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Earnings Release 4Q10 and 2010March 24, 2011
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Earnings Release 4Q10
Rubens Menin
Opening Comments
Highlights
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Market
Real Estate Financing
Financial Results
4Q10Earnings Release
Demand continues strong...
Contracted Sales (%MRV) - R$ million...In 4Q10
We sold R$1.1 billion, 53% higher than 4Q09
... In 2010
Contracted sales reached R$ 3.8 billion, within
the Company's guidance range for 2010
35,998 units sold
Sales over Supply of 32%
Sales in 14 states + Federal District and 65
cities.
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206 717
1,544
2,822
3,753
751
1,149
2006 2007 2008 2009 2010 4Q09 4Q10
CAGR 106.5%
53.0%
Guidance 2010 2011
Contracted Sales (%MRV) - R$ million 3,700 ~ 4,300 4,300 ~ 4,700
EBITDA Margin* 26% ~ 29% 25% ~ 28%
* according to the current accounting practices
4Q10Earnings Release
CEF is strongly committed with ‘My house, My Life’ Program
MCMV 2 Launch: commitment of the Federal
Government to continue the support to the real estate
low-income segment
Increasing volume of CEF contracted units
Largest operator of the Minha Casa Minha Vida (My
House, My Life) program.
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Client Financing (units)
1,8422,553 3,709 5,665
7,744 6.5806972,539
5,092
8,801
4,702
10,367
18,111
24.691
1Q09 2Q09 3Q09 4Q09 1Q10 2Q10 3Q10 4Q10
TransfersYTD
Status Dec 31-2010
Contracted (units) 1,005,028 50,384 5%
00-03 MW 574,874 0
03-10 MW 430,154 50,384 12%
(VGV R$million) R$ 51,310 R$ 4,987 10%
Source : Caixa and MRV
4Q10Earnings Release
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Net Revenue (R$ million) Gross Profit (R$ million)
EBITDA (R$ million) and EBITDA Margin (%)
Net Income(R$ million) and Net Margin (%)
155.8 187.5
439.5
795.9 29.1%
21.6% 26.7% 26.3%
4Q09 4Q10 2009 2010
20.4%
81.1%
535.6
866.2
1,647.6
3,021.0
4Q09 4Q10 2009 2010
61.7%
83.4%
195.0 235.6
577.8
976.8
4Q09 4Q10 2009 2010
20.8%
69.1%
121.8 152.1
347.3
634.5
22.7%
17.6%
21.1%21.0%
4Q09 4Q10 2009 2010
24.9%
82.7%
REF (Gross of Taxes)
(R$ million) sep/10 jun/10 Chg. %
Unearned Sales Revenues 3,113.9 2,809.9 10.8% ↑
(-) Unearned Costs of Units Sold (1,684.6) (1,461.6) 15.3% ↑
Unearned Results 1,429.2 1,348.3 6.0% ↑
Unearned Results Margin 45.9% 48.0% 2.1 p.p. ↓
4Q10Earnings Release
Consistent Financial Results
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Land Bank
Launches
Contracted Sales
Inventories at Market Value
Production
Productivity Index
Indebtedness and Net Debt
Operational and Financial Performance
Operational and Financial Performance
4Q10
... As of December 31, 2010:
• 134 thousand potential units
• Average price of R$101.3 thousand (focus on lowincome)
• 422 units per construction site (average)
• Increase on land bank to meet the strong andincreasing demand
... by financing source Dec/10% swap / land cost % land cost/ PSV
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Operational and Financial Performance
Land Bank (%MRV)
Land Bank %MRV (R$ billion)
4Q10
9.0 10.6 10.9 11.3
12.4 13.6
dec/08 dec/09 mar/10 jun/10 sep/10 dec/10
Swap38%
Cost9%
FGTS97% Savings
Accounts3%
... by price range in 2010
Operational and Financial Performance
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... by financing source in 2010
... in 2010
• Launches of 167 new projects
• PSV of R$4.6 billion – 46,975 units
• 67% of the units launched are eligible to MCMV in4Q10
• Launches in 14 states and the Federal District and in 56cities in 2010
Launches (%MRV)
Launches %MRV (in R$ million)
4Q10
1,052.7
1,852.0
2,586.1
4,604.0
4Q09 4Q10 2009 2010
75.9%
78.0%
Below R$80,000
11%
R$80,001 to
R$130,00072%
Over R$130,000
17%
FGTS79%
Savings Accounts
21%
