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Presentation of 2Q08 ResultsAugust 14th, 2008
Consistent and Solid Operating IndicatorsConsistent and Solid Operating Indicators
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Rubens Menin – CEO
218.5 254.3
513.2
691.5
797.7
2Q07 3Q07 4Q07 1Q08 2Q08
PSV R$ millions (%MRV)
Avg. GrowthRate *↑ 38.2%
145.8 191.0
249.8
340.1
480.7
2Q07 3Q07 4Q07 1Q08 2Q08
Sales R$ millions (%MRV)
Avg. Growth Rate *↑ 34.7%
80.3
113.3 128.9
184.0
277.1
2Q07 3Q07 4Q07 1Q08 2Q08
Net Operating Revenue R$ millions
Avg. GrowthRate *↑ 36.3%
17.5
31.4 32.1
44.4
68.8
2Q07 3Q07 4Q07 1Q08 2Q08
EBITDA R$ millions **
Avg. GrowthRate *↑ 40.8%
Consistent GrowthConsistent Growth
3
.
Comments on the 2Q08Comments on the 2Q08
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Leonardo Corrêa – Executive Vice-President and Investor Relations Officer
BrazilianBrazilian SocialSocial PyramidPyramid
A / B
C
D / E
2005 2006 2007
15%
34%
51%
18%
15% of the population28 million of people
36%46% of the population86,2 million of people
46%
39% of the population72,9 million of people
BRAZILIAN POPULATION DISTRIBUTION PER INCOME CLASS (%) 2005‐2006‐2007
SOURCE: PESQUISA CETELEM – IPSOS 2005/2006/2007
Class C has consistently grown throughout the past years...
RecoveryRecovery ofof the minimum wage purchasing powerthe minimum wage purchasing power
... and the minimum wage has grownin real terms...
SOURCE: DIEESE
Contracted Values SBPE + FGTSR$ billions
Source: ABECIP, CBIC, Banco Central do Brasil,*SBPE 2008 as of Mai/08
R$
45,2%
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‐
50
100
150
200
250
300
350
400
450
1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008
3,066 2,697 3,8615,478
6,768 6,919
3,199
9,7341,769 2,218
3,002
4,852
9,340
18,410
6,932
4,981
2002 2003 2004 2005 2006 2007 1S07 1S08
FGTS SBPE
WhatWhat doesdoes ClassClass CC intendintend toto purchase next yearpurchase next year??
“The intention to acquire a house remains in an upward trend...
... and it reaches the 16% record with easier access to credit.”
SOURCE: Research CETELEM – iPSOS 2005/2006/2007
%
7
9
16
10
13
20
25
26
18
21
28
37
41
10
14
11
17
18
23
20
19
20
33
41
40
9
10
11
16
17
18
19
20
20
32
37
37
Sporting Goods
House/Property
Motorcycle
General Working Tools
Decoration
Desktop Computer
Mobile Phone
TV, HI‐FI and Video
Automobile
Leisure
Furniture
Appliances
200520062007
MRV LOG MRV LOG –– WarehousingWarehousing, Industrial, Industrial CondominiumsCondominiums,, HUBsHUBs eeLogistics ParksLogistics Parks
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Capital Commitment: R$ 45 million.
Success Factors: i) strong demand and market; ii) experience in the distribution center market iii) expertise in land acquisition; and iv) low costs
Projects:
MRV LOG I – Construction already started. Gross Leasable Area - 54.500 m².
MRV LOG II – Construction begins in the 4Q08. Gross Leasable Area- 11.500 m².
MRV LOG I
MRV LOG II
RealReal Estate CorrespondentEstate Correspondent -- CEFCEF
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1st homebuilder in the country to be certified1st homebuilder in the country to be certifiedas a CEF Real Estate Correspondent as a CEF Real Estate Correspondent
Long experience in the “Associativo” model
Uninterrupted relationship with CEF for over 25 years
Increased efficiency to approve contracts andgrowth in operation volume
Debenture issueDebenture issue ++ Housebuilding FinancingHousebuilding Financing
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R$300 million Debenture issue in July 2008.
Contracting of construction financing for several ongoing projects, with a total value of R$164 million (outstanding).
Total Volume R$ 300 million, in two series
Issue Date June 15th, 2008
Term 5 years
Amortization 3rd, 4th and 5th year, in 3 equal parcels
1st series amount R$ 271,4 million
1st series interest CDI + 1,5% p.y.
