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Apresentação Institucional em Inglês da Cyrela
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1
Grand Life SaúdeSão Paulo - SP
Launched in Sep, 2005Delivered in Oct, 2008
100% sold
Company PresentationJanuary 2009
2
Agenda
Company Highlights
Financial Information
Appendix
Sector Review
3
Sector Review
Floris Bosque ResidencialSão Paulo - SPLaunched in August, 200890% sold until September, 2008
4
Demand in Expansion
São Paulo Rio de Janeiro
Source: SECOVI-SP/EMBRAESP Source: ADEMI-RJ
Supply to Sales - 12 month curve in units
Porto Alegre Fortaleza
Source: SINDUSCON-CE/FIECSource: SINDUSCON-RS
Supply to Sales - 12 month curve in units
Supply to Sales - 12 month curve in units
Supply to Sales - 12 month curve in units
Mar-0111.2
Apr-076.8
Mar-0610.0
Jul-0414.1 Mar-03
11.9
Apr-0012.5
Jun-0214.0
Aug-084.5
Apr-
00Au
g-00
Dec
-00
Apr-
01Au
g-01
Dec
-01
Apr-
02Au
g-02
Dec
-02
Apr-
03Au
g-03
Dec
-03
Apr-
04Au
g-04
Dec
-04
Apr-
05Au
g-05
Dec
-05
Apr-
06Au
g-06
Dec
-06
Apr-
07Au
g-07
Dec
-07
Apr-
08Au
g-08
Feb-0516.1 Jul-08
13.9 Feb-0812.3
May-0711.3 Aug-06
9.4
Jan-0612.1
Oct-0518.9
Jul-0414.7
Jul-0
4Se
p-04
Nov
-04
Jan-
05M
ar-0
5M
ay-0
5Ju
l-05
Sep-
05N
ov-0
5Ja
n-06
Mar
-06
May
-06
Jul-0
6Se
p-06
Nov
-06
Jan-
07M
ar-0
7M
ay-0
7Ju
l-07
Sep-
07N
ov-0
7Ja
n-08
Mar
-08
May
-08
Jul-0
8
Sep-086.5
Sep-077.2
Jul-0616.7
Feb-0622.5
Feb-0424.1
May-0217.8
Jan-0013.3
Jan-0
0May
-00Sep
-00Ja
n-01
May-01
Sep-01
Jan-0
2May
-02Sep
-02Ja
n-03
May-03
Sep-03
Jan-0
4May
-04Sep
-04Ja
n-05
May-05
Sep-05
Jan-0
6May
-06Sep
-06Ja
n-07
May-07
Sep-07
Jan-0
8May
-08Sep
-08
Aug-0811.5
Aug-0715.8
Aug-0620.7
Oct-0518.6
Mar-0525.1
Sep-0317.0
Apr-0224.9
Nov-0015.2
Jan-0020.5
Jan-0
0Apr-
00Ju
l-00
Oct-00
Jan-0
1Apr-
01Ju
l-01
Oct-01
Jan-0
2Apr-
02Ju
l-02
Oct-02
Jan-0
3Apr-
03Ju
l-03
Oct-03
Jan-0
4Apr-
04Ju
l-04
Oct-04
Jan-0
5Apr-
05Ju
l-05
Oct-05
Jan-0
6Apr-
06Ju
l-06
Oct-06
Jan-0
7Apr-
07Ju
l-07
Oct-07
Jan-0
8Apr-
08Ju
l-08
5
Income and Employment
Source: MCM Consultoria and IBGE Source: CAGED
Income Growth Unemployment Rate
R$2006 = 100
Real Overall Wages Avg. Real Incomeper capita
98100102104106108110112114116118
Jun-06 Nov-06 Apr-07 Sep-07 Feb-08 Jul-08 Dec-081,050
1,100
1,150
1,200
1,250
1,300
Dec-086.8%
6.0%
7.0%
8.0%
9.0%
10.0%
11.0%
12.0%
13.0%
14.0%
Feb-
02A
pr-0
2Ju
n-02
Aug
-02
Oct
-02
Dec
-02
Feb-
03A
pr-0
3Ju
n-03
Aug
-03
Oct
-03
Dec
-03
Feb-
04A
pr-0
4Ju
n-04
Aug
-04
Oct
-04
Dec
-04
Feb-
05A
pr-0
5Ju
n-05
Aug
-05
Oct
-05
Dec
-05
Feb-
06A
pr-0
6Ju
n-06
Aug
-06
Oct
-06
Dec
-06
Feb-
07A
pr-0
7Ju
n-07
Aug
-07
Oct
-07
Dec
-07
Feb-
08A
pr-0
8Ju
n-08
Aug
-08
Oct
-08
Dec
-08
Unemployment Rate in Metropolitan Regions (30 days)
6
1.9 1.9 1.8 2.2 3.0 4.99.3
18.3
30.0 30.0
3.3 2.7 3 2.8 3.95.5
7.0
6.9
9.0 11.8
5.2 4.6 4.8 5.0 6.910.4
16.3
25.2
39.0 41.8
2000 2001 2002 2003 2004 2005 2006 2007 2008e 2009e
SBPE FGTS
Mortgage Credit Available
Mortgage Loans Funding (in R$ billion)