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Operational and Financial Performance
Contracted Sales (%MRV)
... in 2010
• Total sales of R$3.8 billion
• 35,998 units sold
• Sales over Supply of 32%
• Sales in 14 states + DF and 65 cities
Contracted Sales (%MRV) - R$ million
... by price range in 2010
... by financing source in 2010
4Q10
Below R$80,000
9%
R$80,001 to
R$130,00071%
Over R$130,000
20%
FGTS74%
Savings Accounts
26%
750.9 1,148.6
2,821.8
3,753.0
4Q09 4Q10 2009 2010
53.0%
33.0%
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Inventory distribution of units for saleper construction phase as of Dec/31/10
Inventory at Market Value 12/31/10 = R$ 2.9 billion
Inventory distribution of units for saleper financing source as of Dec/31/10
Operational and Financial Performance
Inventory at Market Value (%MRV)
4Q10
69%
28%3%
Not iniciated
Under construction
Finished FGTS85%
Savings Account
15%
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Operational and Financial Performance
Production
4Q10
Built and Finished Units
(units)
2,483 2,779
4,325 3,922
5,141
6,478
7,384 6,982
2,020
2,564 2,035 2,187
1,761
2,998
5,132 5,250
1Q09 2Q09 3Q09 4Q09 1Q10 2Q10 3Q10 4Q10
Built Units Finished Units
13,509
25,985
8,806
15,141
2009 2010
Built Units Finished Units
92%
72%
Selling Expenses
(R$ million)
Selling Expenses / Contracted Sales %MRV (%)
and Selling Expenses / Net Revenue (%)
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Operational and Financial Performance
Productivity Index
... in 2010
• 30% of contracted sales via internet
• The most visited website among homebuilders in Brazil – 1.6 million visits/month
• 2,500 brokers (own and outsourced)
4Q10
31.8
52.9
105.2
163.1
4Q09 4Q10 2009 2010
66.3%
55.1% 5.9% 6.1%
6.4% 5.4%
4.2%4.6%
3.7%
4.3%
4Q09 4Q10 2009 2010
% Net Revenue
% Sales
G&A Expenses
(R$ million)
G&A Expenses / Contracted Sales %MRV (%)
and G&A Expenses / Net Revenue (%)
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Operational and Financial Performance
Productivity Index
... in 2010
• Continued investments in IT
• Shared Service Centre – productivity and costreduction
BPM ECM GED
Cognos (Planning) SAP - BO (Cube) Microsoft (Report)
BI - Business Inteligence
RM - HR Management
Microsoft Dynamics
Microsoft Sharepoint
ECM - Content Management
ERP
Portal Colaboration
SAP ECC 6.0
MRV Obras
CRM
Client Relationship Management
4Q10
29.8 39.6
100.1
146.9
4Q09 4Q10 2009 2010
33.1%
46.7%5.6%
4.6%6.1%
4.9%
4.0%3.4%
3.5% 3.9%
4Q09 4Q10 2009 2010
% Net Revenue
% Sales
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Debt Maturity Schedule
Loans and Financing and Net Debt
Operational and Financial Performance
Net Debt
4Q10
169.6 99.8
418.0 498.1
374.9
265.8
106.3 6.8
12 months 13 to 24 months 25 to 36 months Over 37months
Debenture Loans - Financing
(R$ million) dec/10 dec/09 Var. %
Total debt 1,939.3 786.5 146.6% ↑
(-) Cash and cash equivalents and Securities (1,167.0) (714.0) 63.4% ↑
Net Debt 772.4 72.5 965.4% ↑
Net Debt / Shareholder's Equity 26.9% 3.0% 23.8 p.p. ↑
Net Debt / EBITDA 0.97 0.16 488.3% ↑
dec/10 sep/10
Working capital – CDI 1,145.6 1,130.6
Debentures - 1st Issuance - 1st series 06/15/2013 CDI + 1.5% p.a. 272.9 280.9
Debentures - 1st Issuance - 2nd series 06/15/2013 IPCA + 10.8% p.a. 34.3 32.7
Debentures - 2nd Issuance 05/25/2011 CDI + 3.7% p.a. 40.6 60.8
Debentures - 3rd Issuance 2/1/2014 CDI + 1.6% p.a. 542.2 526.6
Working capital – CDI 10/04/2010 to 08/09/2013 CDI + 1.02% to 2.18% p.a. 255.6 229.7
Construction Finance - TR 782.4 453.1
Debentures - 4th Issuance 12/1/2015 TR + 8.25% to 10.25% p.a. 300.6 -
Construction Finance 10/06/2011 to 11/30/2013 TR + 8% to 12% p.a. 481.8 453.1
Others 11.3 8.1
Others 16.5 13.7
Expenses from debenture's issuance (5.2) (5.6)
Total 1,939.3 1,591.8
Balance Due(R$ million) Maturity Charges
