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Disclaimer
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 and uncertainties 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 directors, Rossi cannot guarantee future results or events. Rossi does not assume the commitment of update any of the forward-looking statement of information. Securities may not be offered or sold in the United States unlesss they are registered or exempt from registration under the Securities Act of 1933, as amended. Any offering of securities to be made in the United States will be made by means of an offering memorandum that may be obtained from the underwriters. Such offering memorandum will contain, or incorporate by reference, detailed information about Rossi and its subsidiaries, their business and financial results, as well as its financial statements. This material is for distribution only to person who (i) have professional experience in matters relating to investments falling within Article 19 (5) of the Financial Services and Markets Act of 2000 (Financial Promotion) Order 2005 (as amended, the “Financial Promotion Order”), (ii) are persons falling within Article 49 (2) (a) to (d) (“high net worth companies, unincorporated associations etc”) of the Financial Promotion Order, (iii) are outside the United Kingdom, or (iv) are persons to whom an invitation or inducement to engage in investment activity (within the meaning of section 21 of the Financial Services and Markets Act 2000) in connection with the issue or sale of any securities may otherwise lawfully be communicated or caused to be communicated (all such persons together being referred to as “relevant persons”). This material is directed only at relevant persons and must not be acted on or relied on by persons who are not relevant persons. Any investment or investment activity to which this material relates is available only to relevant persons and will be engaged in only with relevant persons. This presentation does not constitute an offer, invitation or solicitation of an offer to subscribe to or purchase any securities. Neither this presentation nor anything contained herein shall form the basis of any contract or commitment whatsoever.
Opening Remarks
Operating Performance
Cássio Audi
CFO and IRO
Financial Performance
Rossi Properties and Rossi Urbanizadora
Index
2
Leonardo Diniz
CEO
Rodrigo Martins
Sales Officer
3
Opening Remarks
Continued focus on cash generation and profitability ;
Record number of units delivered in 1H12: 8,856 ;
Operations in major metropolitan areas based on following fundamentals:
Strong presence of Engineering Team and Rossi Vendas
Strong market share
Excellent local market intelligence
Revision in Launch Guidance
Creation of 2 new Business Areas:
Rossi Commercial Properties
Rossi Urbanizadora
77%
17%
6%
Convencional
Low Income
Commercial
22%
14%
14%12%
9%
7%
7%
6%
4%2%0%
Amazonas
Distrito Federal
Rio Grande do Sul
São Paulo (2 cities)
Rio de Janeiro
Minas Gerais
Ceará
Sergipe
Goiás
Paraná
São Paulo
Pernambuco5
Launches
R$ million
Breakdown by Segment (% Rossi) – 1H12 Breakdown by Region (% Rossi) – 1H12
1,309
538
2,031
1,052
304
326
345
485
2Q11 2Q12 1H11 1H12
Launches | R$ million
Rossi Partners
1,613-46%
864
2,377
1,537
-35%
6
Contracted Sales
R$ million
Breakdown by Segment (% Rossi) – 1H12 Breakdown by Region (% Rossi) – 1H12
17%
14%
13%
11%9%
8%
7%
6%
5%2%
2%1%
São Paulo (16 cities)SergipeRio Grande do SulAmazonasSão Paulo Rio de JaneiroCearáParanáMinas GeraisMato Grosso do SulDistrito FederalGoiásParáPernambucoEspírito SantoSanta Catarina
63%
34%
3%
Conventional
Low Income
Commercial
897 682
1,664 1,321
236
208
493
443
2Q11 2Q12 1H11 1H12
Contracted Sales| R$ million
Rossi Partners
1,133
-21%
890
2,157
1,764
-18%
7
Successful Launches in the quarter
Jardins de Londres
Conventional
Aracaju- SE
162 units
2Q12
Reserva Inglesa
Conventional
Amazonas - AM
648 units
2Q12
Parque Flamboyant 56
Conventional
Goiânia - GO
85 units
2Q12
Rossi Ideal Flamboyant
Low Income
Sumaré - SP
330 units
2Q12
Vila Flora Sumaré | Camélias
Low Income
Sumaré - SP
200 units
1Q12
Rossi Nova Palhano
Conventional
Londrina - PR
244 units
1Q12
Rossi Praças Golfe
Low Income
São José do Rio Preto - SP
240 units
1Q12
Rossi Vila Boa Vista
Conventional
Recife - PE
116 units
1Q12
8 ¹ Initial Inventory adjusted by projects cancelations
Sales and Inventory
Sales Speed (Sos)
Inventory
2.006 2.052 2.180 2.364 2.319 2.701 2.823 3.128 3.003 2.569
1Q10 2Q10 3Q10 4Q10 1Q11 2Q11 3Q11 4Q11 1Q12 2Q12
25% 26% 27% 28% 25% 25% 25% 23%18% 21%
Sales Speed and Inventory
74%
26%
Sales Breakdown – 1H12
68%
32%
Invetory Sales
Launches Sales
Sales Breakdown – 2Q12
Invetory Sales
Launches Sales
39%
15%10%
8%
8%
7%
4%4%
3%2%São Paulo (others cities)
Federal District
Rio Grande do Sul
Amazonas
Minas Gerais
Rio de Janeiro
Pernambuco
Sergipe
São Paulo (RMSP)
Goiás
Alagoas
9 RMSP – São Paulo Metropolitan Region
Land Bank
48%
43%
10%
Strategic Breakdown| % Rossi
Rossi Residencial
Rossi Urbanizadora
Restructuring
R$20.4 billion
38%
17%
24%
16%
6%Low Income
From R$ 200K to R$ 350K
From R$ 350K to R$ 500K
Above R$500K
Commercial
Income Segment Breakdown| Rossi Residencial
R$9.8 billion
76%
24%
Permuta
Dinheiro
76% Acquired by Swaps
Swaps
Cash
States Breakdown| Rossi Residencial
R$9.8 billion
145
90
277
237
2Q11 2Q12 1H11 1H12
-38%
-14%
85
(9)
163
35
2Q11 2Q12 1H11 1H12
-79%
-111%
232
147
446
375
2Q11 2Q12 1H11 1H12
-36%
-16%
752704
1,4081,493
2Q11 2Q12 1H11 1H12
-6%
+6%
11
Financial Highlights
Net Revenues (R$ million) Gross Income (R$ million) and Gross Margin (%)
EBITDA (R$ million) and EBITDA Margin (%) Net Income (R$ million) and Net Margin (%)
21%
31%
25%
32%
13%
19%
16% 20%
12%
2%
53 55
76
69
56 54
1Q11 2Q11 3Q11 4Q11 1Q12 2Q12
In 3Q11, Rossi announced the program to reduce
G&A expenses;
The target is to maintain the same absolute
amount in 2011 by 2012;
Expenses in 2Q12 were flat with 2Q11, therefore
if you exclude inflation from the period, there was
a reduction in real terms.