Source: ABECIP, Central Bank of Brazil and Secovi
65%
111%
73%
20%53% 46%
13% 10% 2% 2% 8% 6% 9%
249%
166% 156%141% 137% 125%
63%46% 37% 35% 33% 28% 17%
-20%
30%
80%
130%
180%
230%
280%
USA
Neth
erla
nds UK
Sout
h Af
rica
Irela
nd
Spai
n
Chile
Hung
ary
Indi
a
Braz
ilCz
ech
Rep.
Pola
nd
Mex
ico
Mortgage credit to GDP Ratio Total Credit to GDP
Mortgage to GDP Ratio
Source: Central Bank and Bradesco Corretora
CAGR 2003-2009e: 42%
0
100
200
300
400
500
600
1995
1996
1997
1998
1999
2000
2001
2002
2003
2004
2005
2006
2007
2008
e
SBPE FGTS
Source: ABECIP, Central Bank of Brazil and Banco Real
Mortgage LoansRecord = 627.000 in 1980
CAGR 2003-2008e: 19%
Con
trac
ts(th
ousa
nds)
7
Regulations of Mortgage Availability
Savings Accounts Funding
-
50
100
150
200
250
300
350
400
1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014
Savings Accounts Mandatory Lending Mortgage Loans
Source: Central Bank and Banco Real
Note: assumptions for the estimates following 2007 are-stability of savings account s with TR + 6%p.a. remuneration-mandatory lending at 65% of savings accounts-mortgage loans growth of 25%p.a. as of 2006-2007 growth
R$
Bill
ion
8
Low Default Rate for Mortgage
Cyrela’s ReceivablesOverdue receivables as the delay in payment > 31 days
Overdue receivables 1.4%Core business 1.6%Living 0.3%
Deliquency rate is close to zero
Source: Cyrela, ACSP, ABECIP and Banco Real* Market Data of 3Q08 not available – 3Q08 figure refers to 2Q08
Market Mortgage LoansDefault as the delay in payment > 90 days
Default on mortgage loans = 3.7%Default on general credit lines = 7.3%Default on loans with no collateral = 14.1%
3.6%2.4% 2.0% 1.3% 1.4% 1.4% 1.4%
11.0%
8.1%
4.0% 4.0% 3.7%2.1%
5.9%
9.2%
3.7%*
2003 2004 2005 2006 2007 1Q08 2Q08 3Q08
Cyrela 31 days overdue receivables Market Mortgage Loans with > 3 late payments
9
Market for Units of R$ 110,000 in 2005 and R$ 90,000 in 2008
> R$ 4,8004.7 mm families
From R$1,200 to R$4,80019.0 mm families
< R$1,20024.9 mm families
> R$1,40022.6 mm families
< R$1,40026.0 mm families
10%
39%
51%
47%
53%
TR+9%30 years
TR+14%10 years
Potential Demand:+17.9 mm families
Growth of Potential Demand
2005
Monthly Income Monthly Income
2008
Source: UBS Pactual
10
CompanyHighlights
Vivae Residencial Clube (Living)Rio de Janeiro - RJLaunched in July, 200870% sold until September, 2008
11
272207
992
1,965
972 1,211
2,917
5,393
3,4281,924
1,004700
5,250 - 5,600
2004 2005 2006 2007 2008e
236 268
546
1,572
949 1,023
1,915
4,392
2,8201,369755713
4,675 - 4,950
2004 2005 2006 2007 2008e
Excellent Track Record of Growth
Consistent track record of growth in Launches and Pre-sales Contracts
Launches (in R$ million) Pre - Sales Contracts (in R$ million)
2004 – 2008e CAGR = 55%
2004 – 2008e CAGR = 51%
+129%+85%
Cyrela Partners Cyrela Partners
12
703 6971,466
2,693
356
679
1,352
1,058 1,053
2,145
4,045
355
3Q07 3Q08 9M07 9M08Cyrela Partners
922 7481,513
2,685
305
911
1,286
1,574
1,053
2,424
3,971
652