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Disclaimer
Earnings Release 4Q10
The material that follows is a presentation of general background information about MRV Engenharia e Participações S.A. and its subsidiaries (collectively,“MRV” or the “Company”) as of the date of the presentation. It is information in summary form and does not purport to be complete. No representation orwarranty, express or implied, is made concerning, and no reliance should be placed on, the accuracy, fairness, or completeness of this information.
This presentation may contain certain forward-looking statements and information relating to MRV that reflect the current views and/or expectations ofthe Company and its management with respect to its performance, business and future events. Forward looking statements include, without limitation, anystatement that may predict, forecast, indicate or imply future results, performance or achievements, and may contain words like “believe,” “anticipate,”“expect,” “envisages,” “will likely result,” or any other words or phrases of similar meaning. Such statements are subject to a number of risks, uncertaintiesand assumptions. We caution you that a number of important factors could cause actual results to differ materially from the plans, objectives,expectations, estimates and intentions expressed in this presentation. In no event, neither the Company nor any of its affiliates, directors, officers, agentsor employees shall be liable before any third party (including investors) for any investment or business decision made or action taken in reliance on theinformation and statements contained in this presentation or for any consequential, special or similar damages.
This presentation does not constitute an offer, or invitation, or solicitation of an offer to purchase any securities. Neither this presentation nor anythingcontained herein shall form the basis of any contract or commitment whatsoever.
The market and competitive position data, including market forecasts, used throughout this presentation was obtained from internal surveys, marketresearch, publicly available information and industry publications. Although we have no reason to believe that any of this information or these reports areinaccurate in any material respect, we have not independently verified the competitive position, market share, market size, market growth or other dataprovided by third parties or by industry or other publications. MRV does not make any representation as to the accuracy of such information.
The EBITDA, in this report, represents the net income before income tax and social contribution, net financial result, financial charges recorded under costof goods sold, depreciation, amortization and minority interest. MRV believes that the reversion of the adjustment to present value of receivables fromunits sold and not yet delivered that is recorded as gross operating revenue is part of our operating activities and therefore we do not exclude theserevenues from EBITDA’s calculation. EBITDA is not a Brazilian GAAP and IFRS measure and should not be considered in isolation and should not beconsidered an alternative to net income, as an indicator of our operating performance or cash flows or as a measure of our liquidity. EBITDA does not havea standard definition and other companies may measure their EBITDA in a different way.
This presentation and its contents are proprietary information and may not be reproduced or otherwise disseminated in whole or in part without MRV’sprior written consent.
Leonardo CorrêaChief Financial Officer
Mônica SimãoChief Investor Relations Officer
Ph.: +55 (31) 3348-7150
E-mail: [email protected]
www.mrv.com.br/ri
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Contacts
Earnings Release 4Q10