 11 3759-7232
Maria Claudia BiolchiniInvestor Relations [email protected]+ 55 11 3759-7516
Notice
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This material is a presentation of general background information about Rossi Residencial S.A. (“Rossi”) as of the date of this presentation. Information contained herein has been summarized and does not purport to be complete. This presentation shall not be considered an advice of investment by potential investors. This presentation is strictly confidential and may not be disclosed to any third person. There are no representations or warranties, express or implied, regarding the accuracy, fairness, or completeness of the information presented herein, which shall not support any decision of investment.
This presentation contains statements and information that are forward-looking pursuant section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities and Exchange Act of 1934. Such forward-looking statements and information are only predictions and cannot assure Rossi´s future performance. Investors have been cautioned that any such forward-looking statements and information are subject to many risks anduncertainties relating to the operations and business of Rossi and its subsidiaries. As a result of such risks and uncertainties, the actual results of Rossi and its subsidiaries may be materially different from any future result expressed or implied in the forward-looking statement or information contained herein.
Although Rossi believes that the expectations and assumptions reflected in the forward-looking statements and information are reasonable and have been based on data currently available to its officers and directores, Rossi cannot guarantee future results or events. Rossi does not assume the commitment of update any of the forward-looking statement of information.
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