3Q07 3Q08 9M07 9M08
Cyrela Partners
Launches and Pre-Sales Contracts – in R$ million
3Q08 Launches – Region
Launches Pre-Sales
3Q08 Pre-Sales – Income Segment
+89%+64%
-33.1%-0.5%
21%
26%
18%
30%
6%
Luxury
Mid-High
Middle
Economic
Super EconomicSP37% RJ
15%
Expansão47%
13
1,053
414
63839%
3Q08 Launches Sales of Launches3Q08 in 3Q08
3Q08 Inventory
Sales Speed – in R$ million
Sales Speed of Launches
Seller and Selling sales accounted for R$419.9million in 3Q08
It represents 47% of sales in the regions where Seller and Selling operate39%
64%
47%
47%
9%
30%
16% 12% 5%
39%
74%
0% 77%
81%
3Q08
2Q08
1Q08
4Q07
In 3 months In 6 months In 9 months In 12 months
51%
28%20%
1%
2,6851,721
964
1,265
733
532
538
152
386
4,587
2,693
1,893
99.3
12.4
86.9
Inventory Dec/07 +Launches 9M08
Sales 9M08 Inventory Sep/08
Launches 2008 2007 2006 Previous Years
Inventory in Sep/08 - %CBR 3Q08 Launch Sales
1T08Velocidade de VendasSales speed
14
Sales Performance – Residential – Jan/Sep 2008
Source: Cyrela MID - Jan-Sep 2008
13,060
1,567
Launches in SP
7,822
1,202
Pre-Sales in SP
MarketCyrela
2,569
548
Launches in RJ
1,453
319
Pre-Sales in RJ
MarketCyrela
São Paulo Rio de Janeiro
12% 15% 21% 22%
Cyrela’s stakes indicate strong sales performance in the main markets
Launches Pre-Sales Launches Pre-Sales
(R$ million) (R$ million)
15
Potential Sales Value (R$ million)
Launches 2004 to 2008 - SP Metropolitan Region
Source: Cyrela MID
Units
Luxury > R$ 3,500/m²
Super-Economic < R$ 1,900/m²
Economic > R$ 1,900/m², <2,700/m²
Middle > R$ 2,700/m², <3,500/m²
11,314 8,449 6,651
8,937 12,72123,464
5,30710,129
14,191
3,2244,051
6,162
28,78234,345 35,350
58,51250,468
10,88411,821
21,52410,269
19,074
8,567
7,030
3,688
2004 2005 2006 2007 Jan-Sep 2008
1,098 753 6361,803 2,688 3,5521,977
3,8944,3743,119
3,9394,497
7,9979,607
11,274
17,422
13,059
9721,117
4,0721,928
7,326
3,242
5,052
3,320
2004 2005 2006 2007 Jan-Sep2008
16
Launches 2004 to 2008 - RJ and Region
Luxury > R$ 3,500/m²
Super-Economic < R$ 1,900/m²
Economic > R$ 1,900/m², <2,700/m²
Middle > R$ 2,700/m², <3,500/m²
Source: Cyrela MID
Potential Sales Value (R$ million)Units
907 506 1,5981,142 3,080
2,6571,141
2,5113,846
3,666
1,734
1,7286,856 7,019
7,831
13,350
9,829
1,3021,171
5,800
2,680
3,885
1,677
2,363
1,491
2004 2005 2006 2007 Jan-Sep 2008
221 69 134200 659 350273
690 1,096659
1,729989
1,353
2,354
3,1473,446
2,569
219203
980759
975
509
1,272
883
2004 2005 2006 2007 Jan-Sep 2008
17
Sales Performance 9M08 – Residential Buildings
Source: Cyrela MID
77%
66%59% 57%
77%83%
75% 75%
Super-economic
Economic Middle Luxury
MarketCyrela
São Paulo – Sales Speed
Rio de Janeiro – Sales Speed
39%49%
44%
59%64% 60% 63% 62%
Super-economic
Economic Middle Luxury
MarketCyrela
18
LIVING – Sales Performance
Average Sales Speed
41%
63%
53%
50%
21%
32%
14% 14% 7%
2%
84%
87%
83%
41%3Q08
2Q08
1Q08
4Q07
In 3 months In 6 months In 9 months In 12 months
19
3.0
6.5
8.8
11.1
2005 2006 2007 9M08
Landbank