Decrease of R$ 13 MM
G&A Expenses Reduction Plan
G&A Expenses
13
¹ Excluding debentures with CEF earmarked as Construction Finance
² refer to credits arising from trade receivables from projects that have been completed and are in the process of being released for assignment and transfer to the inancial institutions that financed the project.
Indebtness
Debt
Debt Breakdown Debt Profile
Construction Financing
58%
Debentures 29%
Working Capital 12%
Long Term 70%
Short Term 30%
Strong cash position of R$ 1.3 billion (45% of Shareholders' Equity);
58% of debt is construction financing;
70% with long term maturity;
R$ million 2Q12 1Q12 Chg (%)
Construction Finance 2,432 2,228 9.2%
Working Capital 874 228 283.2%
Debentures ¹ 971 985 -1.4%
Gross Debt 4,277 3,441 24.3%
Cash and Cash Equivalents 1,259 1,298 -3.0%
Net Debt 3,019 2,143 41%
Clients Securitization 466
Gross Debt (ex/ Clients Securitization) 3,811 3,441 11%
Clients to be transferred ² 213 228 -6.6%
Cash and Cash Equivalents Adjusted 1,472 1,526 -3.5%
Net Debt (ex/Clients Securitization) 2,340 1,915 22%
Net Debt/ Shareholder´s Equity 83.8% 67.9% 16.0 p.p.
14
Cash Burn and Leverage
Cash burn – R$ MM
Cash burn excluding the nonrecurring debts and the stock buyback program;
Leverage and Indebtness – R$ MM
432
476512
556 551591
49.4%
62.3% 66.1%72.0%
67.9%
83.8%
1Q11 2Q11 3Q11 4Q11 1Q12 2Q12
Construction Outflow (R$ MM) Net Debt/Equity (%)
178
213
195
268
94
198
93
13
104
273
1Q10 2Q10 3Q10 4Q10 1Q11 2Q11 3Q11 4Q11 1Q12 2Q12
16
Rossi Commercial Properties
Current Portfolio of Projects
RCP is focused on developing regional, neighborhood, convenience and strip mall opportunities in Brazil
17 Projects “Already in-House” with total GLA of 169 mil m²
Operates under 4 different formats:
Focus on convenience consumption
Neighbourhood Malls
Shopping Canters
Retail Mixed-Use Projects (combines residential and commercial developments)
Access to Rossi nationwide landbank , with strong pipeline of projects
Proven track record in development and construction
Right of first refusal on Rossi landbank with retail potential
Financing facility already secured at attractive conditions
R$750mm (US$480mm) already negotiated to leverage 80% of the projects Capex
Overview
17 Projects
169 mil m2 in GLA
9 States
RS
SC
PR
SP
MG
GO
MT
AC
AM
RR
RO BA
PI
MA PA
AP
TO
CE RN
PE
AL SE
MS
RJ
ES
DF
PB
25,000 14.9%
4,150 2.5%
20,184 12.1%
24,980 14.9%
63,058 37.7%
10,000 6.0%
2,000 1.2%
11,000 6.6%
7,068 4.2%
17
Rossi Urbanizadora
Development of unifamily and multifamily lots ;
Nationwide structured portfolio;
LandBank of 19.250.677 m2 ;
Experienced and qualifed Team;
Rossi has proven track record of excelence in developing big lots, such as: Villa Flora (Sumaré), Le Monde (Campinas), Rossi Central Parque (Porto Alegre), among others.
Vila Flora Sumaré | Campinas - SP
Total Land: 791,853 m²
Lots Area: 475,112 m²
# of units: 3,500
Lanuch year: 1999
Vila Flora Votoramtim | Campinas - SP
Total Land: 465,610 m²
Lots Area: 264,153 m²
# of units:
1,322 houses
470 Apartments
Rossi Central Parque| Porto Alegre - RS
Total Land: 300.000 m²
Lots Area : 7
Launches:
246 commercial units
742 Apartments
44 houses
18
Equipe de RI
Thank You!
IR Team Phone: +55 (11) 4058-2685 [email protected] www.rossiresidencial.com.br/ir