1
Institutional Presentation
August 2011
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
(“LPS”) as of June 30th, 2011. 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 LPS 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 LPS 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.
LPS believes that based on information currently available to LPS management, the expectations and
assumptions reflected in the forward-looking statements are reasonable. Lastly, LPS expressly refuses any duty to
update any of the forward-looking statements contained herein.
2
Investment Highlights
3
Highlights 2011
Awards
Considered the main award of the real estate industry in Brazil;
Lopes won The Top Imobiliário aditions, since 1993.
Top Imobiliário Award
Ranking Valor 1000
Listed by Valor Econômico as one of the 1000 largest business groups in Brazil; Greater emphasis on the 20 th largest net margin between all groups; 8th place in value generation between service companies.
Agressive strategies of M&A, expanding business into other regions of the country;
Lopes was considered the largest
company in real estate marketing and consulting in Brazil, in the last five years.
IG/ Insper Award
Achievements
Mr. Francisco Lopes
initiates its activities
intermediating
properties
1935
40 s
50 s
60 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 16th consecutive
“Top Imobiliário”
Lopes‟ IPO
Lopes starts its geographic expansion
process
Lopes‟ website become leader on real
state market
Joint Venture with Itaú Bank in order to
create CrediPronto, our mortgage
company.
Lopes‟ follow-on
The company‟s first
logo
Becomes reference in real
estate launchings and
presents its new logo
The Brokerage Market Has No Other Company With Our History
and Track Record
5
Simple and Focused Value Added
Business Model
Main Distribution Channel in the Industry with a
National Footprint
Low Risk Business with a Diversified
Client Base : Cash Generator Company
Already scaled down to face new market conditions
Unmatched Scale and Reach
Experienced
Management Team and Outstanding
Track Record
Investment Highlights
6
7
Joint Venture with Banco Itaú to
provide mortgage loans
Low, mid and high-income segments
Mortgage Loan Primary Market Secondary Market
Focus on secondary market, with a
unique model of own stores and a
network of licensed brokers
Growth through acquisitions
LPS Brasil: Unique Business Platform
+
7
8
2T10 3T10 4T10 1T11 2T11
BRAZIL 2.5% 2.7% 2.5% 2.4% 2.4%
Primary
SP 3.0% 3.2% 3.1% 2.9% 3.0%
Habitcasa 1.8% 1.9% 1.9% 1.9% 1.9%
RJ 2.2% 2.1% 2.1% 2.2% 2.0%
Other markets
2.1% 2.3% 2.1% 2.1% 2.1%
Secondary
SP 2.5% 2.4% 2.3% 1.9% 2.4%
RJ - - 2.3% 2.4% 2.5%
Other markets
- - - 2.1% 2.4%
Lopes Net Commission
9
Virtuous Cycle of the Business Model Creating Strong Barriers to Entry
Strong Established Base
Leading, nationally recognized brand
Present in 12 Brazilian states and in the Federal
District
Extensive distribution channel
Database with more than 1.8 million clients
More than 350 homebuilder clients
Leadership and Wide Range of Products Indisputable Sales Performance
Speed of sales of 25% in 2Q11,
and 51% for Habitcasa
R$4.9 billion in contracted sales in
2Q11.
Most visited website in the real
estate sector: near 9 million
visitors in the first half of 2011.