Income Segment
PSV: R$34.6 billion
Cyrela's Share: 76%
81% exchanged
11.1 million sq. m.
~126.7 thd units
Landbank – Usable Area(in million of sq.m)
+117%
+26%
+35%
Rio de Janeiro49.7%
Northeast19.8%
North3.0%
South5.7%
Minas Gerais0.5%
Espírito Santo3.0%
Southeast71.4%
São Paulo Capital29.6%
São Paulo Other cities
17.3%
4%
25%
31%
32%
8%Luxury
Mid-High
Middle
Economic
SuperEconomic
20
Availability of financing funds for construction
It is possible to launch R$ 3 of Potential Sales Value for each R$ 1 available for construction financingIt is possible to finance approximately R$ 15 billion in potential sales value with the creditlines still available, not considering the securitization of receivables
Financing Capacity - SFH
Exemplo:
100% of PSV
Land: up to 20%
Construction: 40%
80% financed by SFH = 32% of PSV
20%: own capital or CEF = 8% of PSV
R$
billi
on
Amount due: 0.6
Credit limit 8.1
Available 5.0
Agreed 3.1
21
Client Debt Transfers
Transfers in 2008: R$ 70 million, 117% higher than 2007
70% are transferred less than 1 month after condominuimregistration
Debt transfers forecast: R$ 200 million in 2009 and R$ 400 millionin 2010
October/2008: First Living client debt transfer (Garden Resort in Jundiaí – SP)
22
For the client:
- Amount limited to 80% of the sale
and evaluation value
- Guaranty: deed of trust
- Payment terms up to 30 years
For construction:
- Amount limited to 80% of the total
construction cost or R$ 350 thousand/unit
which can represent PSV of R$ 1 million/unit
- Guaranty: 120% of the amount due
- Payment term up to 4 years after completion
of construction
- All projects can be financed by SFH, taking
into consideration the maximum value of units
Financing by SFH
Up to R$ 350 thousandper unit
23
Guidance Revision
63 to 68%UnderRevision62 to 67%63 to 68%%CBR
20092008(R$ million)
PreviousNewPreviousNew
UnderRevision
UnderRevisionLaunches – 100% 5,250 to 5,600 7,000 8,800
Pre-Sales – 100% 4,675 to 4,950 5,500 7,000
24
Financial Information
Brisas Altos do Calhau (Living)São Luis - MALaunched in August, 200875% sold until September, 2008
25
2007
1,577.6
3,328.6
(60.8)
1,283.0
(1,919.0)
3,202.0
(1,703.7)
40.1%
2006
1,020.0
1,630.7
(36.8)
653.9
(923.7)
1,577.6
(1,072.8)
41.4%
R$ million
Sales to be recognized at the beginning of the period
Net sales recorded in the period
Revenues recognized in the period
Sales to be recognized at the end of the period
Cost of units sold to be recognized
Selling Expenses
Gross profit to be recognized
Percentage of gross profit
9M08
3,201.9
3,529.7
(81.8)
1,832.5
(2,800.5)
4,714.8
(2,016.4)
40.6%
Pre-Sales to be Recognized
26
Financial Results – in R$ million
Net Revenues
Gross Profit Backlog
+125%
+82%
+81%
180.5300.4 294.2
449.1
812.2
40.4% 41.5%42.3%43.5% 41.8%
3Q07 2Q08 3Q08 9M07 9M08
Gross Profit Gross Margin
2,099.1
3,202.03,581.1
4,425.9 4,714.8
40.1% 40.6%40.2%40.5% 40.5%
9M07 2007 3M08 1H08 9M08Revenue to be Recog. Gross Mg. To be Recog.
