First Quarter Earnings Conference Call. First Quarter 2007 Launches. Alphaville Campo Grande. Fit Jaçanã São paulo.

Transcription

1 First Quarter 2007 Earnings Conference Call First Quarter 2007 Launches Isla São Caetano ForestVille Salvador Reserva do Lago Goiania Olimpic São Paulo Acqua Nova Iguaçu Fit Jaçanã São paulo Alphaville Campo Grande Investor Relations Contact: Carlos Gros 1Q07 Earnings Conference Call São Paulo May 8th, PM (Brasilia Time), 11AM (US-ET) Phone: +1(973) Code: Webcast: 1

2 Overview of the 1Q07 Wilson Amaral Chief Executive Officer 2

3 Highlights of the Quarter Launches increased 87.1% y-o-y Launches increased to R$303.1 million in 1Q07 from R$162.0 million in Pre-sales increased 67.1% y-o-y Pre-sales increased to R$254.5 million in 1Q07 from R$152.3 million in Net Operating Revenues rose 69.6% y-o-y Net operating revenues increased to R$224.3 million in 1Q07 from R$132.2 million in 1Q07 EBITDA reached R$36.2 million (16.1% EBITDA margin) an 107.1% y-o-y The Backlog margin in 1Q07 reached 37.7% The backlog of results reached R$371.9 million in 1Q07, a 91.2% increase compared to the R$194.5million in Gafisa is the first Brazilian homebuilder to be listed on the New York Stock Exchange Entrance in five new markets: Goiania (Goias), São Caetano (São Paulo), Duque de Caxias (Rio de Janeiro), Nova Iguaçu (Rio de Janeiro) and Campo Grande (Mato Grosso do Sul) FIT Residencial and CEF signed an agreement to provide credit lines to finance up to 6,000 units FIT Residencial launched its first project in the neighborhood of Jaçanã in the city of São Paulo Bairro Novo: JV with Odebrecht will focus on large-scale projects for the Affordable Entry Level (AEL) market 3

4 Successful Follow-on Offering in March R$ 465 million cash injection Post-Offering Shareholder Structure 1 Proven track record in the Brazilian capital markets Submarino, ALL, Equatorial, Lupatech, among others Leading investor in real estate companies outside of the U.S. Portfolio includes Homex, Mexico s leading homebuilder Founded by Sam Zell Shareholders since the Alphaville acquisition, Alphaville completed in Shareholders January years of unique knowledge of the community development business in Brazil Float 7% 14% 2% 77% Independent Board Novo Mercado listing US GAAP reconciliation 100% tag along rights No poison pill Only Brazilian homebuilder listed on the NYSE Required to comply with Sarbanes-Oxley Audit, Compensation, Finance and Governance Committees Notes: 1 Excludes treasury stocks 4

5 Significant Growth in Mortgage Lending Mortgage Granted (R$ million) CAGR (%): 53% 24,0 +73% % 13,9 54% +34% 9,0 52% , % % % % % % Q07 March 06 March 07 Mortgage by Commercial Banks¹ CEF Mortgage Loans Mortgage by Commercial Banks¹ Sources: ABECIP, Central Bank ¹ Total mortgage lending using savings deposits funding (channeled-lending requirement). ² Of the R$14 billion estimated for 2006, R$9.4 billion were entailed to FGTS. 5

6 Gafisa Reports 87% Growth in Launches and 67% Growth in Pre-Sales Launches (R$ mm) Pre-sales (R$ mm) New Markets Rio de Janeiro Sao Paulo % 87% New Markets Rio de Janeiro São Paulo % 67% Q07 Launch mix breakdown 1Q07 1Q07 Pre-sales mix breakdown 1Q07 6% 11% MID AEL LOT 1% 48% 11% 7% 10% 23% HIG MHI MID AEL LOT COM 71% 83% Segmentation (Prices in R$/sq.m) HIG High Income: > 3,600 MHI Middle High: 2,800 < > 3,600 MID Middle Income: 2,000 < > 2,800 AEL Affordable entry level: 1,500 < > 2,000 COM Commercial LOT Urbanized lots R$150< >R$800 6

7 Consolidated National Footprint 74 projects under construction in 13 different States; Launches in 5 new markets 22 projects (VGV ~R$500 MM) delivered in 2006 and an expected 26 (VGV ~R$800 MM) in 2007 Campo Grande (MS) Goiânia (GO) São Caetano (SP) Nova Iguaçu (RJ) Duque de Caxias (RJ) Projects Under Construction 7

8 Maintaining a Diversified, High-Quality Land Bank Combination of AlphaVille s sizable Land Bank with Gafisa s strategic reserves Gafisa Potential Units Future Sales (R$000) % acquired by swap Sao Paulo 2, , % Rio de Janeiro 2, , % New Markets 7,615 1,480, % Gafisa Total 12,942 3,053, % AlphaVille Southeast 18,065 1,364, % Northeast 1, , % South 15,938 1,156, % AlphaVille Total 35,733 2,683, % Gafisa + AlphaVille 48,675 5,736, % ¹ As of 03/31/07 8