Retention of Talent
Largest sales force: over 13,000
independent brokers
Attracts and maintains its sales force
Leader in the primary market
One-stop-shop: unique and
complete solution for the client
: unique platform to
develop the secondary market
: partnership with one
of the largest retail banks in the
world, Itaú Unibanco
9
Institutional Website
10
Visits on www.lopes.com.br
Source: Google Analytics,
The most visited website in the real
estate market
Strong investment in online media
Increased generation of
Leads
Higher sales conversion
• 9 million unique accesses in the
first half of 2011
• Over 600 launches and more than
40 thousand units in the secondary
market
• Mobile version compatible with
over 5 thousand kinds of cell phones
• First brokerage company to launch
an App for iPad
• Leader in presence in social
networks
Competitive Advantage
Competitive Advantage: A single, integrated and solid Company
“Lopes” culture in all
business units of different
states
National Integration
of Systems
One single brand,
recognized by the
market
Identity that stands
Lopes out from the
competitors
11
LPS Brasil‟s Market Mix
53% 52% 54% 49% 50% 46% 48% 44%
5% 6% 5% 5%
11% 19% 18% 24%
16% 14% 14% 17%
9%
12% 9% 8%
7% 12% 10% 11% 12%
10% 11% 12% 6% 6% 6% 6% 6%
5% 2% 2%
13% 10% 11% 13% 12% 8% 12% 10%
3Q09 4Q09 1Q10 2Q10 3Q10 4Q10 1Q11 2Q11
São Paulo
Rio de Janeiro**
Brasília
South
Northeast
Other*
*Other: Ceará, Estpírito Santo, Minas Gerais, Goiás and the city of Campinas 12
LPS Brasil in the Primary Market
13
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 agreements
Over 350 Clients
1,847,522 prospects
included in our data base
Client-Developers Client-Buyers
Ho
w d
o w
e d
o
bu
sin
ess
?
Ho
w d
o w
e m
ak
e m
on
ey
?2
, 3
$ 0.19
$ 0.07
$ 2.14
$ 100
$ 10
Total Price
per Unit
Down-
payment
Gross
Commission
$ 0.85
$ 1.15
Agents +
Managers
Re
ve
nu
e R
ec
og
nitio
n
$ 4.40 ²
Developer
1 Data until Dec-10 2 Data from the LTM
$ 2.00
$ 2.40
Net Commission Premium Contract Advisory Fee
Simple and Focused Business Model…
14
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 Product Meeting Buyers‟
“Wants and Needs”
Develops Marketing Campaign
Optimizes Media
Negotiations
Coordinates
Product
Launching
Events
Individual Sales Strategy
Created to Each Product
Coordinates Product
Launching
Events
15
Lopes is Growing Nationwide
SOUTHEAST REGION São Paulo – Beginning of operations in 1935. Acquisition of 60% of Capucci
&Bauer, in October 2007, for R$9 million (7.1x P/E 2008) and an earn-out
payment.
Rio de Janeiro – Entry by greenfield operation, with beginning of operations in
July 2006, with LCI-RJ. . Lopes acquires permanently an additional 10% stake
of Patrimóvel, in July 2010, and more 31% in october 2010 (51% total).
Espírito Santo – Acquisition of 60% of Actual, in July 2007, for R$5.76 million
(7.0x P/E 2008) and an earn-out payment.
Minas Gerais – Entry by greenfield operation with beginning of operations in
February 2008.
SOUTHERN REGION States of Rio Grande do Sul, Santa Catarina and Paraná – Acquisition of 75% of
Dirani, in May 2007, for R$15.1 million (7.5x P/E 2008) and two ear-out
payments. In July 2008, Lopes acquired the 25% left by the call/put
mechanism.
MIDDLE WEST REGION Federal District – Acquisition of 51% of Royal, in November 2007, for R$12 million (9.0x P/E 2008) and an earn-out payment.
Goiás - Greenfield operation with beginning of operations in August 2008.
NORTHEAST REGION Bahia - Greenfield operation with beginning of operations in October 2007.
Pernambuco – Acquisition of 60% of Sérgio Miranda, in August 2007, for R$ 3
million (10.0x P/E 2008) and an earn-out payment. In September 2009, Lopes
acquired the 40% left by the call/put mechanism. In 2010, there was a transfer
to LPS Fortaleza –of 100% (one hundred percent) of the capital stock of LPS Pernambuco.
Ceará e Rio Grande do Norte – Acquisition of 60% of Immobilis, in January
2008, for R$2.4 million (10.0x P/E 2008) and an earn-out payment.