+68%
+63%
414.8
743.9 695.8
1,073.6
1,958.6
3Q07 2Q08 3Q08 9M07 9M08
27
Financial Results – in R$ million
Expenses on Pre-Sales Contracts
EBITDA
Expenses on Net Revenue
+51%
110.4162.8 151.4
279.9
423.6
21.9% 21.8% 21.6%
26.6% 26.1%
3Q07 2Q08 3Q08 9M07 9M08
EBITDA EBITDA Margin
+37%
2.8% 2.5%
4.0%
2.6%
5.6%
4.2% 3.8%
5.6%4.6%
7.6%
3Q07 4Q07 1Q08 2Q08 3Q08
Gen. & Admin. Expenses Selling Expenses
8.9%8.1%
6.7%
8.5%7.2%
10.7%
13.6%
11.3%12.1% 11.6%
3Q07 4Q07 1Q08 2Q08 3Q08
Gen. & Admin. Expenses Selling Expenses
28
Financial Results – in R$ million
Adjusted Net Income
+26%
Adjustment: net of the appreciation of Agra's shares in 2Q07 and 9M07.
90.0119.2
72.4
221.0
277.4
14.2%16.0% 20.6%21.7% 10.4%
3Q07 2Q08 3Q08 9M07 9M08
Adjusted Net Profit Adjusted Net Margin
-20%
29
Accounts Receivable
Accounts Receivable Evolution(R$ million)
Units under construction
Finished units
Construction Cost to be Realized
Remuneration of Receivables
Finished units: IGP-M + 12%Under construction: INCC
Schedule of Receivables (R$ million)
5,149
6,3666,886
4,607
3,206
1.3% 1.3% 1.4% 1.4% 1.4%
9M07 2007 3M08 1H08 9M08
Receivables 31-days overdue Receivables
+115%
6,388
4986,886
2,801
599
1,1871,372
845
473 437 391 352 313
917
2008 2009 2010 2011 2012 2013 2014 2015 2016 Up to2027
30
Liquidity
Debt(R$ million)
Balance on 09/30/2008 Maturity Cost
Debentures 1st issuance 500.0 2012, 2013, 2014 CDI + 0.48% p.a.
Debentures 2nd issuance 499.5 2018 CDI + 0.65% p.a.
Total Debt 999.5
Cash and Cash Equivalents (818.2)
Net Debt 181.3
Financing through SFH(R$ billion)
Net Debt
LTM EBITDA= 0.3 times
Operational financing through SFH not accounted for
3.1 0.6ContractedBalance Due
31
Appendix
Ineditto Clube Residencial (Living)São Bernardo do Campo, SP
Launched in June, 200873% sold until September, 2008
32
Cyrela Brazil Realty
*Adjusted for IPO expenses**Market caps as of Jan 22, 2009
EmployeesSeller Brokers & Team
Number of cities
Launches (Full Year)Pre-sales (Full Year)LandbankLow income units
Market Cap Cyrela Brazil Realty# Homebuilders listed
Market Cap of the Industry
Baixa RendaEBITDA Margin*Baixa RendaGross Margin
Baixa RendaNet Margin*
2005
202
100
3
R$ 1.2 bn
R$ 1.0 bn
3.0 mn sq.m.
