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2008 Conference Call Presentation Results
PresentersMarcos Lopes – CEOFrancisco Lopes – COOMarcello Leone – CFO and IRO
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Forward-looking statements
This presentation does not constitute or form part of any offer, or invitation or solicitation of any offer to purchase, sell or subscribe for shares or other securities of the Company, nor shall this presentation or any information contained herein form the basis of, or act as inducement to enter into, any contract or commitment whatsoever.
This presentation contains financial and other information related to the business operations of Lopes –LPS Brasil Consultoria de Imóveis S.A and its subsidiaries (“Lopes” or the “Company”) as of and for the period ended December 31st, 2008. It should not be considered as a recommendation for prospective investors to sell, purchase or subscribe for securities of the Company. The information presented herein is in summary form and does not purport to be complete. No reliance should be placed on the accuracy completeness of the information contained herein, and no representation or warranty, express or implied, is given on behalf of the Company or its subsidiaries as to the accuracy completeness of the information presented herein.
This presentation contains forward-looking statements. Investors are advised that whilst the Company believes they are based on reasonable assumptions by Management, forward-looking statements rely on current expectations and projections about future events and financial trends, and are not a guarantee of future results. Forward-looking statements are subject to risks and uncertainties that affect or may affect business conditions and results of operations, which therefore could materially differ from those anticipated in forward-looking statements due to several factors, including competitive pressures, Brazilian macroeconomic conditions, performance of the industry, changes in market conditions, and other factors expressed or implied in these forward-looking statements or disclosed by the Company elsewhere, factors currently deemed immaterial.
The forward-looking statements contained herein speak only as of the date they are made and neither Management, nor the Company or its subsidiaries undertake any obligation to release publicly any revision to these forward-looking statements after the date of this presentation or to reflect the occurrence of unanticipated events.
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Program
I. Highlights
II. Operational Results
III.Financial Results
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Highlights
Contracted sales in 4Q08 totaled R$1.6 billion, and R$10.1 billion in the full year of 2008.
São Paulo represented R$667 million, Rio de Janeiro R$322 million and Other Markets R$612
million in 4Q08. In the total contracted sales in 2008, São Paulo represented R$4,736 million, Rio de
Janeiro R$1,962 million and Other Markets R$3,401 million.
Lopes sold 6,686 units in the Brazilian market in 4Q08, of which 2,545 were in the low income
segment (up to R$150,000 each). In the twelve months, Lopes sold 38,870 units, of which 14,755
units were in the low income segment, representing 38% of the total units sold.
In December 2008, Lopes amended its purchase contract with Patrimóvel, which was converted
into a call option by the original values, exercisable within a three year period. Lopes also holds the
right of preference over any offer for Patrimóvel’s shares that may occur for a lower value than the
original, as long as the society exists. The values already paid were converted into 10% of
Patrimóvel’s shares, without any additional payments. This expense is both non recurring and non tax
deductive.
Lopes had a R$125 million cash position in 4Q08, R$65 millions for acquisitions and estimated
earn-out payments. Therefore, the Company has a R$60 million available cash.
In the second half of 2008, Lopes made a cost reduction for the year of 2009 in the estimated
amount of R$67 million* per year (R$41 million/year in 3Q08 and R$26 million/year in 4Q08). The
current cost structure is ideal to reach the sales guidance in 2009 and to keep up with renewed
activity in the real estate market. With this reduction, the Company has proven its capacity to rapidly
adjust and still maintain profitability.
*Estimates based on January expenses level.
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Highlights
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Operational Results
Contracted Sales
(R$ MM)
Contracted Sales
-26%
7
93%1.6
2.2
5.2
10.1
4Q07 4Q08
8
52% 50% 42% 42%
23% 18%18% 20%
25% 32% 40% 38%
1Q08 2Q08 3Q08 4Q08
São Paulo Rio de Janeiro Other Markets
2.3 3.3 2.9
Contracted SalesContracted Sales
1.6
(R$MM)
Contracted Sales Evolution by Geographic Region
9
193%
37%R$ 2.9 BN
R$ 4.0 BN
Lopes Positioning in the Low Income Segment
With the expansion of the low income segment in São Paulo’s market, the Habitcasa’s initiative was essential to protect the Lopes’ market share of
launchings.
Data of the Metropolitan Region of São Paulo – Source: EMBRAESP and Lopes managerial data.