Lopes tracks developers‟ regional movements, consolidates its
position as the largest consulting and sales player
PR
RJ
BA
SP
RS
ES
SC
PE
MG
DF
CE
GO
RN
Source: Lopes RI 16
HIGH
MEDIUM-HIGH
MEDIUM
ECONOMIC
BUSINESS UNITS
Sales Expertise in all Market Segments
Jundiaí/ SP
42 / 421 m²
Barão de Teffé – Jun/11
111 un. – R$ 6,550/m²
Local
Usable Area
Sales
Valinhos/ SP
44 / 64 m2
Mais Campos Salles – May/11
372 un. – R$ 2,800/m²
Location
Usable Area
Sales
Pari/ SP
55 / 75 m²
Aquarella Pari – Apr/11
592 un. – R$ 3,930/m²
Location
Usable Area
Sales
Vila Madalena/ SP
70 / 174 m2
SoulMada – Jun/ 11
50 un. – R$ 9,530/m²
Location
Usable Area
Sales
Itaim/ SP
35 / 974 m²
F.L. – May/11
329un. – R$12,500/m²
Location
Usable Area
Sales
91% sold.
Developer : Helbor
CASE
98% sold.
Developer : Living
CASE
100% sold.
Developer : Agre
CASE
98% sold.
Developer : PDG
CASE
100% sold.
Developer: Stan
CASE
17
LPS Brasil in the Low Income Segment
18
HABITCASA: Focus on Low Income Segment
Focus on Low Income Segment
Units up to R$ 300 thousand
The Habitcasa brand is applied in all Lopes‟ markets
19
Habitcasa Stands Up as the Biggest Player in sales in the Low
Income Segment
Over 3,000 units sold
in the 1H11 Average Price in the
2Q11 of R$175 thousand
51% Sales Speed
In the 2Q11
Sales in the 1H11
increased 38% when
compared to the 1H10
Only Real State
Brokerage Company
specialized on the low
income segment, not
only in sales, but also
in advisory
In 2009, Habitcasa became Caixa‟s
correspondent
20
Units Sold
Sales by Income Segment – Primary and Secondary Markets
Contracted Sales
21
13%
39% 27%
22%
34%
43%
15%
8%
Total Contracted Sales = R$ 4,957 million
34%
44%
17%
5%
10%
35%
23%
32%
2Q10
2Q10
2Q11
2Q11
Total units sold = 17,119
Increase in the Potential Demand
Maturity in years
10 15 20 25 30
12% 13 11 10 10 9
11% 13 10 9 9 9
10% 12 10 9 8 8
9% 12 9 8 8 7
8% 11 9 8 7 7
7% 11 8 7 6 6
6% 10 8 7 6 6
5% 10 7 6 5 5
Maturity in years
10 15 20 25 30
12% 1,377 1,152 1,057 1,011 987
11% 1,322 1,091 991 941 914
10% 1,269 1,032 926 872 842
9% 1,216 974 864 806 772
8% 1,165 917 803 741 704
7% 1,115 863 744 679 639
6% 1,066 810 688 619 576
5% 1,018 759 634 561 515
Unit Value
R$120,000
Mortgage
R$96,000
30% of income
commitment 80% of the total value
financed
In Minimum Wages Monthly Payment (R$)
Inte
rest
Ta
x (
%)
Inte
rest
Ta
x (
%)
22
Better Economic Situation of the Low Income Segment…
Monthly Income (Millions of
Families) 2007 2008
Untill R$1,000 31.7 53% 29.1 31%
From R$1,000 to R$2,000 15.5 26% 27.6 29%
From R$2,000 to R$4,000 8.4 14% 21.8 23%
From R$4,000 to R$8,000 3.3 5% 11 12%
From R$8,000 to R$16,000 1.1 2% 4.3 5%
From R$16,000 to R$32,000 0.3 0% 1.3 1%
More than R$32,000 0 0% 0.3 0%
TOTAL 60.3 100% 95.4 100%
25.5
7.5
1
34
Government
Budget
FGTS BNDES TOTAL
“Minha Casa, Minha Vida” Funds
32.5
36.5 37.4 38.0
40.0
47.0
52.0
1992 1995 1998 2001 2004 2007 2008
% of the population with monthly income between
R$1,064 and R$4,561 (program‟s target population)
Source: “Minha Casa, Minha Vida” Program
Source: FGV Source: IBGE, FGV, Ernst & Young
23
62.2
9.5
71.7
Government
Budget
FGTS TOTAL
“Minha Casa, Minha Vida 2” Funds
2.2 3 4.99.3
18.425.2
3.8 3.95.5
7
6.9
10.2
2003 2004 2005 2006 2007 Savings untill
Oct 2008 FGTS
untill Nov 2008
Financed with FGTS' Funds Financed with Savings' Funds
Housing Credit (R$ billions)
Housing
(„000)
Total of
houses
New
houses
formed
New houses
financed
% of new
houses
financed
2002 48,035 1,530 83 5%
2003 49,710 1,675 104 6%
2004 51,752 2,042 112 5%
2005 53,114 1,362 101 7%
2006 56,610 1,496 151 10%
2007 56,343 1,733 166 10%
... and also Better Supply of Mortgages
Source: ABECIP, Central Bank of Brazil, CEF e FGV
Source: IBGE, BC
24
Minha Casa Minha Vida
Brazilian Government will dispose of R$34 bi.