0
R$ 2.4 bn
2
R$ 6.0 bn
524.427.1%
524.448.5%
524.423.2%
2007
529
743
47
R$ 5.4 bn
R$ 4.4 bn
8.8 mn sq.m.
6.7 thd
R$ 8.6 bn
21
R$ 48.1 bn
688.822.9%
688.841.2%
688.824.7%
2006
327
200
8
R$ 2.9 bn
R$ 1.9 bn
4.9 mn sq.m.
720
R$ 4.5 bn
4
R$ 10.0 bn
688.822.3%
688.842.2%
688.821.7%
9M08
~600
~700
55
R$ 4.0 bn
R$ 4.0 bn
11.1 mn sq.m.
9.5 thd
R$ 2.9 bn**
21
R$ 13.1 bn**
688.821.6%
688.841.5%
688.814.2%
33
Joint Ventures
2008Middle / Mid-HighSão Paulo50%
% CBR Region Segment Year
50% São Paulo Middle / Mid-High 2006
50% South All 2006
50% São Paulo Mid-High / Luxury 2007
50% MG and DF All 2007
50% Buenos Aires All 2007
50% São Paulo Economic / Super Economic 2007
75% São Paulo Economic / Super Economic 2007
79% São Paulo Economic / Super Economic 2006
34
70 Projects outside SP – RJ regionR$ 10.8 billion of PSV
(Cyrela’s stake: 59.0%)
Geographical Expansion
Barueri Belém Belford Roxo Belo Horizonte Cabo Frio Campinas Campos Canoas Caxias do Sul Caxias Cotia Curitiba Diadema Duque de Caxias Ferraz de Vasconcelos Florianópolis Fortaleza Goiânia GravataíGuarulhos Jacareí Jacarepaguá Joao Pessoa Jundiaí Lauro de Freitas Maceió Manaus Mogi das Cruzes Natal Niterói Nizia Floresta Nova Iguaçu Novo Hamburgo Palhoça ParnamirimPorto Alegre Praia Grande Recife Rezende Ribeirão Preto Rio de Janeiro Salvador Santo André São Bernardo São Caetano São Gonçalo São J. dos Campos São José do Rio Preto São Luis São Paulo São Sebastião Serra Sorocaba Vila Velha Vitória
Presence in 55 cities in 17 states of Brazil and Buenos Aires in Argentina
35
Cyrela’s Distinct Brands: Maximizing Exposure to Demand
These brands allow Cyrela to reach all sectors of the Brazilian housing market
• Core business : “Mid” to “High End” housing
• “Economic” and “Super Economic”projects to enhance company’s growth and explore opportunities
• Strong demand with income growth and a favorable population pyramid
• Strong demand powered by lower interest rates and longer terms of financing
Demand
Description
Typical Cycle
Average Gross Margin
Other Information
36 months24 months
~40%~35%
• Collections of 40-60% until the delivery of the units
• Performed receivables are indexed at IGP-M + 12% p.a.
• Collections of 20% of the PSV up to delivery of the units
• 80% of the PSV is assigned to banks which fully finance the customer
36
4 – 6 minimum wages
6 -12 minimum wages
R$ 55 thd
R$ 100 thd
R$ 200 thd
Super Economic
Economic
Unit Price per Family Income
Cyrela seeks for a leadership position in this segmentLIVING offers units starting at R$ 55 thousand
Growth Strategy on Economic Segment
Launched in the 2nd half of 2006, LIVING is already one of the largest players of this segment
37
History
Brazil Realty -Joint Venture with IRSA to develop and rent office properties (1994)
Brazil Realty IPO (1996)
First real estate development, mostly land
Cyrela was created in 1962 focusing on the residential development business
Partnership with RJZ to enter Rio de Janeiro market
Acquisition of IRSA stake in Brazil Realty
Merger of Cyrela and Brazil Realty
Public Offering
90s 2000 2002 200560s 2006
Acquisition of RJZ
New JointVentures
Follow on
Living (Economicsegment)
2007
Spin-off of RentalProperties(CCP)
Debenturesissued part I
38
Smart and Efficient Financial Management
Exchange agreements (80%) when acquiring land to reduce cash disbursements
Construction financed by customers
12% received before start of construction
47% received before delivery of the unit
More than 70% of units sold before start of construction
Use of SFH (1) funds (TR + 10% p.a.)