Payable semiannually
2nd series amount R$ 28,6 million
2nd series interest IPCA + 10,8% p.y.
Payable annually
Operating andOperating and FinancialFinancial HighlightsHighlights
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LaunchesLaunches (%MRV, R$(%MRV, R$ millionsmillions))
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Launches in 1H08 have already reached 56.2% of the guidance…
218.5
691.5
797.7
432.5
1.489.3
2Q07 1Q08 2Q08 1H07 1H08
265.1%
15.4%
244.3%
LaunchesLaunches
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Price Range Distribution - 1Q08 Price Range Distribution- 2Q08
The R$80 thousand to R$130 thousand price range represents the largest share of our launched mix.
Under R$ 80,000
9%
From R$ 80,001 to R$
130,00062%
From R$ 130,001 to R$
180,00027%
Over R$ 180,000
2%
Under R$ 80,00011%
From R$ 80,001 to R$
130,00071%
From R$ 130,001 to R$
180,00015%
Over R$ 180,000
3%
Contracted Sales Contracted Sales (MRV%, R$ millions(MRV%, R$ millions) )
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Contracted Sales in 1H08 reached 43.2% of the medium range of guidance ...
8,0% 8,9%
12,5% 11,9% 10,9%
2005 2006 2007 1Q08 2Q08
Sales Average Speed (month)145.8
340.1
480.7
276.1
820.9
2Q07 1Q08 2Q08 1H07 1H08
229.7%
41.3%
197.3%
Contracted SalesContracted Sales
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Price Range Distribution- 1Q08 Price Range Distribution - 2Q08
The price range from R$80 thousand to R$130 thousand represents the largest share of our sales mix.
Under R$ 80,00016%
From R$ 80,001 to R$
130,00048%
From R$ 130,001 to R$
180,00023%
Over R$ 180,000
13%Under R$
80,00020%
From R$ 80,001 to R$
130,00046%
From R$ 130,001 to R$
180,00022%
Over R$ 180,000
12%
ContractedContracted Sales Sales –– SalesSales ChannelsChannels
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Our geographic diversification has strong impact in the distribution of contracted sales across sales channels...
... we optimize our sales channels according to our geographic presence.
REAL ESTATE BROKER
70%
OWN STORE
16%
VIRTUAL STORE
14%
163 177
1.433
10.009 10.122 10.384 10.087 10.252 9.618 9.935
2004 2005 2006 2007 Jan-08 Feb-08 Mar-08 Apr-08 May-08 Jun-08
Land Bank Land Bank (%MRV)(%MRV)
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R$ Millions... and an exceptional quality: located in urban areas.
Our land bank has an unique diversification...
Distribution
Capital Cities 30 47.6%Countryside Cities 33 52.4%
Total 63 100.0%
%MRV R$'000 % # of Projects Units (thousands)
Average Price R$'000
São Paulo 5,778.7 58.2% 124 57.1 101.1 Minas Gerais 1,767.0 17.8% 56 21.2 83.4 Espírito Santo 469.9 4.7% 7 5.3 88.0 Goiás 457.1 4.6% 11 5.2 88.1 Rio de Janeiro 309.4 3.1% 15 3.7 84.2 Rio Grande do Norte 243.8 2.5% 1 2.6 92.9 Rio Grande do Sul 190.1 1.9% 6 1.8 104.6 Paraná 176.3 1.8% 8 1.6 108.1 Ceará 166.4 1.7% 5 1.7 98.8 Santa Catarina 157.8 1.6% 7 1.5 108.8 Mato Grosso 115.3 1.2% 2 1.1 108.4 Mato Grosso do Sul 42.4 0.4% 1 0.4 107.2 Bahia 31.9 0.3% 3 0.3 94.3 Distrito Federal 28.6 0.3% 3 0.3 100.7
Total 9,934.7 100.0% 249 103.8 95.7
As of June 30, 2008
Net Operating Revenue Net Operating Revenue (R$(R$ millionsmillions ))
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Consistent Net Operating Revenue growth reflects the strength of our homebuilding structure.
80.3
184.0
277.1
141.9
461.1
-
50,0
100,0
150,0
200,0
250,0
300,0
350,0
400,0
450,0
500,0
2Q07 1Q08 2Q08 1H07 1H08
Net Operating Revenue (R$'MM)
244.9%
50.6%
225.0%
Gross Profit Gross Profit (R$(R$ millionsmillions ) ) and Gross Margin and Gross Margin (%)(%)
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Healthy margin due to the Company’s efficiency and strong market conditions.