In the State of São Paulo 183,995 units will be built.
Source: Lopes‟ Market Intelligence
São Paulo‟s families
(3.4 million of families)
41% have a monthly family income between 3 and 10 minimum wages, with “Minha Casa, Minha Vida” this
families will become potential buyers.
It is estimated that there is a 140
thousand units demand in the city of
São Paulo inside the
“Minha Casa, Minha Vida” program .
10% has purchase intention for the next 12 months
(1.4 million of families)
Premise: with the federal government subsidy, the decrease of interest rates and more extended mortgages terms, the minimum family income to acquire a R$100 thousand house became 3 minimum wages, not 6 minimum wages as before.
25
LPS Brasil in the Secondary Market
26
Pronto!
27
Pronto has 246 stores in 11 States + Federal District : 46 owned stores and 200 licensed brokers
SOUTHEAST REGION
São Paulo – Acquisition of 51% of VNC, in July 2010, for R$7.1
million (R$ R$1,8 million + R$0,3 million of investiments + R$5,2
million of earn out ).
Acquisition of 51% of Plus Imóveis, in August 2010, for R$11.7
million (R$4.7 million + R$7.0 million of earn out).
Acquisition of 51% of Maber, in September 2010, for R$17.3
million (R$6.0 million + R$11.3 million of earn out).
Acquisition of 55% of Local, in December 2010, for R$25.6
million (R$10.0 million + R$15.6 million of earnout)
Acquisition of 60% of Erwin Maack, in March 2011, for R$8.4
million (R$2.9 million + R$5.5 million of earn out)
Acquisition of 51% of Condessa in July 2011, for R$4.9 million
(R$1.9 million + R$3 million of earn out).
Rio de Janeiro – Acquisition of 51% of Self Imóveis, in July
2010, for R$ 2,6 million (R$900 thousand + R$1,7 million of earn
out)
FEDERAL DISTRICT :
Acquisition of 51% of AçãoDall’Oca in April 2011, for R$12.2 million (R$3 million + R$9.2 million of earn out).
SOUTH REGION
Rio Grande do Sul – Acquisition of 51% of Ducati, in
December 2010 forR$15,5 million (R$5.3 million + R$10.2 million
of earnout).
Paraná – Acquisition of 60% of Thá, in February 2011, for
R$20.9 million (R$7.4 million + R$13.6 million of earnout).
28
Present in 11 states and the Federal District
– Covers 91% of the Brazilian GDP
– 46 own stores
– 200 licensed brokers
– Strong presence in São Paulo and Rio de Janeiro
Unique one-stop-shop business model
Solid client base
Strong internet presence
Diversified products in the portfolio
Unique Platform Poised for Growth Well Defined Acquisition Model with a Successful Track
Record
Appreciation and alignment of interests
– Earn-out
– 51% ownership stake
Natural Consolidator
Potential synergies:
– Scale and reach: network effect
– Access to mortgage financing
– Expertise of LPS Brasil management
Pronto!: A Natural Consolidator
Acquisition strategy:
– Companies with expertise in their regional markets
– Companies with limited access to capital
– Well positioned in relevant markets
– Widespread network
Successful acquisitions through the years
– 10 acquisitions since July focused on the secondary market
– Benchmark for future partners
– Accretion
28
Strengthening of mortgage origination and other related services.