Customer financing of receivables at INCC (2)
Customer financing of remaining receivables at IGP-M + 12% p.a.(3)
Insignificant losses from default
Land
Construction
Post -delivery
(1) Brazilian mortgage financing system, reference rate index (TR) was 2.9% p.a. in 2005(2) Residential Construction Cost index(3) General market price index
39
Typical Cyrela Project
Pre-sales 0 50 70 90 100 10080 95
% Budget Costs - - 0% 40% 100% 100%20% 65%
Revenues - - 0 36 100 10016 62
Up to 100M18M 24M 30M 36M12M6M0M
Assumptions for this example:
Potential sales: R$125 million
Exchange agreements (land): R$25 million
Does not include financial revenues in customer financing
Collections(cumulative)
Construction
Launch Go-ahead Delivery Completionof payments
6M - 9MLicensing
- 7 14 28 50 10020 34
40
Typical Economic Project
Contracted Sales(cumulative) - 70 80 10090 100
%Construction Cost - - 23% 100%55% 100%
Revenues(cumulative) - - 19 10049 100
18M 24M Up to 28M12M6M0M
Assumptions for this example:Potential Sales: R$110 millionExchange agreements: 100% (R$10 mn), Unit price 80% financed by partner banksClient is fully financed by the banks after the assignment of the financing to them
Collections(cumulative)
Launch Go-ahead Delivery
6 – 9 monthsPre-Launching
- 6 11 2013 100
Financing
Construction
Shorter operating cycle: 24 months
41
Addressable Market Analysis
2005Conditions
Dec/2007Conditions
2008 +Low Income
Cheapest Unit Value Offered ('000 R$) 110 110 70Funding Rate (Nominal) 17.0% 11.4% 9.9%
Reference Tax (floating) 3.0% 0.9% 0.9%Spread 14.0% 10.5% 9.0%
(-) Expected Inflation 4.0% 3.0% 3.0%Funding Rate (Real) 13.0% 8.4% 6.9%# years 10 25 30Montly Instalment ('000 R$) 1.7 0.9 0.5% Household Income 33.3% 33.3% 33.3%Min. Monthly Income ('000 R$/month) 5.1 2.7 1.4Addressable Mkt (mn households) 5.2 11.7 22.61 Developers' entrance on the affordable segment has brought down the price of the cheapest unit offered.
1
Source: UBS Pactual
42
Financing: Interest and Term Impact
Model:Unit Value: R$ 120,000Loan-To-Value: 80%Loan: R$ 96,000Mortgage Effort: 30%
Example
Rental : R$800 per monthAnnual Yield: 8%
Equivalent to Loan Instalment with Real Interest Rate at 8% and 20 years
term.