30.4
75.7
112.7
53.2
188.4
37.9% 41.1% 40.7% 37.5%40.9%
-
20,0
40,0
60,0
80,0
100,0
120,0
140,0
160,0
180,0
200,0
2Q07 1Q08 2Q08 1H07 1H08
Gross Revenue R$'MM and Gross Margin %
Selling Expenses (R$‘MM) and Selling Expenses / Net Operating Revenue (%)
Productivity Indicators Productivity Indicators –– Selling ExpensesSelling Expenses
20
Increase in selling expenses reflects the growth of contracted sales...
Selling Expenses / Contracted Sales (%)
6.4
17.7
26.6
8.0%
9.6% 9.6%
2Q07 1Q08 2Q08
4.4%
5.2%5.5%
2Q07 1Q08 2Q08
G&A (R$’MM) and G&A / Net Operating Revenue (%)
Productivity Indicators Productivity Indicators –– G&A ExpensesG&A Expenses
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... and management has gained efficiency with the increase of the operational scale.
G&A / Contracted Sales (%)
10.5
15.2
21.0 13.1%
8.2%
7.6%
2Q07 1Q08 2Q08
7.2%
4.5% 4.4%
2Q07 1Q08 2Q08
EBITDAEBITDA (R$(R$ millionsmillions ) ) and EBITDA Margin and EBITDA Margin (%)(%)
22Note: EBITDA in 2Q07 and in 1H07 excludes non-recurring IPO expenses and expenses related to the Private Equity transaction.
Growing EBITDA margin is a reflection of scale gains...
17.5
44.4
68.8
29.9
113.3
21.8% 24.2% 24.8% 21.1% 24.6%
-
20,0
40,0
60,0
80,0
100,0
120,0
2Q07 1Q08 2Q08 1H07 1H08
Adj. EBITDA R$'MM and Adj.EBITDA %
Net Income Net Income (R$(R$ millionsmillions )) and Net Margin and Net Margin (%)(%)
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... and also results in an extremely healthy net margin.
16.1
50.8
66.7
24.4
117.5
20.1%27.6% 24.1% 17.2%
25.5%
-
20,0
40,0
60,0
80,0
100,0
120,0
140,0
2Q07 1Q08 2Q08 1H07 1H08
Adj. Net Income R$'MM and Adj. Net Margin %
Note: Net Income in 2Q07 and in 1H07 excludes non-recurring IPO expenses and expenses related to the Private Equity transaction.
Unearned Results Unearned Results (R$(R$’’000)000)
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R$'000 2Q08 1Q08 2Q07 Chg% 2Q08 x 1Q08
Chg% 2Q08 x 2Q07
Unearned Sales Revenue 811,745 606,988 242,048 33.7% 235.4%Unearned Cost of Units Sold (406,071) (298,010) (115,579) 36.3% 251.3%Unearned Results 405,674 308,978 126,469 31.3% 220.8%% Unearned Margin 50.0% 50.9% 52.2% -0.9 p.p. -2.3 p.p.
MRV firmly believes in the growth of the construction market.
OutlookOutlook
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2008
PSV (%MRV - R$'MM) 2,500 ~ 2,800
Contracted Sales - R$'MM 1,800 ~ 2,000
Gross Margin 40% ~ 44%
EBITDA Margin 24% ~ 28%
Net Margin 21% ~ 25%
This release contains forward-looking statements that are not merely historical facts but reflect the goals and expectations of MRV Engenharia’s management. Words such as “anticipates”, “believes”, “may”, “will”, “expects”, “intends”, “plans”, “estimates” or similar expressions are forward-looking statements. Though we believe that these forward-looking statements are based on reasonable assumptions, they are subject to risks and uncertainties, and are based on information currently available with MRV Engenharia. This presentation is current as of end 1Q08 and MRV Engenharia takes no responsibility to update it with new information and/or forward-looking statements. MRV Engenharia is not responsible for investments or investment decisions based on information contained in this presentation.
DisclaimerDisclaimer
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ContactsContacts
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Leonardo Corrêa
Executive VP and Investor Relations Officer
Mônica SimãoFinancial Director
Telephone: (31) 3348-7171
E-mail: ri@mrv.com.br
www.mrv.com.br/ri