Leadership position
in their respective
markets
Management
Excellence High Value Brands
Joint Venture Lopes Itaú
Lopes and Itaú created the first and biggest pure mortgage company of Brazil.
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
29
30
Differentiated Model: One-Stop-Shop
Winning Model
Secondary Market: a significant potential for origination
46 own stores and 200 licensed real estate brokers in 11
states and the Federal District
Selective acquisitions to replicate the successful formula
used in the primary market
30% of Pronto!‟s contracted sales are financed by
Credipronto!
Distinctive channel for clients in the secondary market
Over R$1.3 billion in financing
Incipient market in Brazil with huge expansion potential
59% of CrediPronto! transactions are originated through
Pronto!
Use of LPS Brasil‟s platform and significant reduction in
CAPEX requirement
Focus
Relevance
Growth
Potential
Synergies
30
31
437
1,341
Jun/10 Jun/11
CrediPronto!
In 2Q11, CrediPronto! financed R$327,6 million, growing 125% when compared to 2Q10.
146
328
2Q10 2Q11
125%
31
207%
Financed Volume
(R$ MM) (R$ MM)
Accumulated Volume Sold*
*It doesn’t include amortization.
Mortgages Portfolio
CrediPronto!
The Average Portfolio Balance in 2Q11 was R$1,063 million.
(R$ MM)
178
1,162
Opening portfolio balance Jan/10 Ending portfolio balance Jun/11
553%
32
217 247 291
331 385
437 474
529 591
654 727
804 854
928 1,013
1,113
1,219
1,340
100
300
500
700
900
1.100
1.300
1.500
Accumulated Sales Volume *
CrediPronto!
(R$ MM)
33
CrediPronto! financed over R$121 million in June 2011.
*Not including amortization.
11%
34
Credipronto!: Unique Partnership to Capture Mortgage Loan Market Potential
Evolution of Origination (base 100 = Jan-10)1
Business Highlights
In 2 years, it has already reached over 6% of market share
in the private mortgage loan market (excluding Caixa)1
Profit Sharing with limited credit risk
Leverage on LPS Brasil‟s points of sale
Differentiated process of approval and release of funds
Unprecedented credit in the market
Innovative Real Estate Financing Process
Notes: 1 ABECIP (as of December 30th, 2010) and Company. Ranking based on June/2011 origination 2 Excluding Caixa 3 Bacen
+ Market
Leader
Largest Private Bank
in Brazil
High Growth Potential – Real Estate Financing equals only 4% of Brazilian GDP2
Ranking of Real Estate Financing 2T11 (R$ mm)¹
Credit Analysis Assessment ofthe Property
Legal Analysis Issuance of theContract
Release ofResources
24 hoursUntil 3
workingdays
2 working
days
3 working
days
5 working
days
Efficiency in Release of Credit
34
5.625
2.010
956 905 797 438
99 51 16 14
327
6% de Market Share ² 16% of Itau
Total origination 2T11: 10.9 billion 1H11: 19.7 billion
1,4% 1,9% 1,7%
Market Share CrediPronto!