Monthly Installment (R$)
Minimum Wages Required (monthly salary)
10 15 20 25 3012% 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
Loan Term (years)
Rea
l Int
eres
t Rat
e (%
)10 15 20 25 30
12% 13 11 10 10 911% 13 10 9 9 910% 12 10 9 8 89% 12 9 8 8 78% 11 9 8 7 77% 11 8 7 6 66% 10 8 7 6 55% 10 7 6 5 5R
eal I
nter
est R
ate
(%)
Loan Term (years)
43
Financial Statements
Dez AricanduvaSão Paulo, SP
Launched in September, 2008100% sold
44
Income Statement
Consistent Growth in Sales with Sustained Profitability
(1) Includes residential development revenues, rentals and services until 2006
R$ million
Margin %
Margin %
Growth %
Gross Profit
Income Taxes
Net Revenues(1)
EBITDA
Net Income
Minority Interest
Adjusted Net Income
CAGR
48.6%
57.4%
57.4%
81.7%
65.8%
2005
46.2%
22.9%
31.4%
318.6
(17.8)
688.8
157.7
127.8
(16.1)
153.6
2006
48.0%
22.3%
62.1%
471.5
(58.0)
1,116.7
248.5
242.3
(24.0)
263.1
2007
41.2%
22.9%
52.9%
703.2
(55.7)
1,707.3
390.5
422.1
(24.5)
422.1
2005 - 079M08
812.1
(81.1)
1,958.6
423.6
277.4
(33.5)
277.4
41.5%
21.6%
45
Consolidated Balance Sheet
R$ millionCash and Equivalents ReceivablesReal Estate in ST Inventory
Long term receivablesOther long term assets
TOTAL ASSETSST loans and financing
TOTAL LIABILITIES
Costs to complete projectsAccounts payable
Other Current Assets
Other current liabilitiesLT loans and financingOther LT liabilitiesMinority Interest
Permanent Assets
Shareholders’ Equity
2006558.2549.6787.2
299.0417.7
[ ][ ]
3,025.5
[ ][ ]
201.7
[ ][ ][ ][ ]
3,025.557.250.1
250.1286.167.5
265.6100.3
212.2
1,948.6
200595.5
190.3421.0
271.0556.6
[ ][ ]
1,775.3
[ ][ ]
129.0
[ ][ ][ ][ ]
1,775.395.125.277.1
205.9108.7166.078.5
111.9
1,018.8
2007682.8788.5
1,029.9
678.11,002.6
[ ][ ]
4,723.6
[ ][ ]
309.7
[ ][ ][ ][ ]
4,723.690.349.6
405.0376.6728.5804.0198.8
232.0
2,070.8
9M08818.2
1,374.81,519.7
884.3912.7
[ ][ ]
6,140.7
[ ][ ]
367.0
[ ][ ][ ][ ]
6,140.7255.8
-420.9439.9
1,506.3906.6262.1
264.0
2,349.7
46
Net Financial Debt
R$ million 2007
728.5
90.3
(682.9)
135.9
818.8
Long-term Debt
Short-term Debt
Cash & Cash Equivalents
Net Debt
Total Debt
9M08*
1,503.7
208.9
(818.2)
894.4
1,712.7
Net Debt of R$ 894.4 million as of September 30, 2008
2006
67.5
57.2
(560.6)
(435.9)
124.7
* Accounts for the principal debt due
47
IR Contact
Luis Largman Juliana De ZagottisCFO and IR Officer IR ManagerTelephone: (55 11) 4502-3153 Telephone: (55 11) 4502-3516ri@cyrela.com.br juliana.zagottis@cyrela.com.br
Cyrela Brazil Realty S.A. Empreendimentos e Participações
Av. Presidente Juscelino Kubitschek, 1.455, 3th floorSão Paulo - SP – BrazilZIP Code: 04543-011
www.cyrela.com.br/ir
Statements contained in this press release may contain information which is forward-looking and reflects management's current view and estimates of future economic circumstances, industry conditions, company performance and the financial results of Cyrela Brazil Realty. These are just projections and, as such, exclusively based on management's expectations of Cyrela Brazil Realty regarding future business and continuous access to capital to finance the Company's business plan. Such future considerations rely substantially on changes in market conditions, government rules, competitor's pressure, segment performance and the Brazilian economy, among other factors, in addition to the risks presented on the released documents filed by Cyrela Brazil Realty, and therefore can be modified without prior notice.
Cyrela Brazil Realty S.A. Empreendimentos e ParticipaçõesAv. Presidente Juscelino Kubitschek, 1455, 3th floor – Itaim Bibi – ZIP Code 04543-011 – São Paulo/SP – Brazil
www.cyrela.com.br/ir
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