1st Lopes R$ 5 bnMarket Share:
25%
5th Habitcasa R$ 1 bn
Market Share: 6%
31%
3º
Fernandes Mera
6%
1º Lopes/
Habitcasa
4 ºCoelho da Fonseca
5%
13%
5ºDel Forte
(BR Brokers)
4%
2 ºAbyara
(BR Brokers)
6ºIPrice(BR
Brokers)
4%
9%
7ºItaplan
2%
10ºExclusiva
3%
23%
11º to 167ºOther
9ºKlabin Segal
Market Share
R$ (MM) ¹
8ºAvance
(BR Brokers)
2%
142%
Launched GVS¹ (R$) and Market Share 2008 – RMSP
10¹ Nominal FiguresSource: Lopes Market Intelligence and Embraesp
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Financial Results
57.0
35.5
4Q07 4Q08
Net Revenues
Net Revenues
(R$ MM)
12
-38%
143.0
232.0
2007 2008
62%
Cash Position Before and After Patrimóvel’s Renegotiation
125
(85)
08 Cash Position Future Payments*
Final Cash Position
Cash Position With Patrimóvel(R$MM)
(210)125
60
(65)
08 Cash Position Future Payments*
Final Cash Position
Cash Position Without Patrimóvel(R$MM)
*Future Payments:
R$ 145 millions - Patrimóvel
R$30 millions – Acquisitions Payments
R$35 millions – Estimated Acquisitions’ Earn-out Payments
* Future Payments:
R$30 millions – Acquisitions Payments
R$35 millions – Estimated Acquisitions’ Earn-out Payments
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Non Recorrent Effects
Patrimóvel
Patrimóvel’s Goodwill(R$ 75.4 MM)
Total Patrimóvel’s Payable Accounts
(interest expenses reversal)R$ 14.6 MM
Impact on Results(R$ 60.8 MM)
New Accounting Practices
CPC 04 – Pre-Operational CostsR$10 MM
CPC 10 – Stock OptionR$6.3 MM
Estimated Cost Reduction
Reduction One-Time Costs
1st phase R$ 41 MM/year R$ 3.1 MM
2nd phase R$ 26 MM/year R$ 2.3 MM
Total R$ 67 MM/year R$ 5.4 MM
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Adjusted EBITDA Pro Forma*
*Adjusted EBITDA is a non-accounting measure created by Lopes, consisting of net income before the participation of minority interests, income tax and social contribution tax, net financial result (financial revenues and expenses), depreciation, amortization and non-operating income. The calculation of the Adjusted EBITDA does not correspond to any generally accepted accounting practice in Brazil, nor does it represent cash flow for the periods presented, and should not be considered a substitute for net income or a substitute for cash flow as an indicator of liquidity. Adjusted EBITDA Pro Forma does not considers the effects of Patrimóvel’s goodwill lost, changes on accounting practices and the cost reduction.
28,5
(4,4)
72,2 74,0
Adjusted EBITDA Pro Forma
-115%
50%
-12%
EBITDA MarginEBITDA Margin
3%51% 32%
4Q07 4Q08 2007 2008
(R$ MM)
74 (75)
(10)(6) (5)
(23)
Adjusted EBITDA Pro Forma
Patrimóvel s Goodwill New Accounting Practices
Stock Option Recognition Cost Reduction Impact Adjusted EBITDA
Adjusted EBITDA Pro Forma 2008(R$ MM)
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Lopes 2008 EBITDA’s Analyze
3Q08 ∆ 4Q08
Sales R$2.9 Billions -45% R$1.6 Billion
Net Commission 2.5% 4% 2.6%
Net Revenue R$65.3 Millions -46% R$35.5 Millions
Operational Expenses R$44.9 Millions -14% R$38.7 Millions
Pronto!’s Operational Costs*
- - R$2.8 Millions
23 34 20 (4)
74
1Q08 2Q08 3Q08 4Q08 2008
EBITDA 2008(R$MM)
42% 45%31% -12%
32%
*This value is not an indicative of Pronto!’s operational costs, it should not be used as base to on going expenses, because of the accounting practices changes.
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Adjusted Net Income Pro Forma*
Adjusted Net Income Pro Forma(R$ MM)
-166%
35%
-37%
Adjusted Net MarginAdjusted Net Margin
-39%
37%14%
4Q07 4Q08 2007 2008
(61)32
(10)(6)
(5)
(50)
Adjusted Net Income Pro Forma
Patrimóvel Net Effect
New Accounting Practices
Stock Option Recognition
Cost Reduction Impact
Adjusted Net Income
Adjusted Net Income Pro Forma 2008(R$ MM)
* The adjusted net income is the accounted net income, excluding the amortization of the goodwill. Adjusted Net Income Pro Forma does not considers the effects of Patrimóvel’s goodwill lost, changes on accounting practices and the cost reduction.
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Cost Reduction Quarterly Effect
*About the impact of this reduction annualized, the Company will also incur in:
-Pronto! expenses (with its own revenue guidance)
-Already granted Stock Options expenses (R$3.3 million in 2009)
*Estimates based on January expenses level.
From a R$165MM year base, the on going
costs reached an estimated amount of R$67MM*.
Pronto!’s Costs in
4Q08
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2008 Results Conference Call
Portuguese EnglishDate: 02/20/2009, Friday Data: : 02/20/2009, FridayTime: 10h (BR Time) / 08h (NY Time) Time: 12h (BR Time)/ 10h (NY Time)Telephone: +55 (11) 4688-6301 Telephone: +55 (11) 4688-6301
+1 786 924-6977Password: Lopes Password: LopesReplay: (55 11) 4688-6312 Replay: (55 11) 4688-6312Replay Code: 634 Replay Code: 875
CONTACTS
Marcello LeoneCFO and IROTel. +55 (11) 3067-0015
Samia NemerIR Coordinator Tel. +55 (11) 3067-0257
E-mail: [email protected]/ri
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