2,4% 2,4%
100
168 177
245 241
376
125 145 147 144
179
1T10 2T10 3T10 4T10 1T11 2T11
Credipronto! Mercado
3%
Brazilian Real Estate Market
35
36
Growth 2007 - 2030
Significant Creation of Demand
Demographic Bonus Population Pyramid (millions of people)
Expansion of Class C (% of the population) Number of Families by Income Segment (millions)
40%
60%
80%
100%
1950 1960 1970 1980 1990 2000 2010 2020 2030 2040 2050
Economically active population = 15 – 64 year-old
Dependence Index
(8%) 78% 160% 233% 291% 433%
2003
2008
11%
49%
24%
16%
Classes A and B Class C Class D Class E
8%
37%
27%
28%
Source: IBGE, Bird, Febraban and FGV
31.7
15.5
8.4
3.3 1.1 0.3
29.1 27.6
21.8
11
4.3 1.6
Up to R$1k
R$1k to
R$2k
R$2k to
R$4k
R$4k to
R$8k
R$8k to
R$16k
Above
R$ 16k
2007A
2030E
36
106% 104%
88% 84%
81%
68% 65%
48%
42% 40%
38% 35%
22% 22% 19%
15% 11% 11% 10%
6% 5% 5% 5% 4% 3% 3% 2% 2% 2% 1% 1%
Source: Goldman Sachs, Abecip, BCB
Mortgage Market
Mortgage Market as a % of GDP
37
38
Growth Drivers
Housing deficit
– 7.2 million houses (2009)
Incipient mortgage loan market
Declining interest rates
Rising employees‟ income
Growing availability of long-term funding
Increasing secondary market financing
Increasing family turnover
Market Potential for Real Estate Financing
Source: Bacen and ABECIP Notes: 1 Data from 2006, except for Brazil (2009) 2 FGV’s Center for Social Studies, 2010 3 Represents the number of times a family moves to a different house during their lifetime. Source: Credit Suisse
Mortgage Loan Access (% by Social Class)2
7.7%
5.0%
3.0%
1.7%
Classes A and B Class C Class D Class E
4.0x
1.8x
9.0 – 10.0x
G-7 Mexico Brazil
Family Turnover3
5.4
6.7
7.9
6.3 5.8
1991 2000 2006 2007 2008
Quantitative Housing Shortage (millions of homes)
38
39
2,545
4,873
9.370 8.658
15.600
2006 2007 2008 2009 2010
33.3
37.2
29.2
2007 2008 2009 2010E
Lopes: Leadership and Growth
Primary Market: Leadership1 in an Expanding Market
Second Growth Cycle
Notes: 1 Includes the acquisition of Patrimóvel 2 US$3.4 billion raised in 9 equity offerings and US$7.0 billion issued in debt. Only includes public issuances. Source: Bloomberg 3 Earnings release: Brookfield, CCDI, CR2, Cyrela, Direcional, EVEN, EZTEC, Gafisa, Helbor, Inpar, JHSF, João Fortes, MRV, PDG, Rodobens, Rossi, Tecnisa and Trisul 4 Annualized, considers that contracted sales launched in the first half are equal to 40% of contracted sales launched per year
Highly capitalized homebuilders
– US$10.4 billion raised since 2009²
– Developments launched in the first wave have
completed their cycles, generating cash for further
investments in the market
Lopes Contracted Sales: Significant Growth (R$ mm)
Lopes‟ scale and reach result in extensive network and
sales capacity: essential for distributing units launched
Unique database with more than 1.8 million clients
Over 350 homebuilder clients
Speed of sales of 25% in 2Q11, and 51% for Habitcasa
Launched PSV – Listed Companies (R$ mm)3
44.84
39
40
15,1 16,0 17,7
24,4 22,8
17,4
24,9
Number of Launches - SP
GVS Launched (R$ bn) - SP
Units Launched („000) - SP
2010 2007 2006 1997 1996 2008
Launches Metropolitan Region of São Paulo
Source: Lopes’ Market Intelligence
2009
509
377 341
467 458
538 548 509
442 478
574 548
494
574
1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010
70
33 35
40 35 34
37
31 36 38
68 70
59
76
1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010
40
4010
2092
2380
2220 1603
3663
Year Units Lauched Units Sold
2008 34.500 32.800 2009 30.100 35.800
2010 37.300 35.870 05M11 10.830 8.960
Units Launched
Units Sold
Average (Units Sold/Launched) = 0,87
Average (Units Sold/Launched) = 1,31
41
Sales Speed Metropolitan Region of São Paulo
Units Launched and Sold SP Capital
R$/m2
SPMR Real Estate Market Overview – Prices
Source: EMBRAESP
Nominal
INCC Adjusted
Evolution of Average Launches‟ Prices in SP
R$/m2
42
1360 1370 1550 1620 1740
1930 2230
2470
2850 2890 3050 3000
3200 3480
4470
19
96
19
97
19
98
19
99
20
00
20
01
20
02
20
03
20
04
20
05
20
06
20
07
20
08
20
09
20
10
4120 3880
4180 4140 4070 4180 4390
4190 4340
4040 4040 3770 3680 3730
4570
19
96
19
97
19
98
19
99
20
00
20
01
20
02
20
03
20
04
20
05
20
06
20
07
20
08
20
09
20
10
Factors that Sustain the Growth in the Real State Market
Positive Economic Trend
Brazil is Latin America’s biggest economy
and presents economic, political and social stability;
Positive economic fundaments:
1. Country-risk in minimum historical level
2. Inflation under control
3. Extern debt at lower levels
4. Decreasing of the unemployment tax
Real State Sector Development
Consumer’s buying intention increase;
Technology achieved in both sides;
Products with more sophisticated
attributes for the middle income
segment;
Technology in the low income segment
construction; and
Development of new
Brazilian markets.
Housing Deficit
Estimated deficit of 7.2MM de houses;
Bad quality housing for middle and low
income segments.
Financing Availability
Smaller Taxes, longer terms;
SFH and FGTS limit increase;
Higher participation of the private
sector; and
In Brazil, the mortgages represent
15-20% of the total credit, smaller than in
other countries (70%).
43
Lopes‟ Confidence Index
44
118,0
143,1
100,0
82,0
129,2
116,1
Expectation Index Lopes' Confidence Index Present Situation Index
(base: jan/2009=100)
Source: Lopes Market Intelligence
Lopes‟ Confidence Index (LCI) – August/11
Lopes is the first company to create a Real Estate Consumer Confidence Index.
45
Lopes‟ Confidence Index intend to measure clients confidence, so Lopes can follow and anticipate, in the short term,
housing purchase tendency.
The sample has 582 interviews, with Grande São Paulo resident clients, which contacted Lopes in the last 3 months and
are interested in purchasing a new home.
Lopes‟ Confidence Index (LCI)
August/11
(base: jan/2009=100)
Source: Lopes Market Intelligence
Present Purchase Intention Growth – August/11
46
Evolution of the current intention of purchasing property
Simple Answer
Economic Average Standard High Standard
For the housing market are considered the positives attributes of the intended
purchase of property High and Average that is mentioned by the prospects
during the interview .
High and
Average
Low 50%
75%76%
26% 25%
39%
74%
71%
61%
26%29%
44%
82%
68%56%
18%33%
Sales Speed Over Supply
47
48
24% 25%
1Q11 2Q11
60% 51%
1Q11 2Q11
Lopes' Consolidated Sales Speed Habitcasa‟s Sales Speed
Sales Speed over Supply
*Management information,
The Sales Speed over Supply is obtained based on the quarter’s contracted GVS compared to inventory and launches.
Operational Highlights
49
Contracted Sales‟ Historical in the Primary Market*
•Unaudited managerial information.
• 2010 considers 100% of Patrimovel sales
Total GVS – Primary Market
(in R$ thousands)
591 850 1,166 1,253 1,556 1,853 2,545
4,873
9,370 8,658
14,364
2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010
50
11,756 14,828
613
2,290
2Q10 2Q11
12,369
Contracted Sales
(R$ MM)
Contracted Sales
51
3,138 3,872
272
1,085
2Q10 2Q11
3,410
45%
Units Sold
38%
In this Quarter, We Achieved R$ 4.9 billion in Contracted Sales.
4,957 17,119
22%
43%
35%
Secondary Market Non-listed homebuilders
Listed homebuilders
52
Contracted Sales breakdown
Contracted Sales
Contracted Sales= R$ 5 billion
R$ 1.1bi
R$ 2.2bi
R$ 1.7bi
Financial Highlights
53
2Q11 Results
54
2Q11 Results
(R$ thousand)
LOPES Pronto! CrediPronto! Consolidado
Gross Revenue 94.787 27.068 16.125 137.979
Revenue from Real Estate Brokerage 91.162 27.068 481 118.710
Revenue to Accrue from Itaú 3.625 - - 19.269
Earn Out 15.644
Net Revenue 86.090 24.584 16.046 126.720
(-) Operating Costs and Expenses (48.117) (14.396) (3.707) (66.219)
(-) Stock Option Expenses (CPC 10) (517) - - (517)
(-) Expenses to Accrue from Itaú (238) - (571) (809)
(=)EBITDA 37.217 10.188 11.768 59.174
EBITDA Margin 43,2% 41,4% 73,3% 46,7%
(-) Depreciation and Amortization (6.819) (5.284) (10) (12.113)
(+/-) Financial Result 10.664 1.720 (267) 12.116
(-) Income and social contribution taxes (10.803) (1.521) (957) (13.282)
(=) Net Income for the year 30.260 5.102 10.534 45.896
Net Margin 35,1% 20,8% 65,6% 36,2%
(=) Net Income for the year
- Attributable to Non Controlling Shareholders (6.244)
- Attributable to Controlling Shareholders 39.652
Net margin after Non Controlling Shareholders 31,3%
55
Net Revenue
(R$ million)
EBITDA Margin
Net Income after Non
Controlling Shareholders
(R$ million)
Net Margin after Non
Controlling Shareholders
Disconsidering the
effect of the Earn
Out, net revenue
would be R$ 111
million
Net Income in the
2Q11 sustained the
growth compared
to 2Q09 e 2Q10.
Quarterly Performance – Compared Analysis
Evolution of Net Revenue, EBITDA Margin, Net Income and Net Margin
21%
27% 31%
2Q09 2Q10 2Q11
11
21
40
40%
48% 47%
53 80
127
139%
18%
260%
51%
CrediPronto!
56
(R$ thousand) P&L 2010
Amount financed 600,030
Portfolio opening balance 177,688
Portfolio ending balance 707,053
Portfolio average balance 403,587
Financial Margin 9,773
% Spread 2.42%
(-) SalesTaxes -919
(-) Total costs and expenses -22,087
(-) Expenses Itaú -3,471
(-) Expenses Olímpia -12,551
(-) Commissions -5,945
(-) Insurance and sinister (+/-) -120
(+/-) Bank correspondance -
(+) Other Revenues (Financial) 2,153
(-) Allowance for Doubtful Accounts -3,210
(-) IRPJ/CSLL 302
(=) Net result -13,988
% Net margin -143%
50% Profit Sharing -6,994
*The managerial P&L measures the results of the JV. Olimpia’s Results and all Revenues and Expenses incurred by Itau are considered.
• The numbers of the managerial P&L were audited for 2010 by Ernst&Young and, due to its managerial nature, it does not follow accounting standards.
• General (0,5%)
57
Allowance for Doubtful Accounts
Automatic credit score – 100% of the new contracts
For delays higher than 29 days
Example of P&L with a contract de financiamento para um imóvel de $200:
Ex: Sale for
$300
Ex: Sale for
$150
Month 8
$100
-$60
+$200
$240
Month 1
$100
-$60
-
$40
Month 2
$100
-$60
-$5
$35
Month 5
$100
-$60
-$25
$15
+$100: Profit for the bank
-$50: Loss
of the bank
• Specific (variable)
Sale of the recovered property
Recovery of
Property
¹ Including general allowance
Default
Financial Margin
Expenses¹
Specific Allowance
Result
Additional Information
58
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.
Lopes‟ Contracted Sales Seasonality
Unstable sales behavior in each quarter accounts for variations in yearly sales
59 * The seasonality can not be verified in 2008, because of the effects of the world financial crisis.
17% 18%
14%
23%
15%
19% 21%
31%
22%
32%
24% 25% 25% 22% 23%
29% 28% 26%
37%
29%
41%
16%
33% 30%
2005 2006 2007 2008* 2009 2010
1Q 2Q 3Q 4Q
Ownership Structure
Total of 56,562,283 common shares
Ownership Structure Post-IPO
60
34%
8% 18%
32%
7% 1%
Rosediamond LLP
F.I.M. Crédito Privado Mocastland
Administradores
Investidores Estrangeiros - Free Float
Investidores Nacionais - Free Float
Pessoa Física