9 and Tapping New Opportunities FIT Residencial Household Breakdown by Income Segments 1,2 8.7 million households 3% 7% Middle and Mid-High Income segments 17% Affordable Entry-Level 70% Low Affordable Entry-Level Class A Class B Class C Class D / E Affordable Entry-Level Segment (AEL) New company, 100% owned by Gafisa Dedicated and focused management team Distinct brand: Primary target: outskirts of large metropolitan areas Five standardized products Mostly multi-story 200 / 300 units per development Replicated in high scale Unit price: US$25,000 US$65,000 First project launched in March: FIT Jaçanã Financing Total # of households 51.6 million Source: IBGE and Fundação João Pinheiro Notes: 1 Based on 2006 figures 2 Does not consider 2,8% of other households Primarily financed by CEF, a government agency, utilizing available and tested credit lines. On March 26th FIT and CEF signed an agreement to provide credit lines to finance up to units Up to 100% of the project No credit risk involved Low monthly installment (starting at US$200) 9

10 New Opportunities (cont.) Bairro Novo Household Breakdown by Income Segments 1,2 Low Affordable Entry-Level Segment (LAEL) 37 million households 3% 7% Middle and Mid-High Income segments 17% Affordable Entry-Level 70% Low Affordable Entry- Level Class A Class B Class C Class D / E JV between Gafisa and Odebrecht, Brazil s largest engineering and construction company Sole vehicle for both companies to operate in this segment Primary target: both metropolitan and rural areas Large scale AEL projects inspired by the Mexican real estate model Both multi-story and single-family Large areas: over 1,000 units per development Industrial scale construction method Unit price: < US$40,000 Why Odebrecht? Total # of households 51.6 million Source: IBGE and Fundação João Pinheiro Notes: 1 Based on 2006 figures 2 Does not consider 2,8% of other households Vast experience in implementing large urban infrastructure areas Know-how of implementing large scale real estate developments 10

11 Our Differentiations Industry Leadership and Strong Brand Recognition Professional Management and Established Organization World-class Shareholders and the Highest Standards of Corporate Governance Geographic Diversification Supported by Strategic Land Bank Growth Through Product Diversification 11

12 Financial and Operational Performance Duilio Calciolari Chief Financial Officer 12

13 1Q07: Operating Highlights Net Revenues (R$ mm) Gross Profit (R$ mm) 30.3% % % 92.4% 92.4% 68.0 Net Revenues 1Q07 Gross Profit 1Q07 Gross Margin EBITDA (R$ mm) Net Income¹ (R$ mm) 13.2% % % 9.5% 7.9% % 40.3% 1Q07 Q07 EBITDA EBITDA Margin Net Income Net Margin 13 1 Adjusted Net Income, before follow-on expenses

14 Productivity Indicators: SG&A SG&A / Net Revenues SG&A / Launches 14,3% 14,0% 34 bps 11,7% 130bps 10,4% SG&A / Net Revenues 1Q07 SG&A / Launches 1Q07 14

15 Revenues Reflect Previous Years Pre-Sales 1Q07 Pre-sales x Recognized Revenues (R$000) Developments Pre-Sales % of Pre-Sales Revenues % of Revenues Launched in 2007 Launched in , , % 51.2% 80.70% 63, % Launched in 2005 Launched in ,375 6, % 2.6% 109,353 35, % 15.9% 71.6% Launched up to , % 15, % Total 254, % 224, % 15

16 Strong Pre-Sales Performance Positively Impacted Backlogs R$371.9 million of results to be recognized (91% growth compared to ) Revenues and Results to be Recognized (R$ mm) 1Q07 (a) 4Q06 (b) (c) (a)/(c) % (a)/(b) % Sales to be Recognized % 24% Costs of Units Sold to be Recognized 1 (613.8) (497.5) (278.9) 120% 23% Results to be Recognized % 25% Margin to be Recognized 37.7% 37.4% % 1 In order to increase transparency and visibility of future earnings, during the fourth quarter ended December 31st 2006, the Company changed the accounting practice adopted with respect to the costs and earnings to be recognized in our backlog. 16

17 Strong Financial Position Gafisa is prepared to deliver on its aggressive growth strategy (R$ million) 1Q07 4Q06 Short Term Debt Long Term Debt Total Debt Cash and Cash Equivalents Net Debt (Net Cash) Shareholder s Equity Total Capitalization 621 (265) 1,424 1, (178) 788 1, ,109 Net Debt/ Equity -19% -23% 3.6% 17

18 Outlook for 2007 Launches Launches of R$1.65 billion => 60-65% increase over % (R$ 250 million) Gafisa s core busines 20% (R$ 200 million) Fit Residencial 20% (R$ 200 million) Alphaville EBITDA Margin Consolidated EBITDA margin of 15-16% 18

19 Safe-Harbor Statement We make forward-looking statements that are subject to risks and uncertainties. These statements are based on the beliefs and assumptions of our management, and on information currently available to us. Forward-looking statements include statements regarding our intent, belief or current expectations or that of our directors or executive officers. Forward-looking statements also include information concerning our possible or assumed future results of operations, as well as statements preceded by, followed by, or that include the words ''believes,'' ''may,'' ''will,'' ''continues,'' ''expects,' ''anticipates,'' ''intends,'' ''plans,'' ''estimates'' or similar expressions. Forward-looking statements are not guarantees of performance. They involve risks, uncertainties and assumptions because they relate to future events and therefore depend on circumstances that may or may not occur. Our future results and shareholder values may differ materially from those expressed in or suggested by these forward-looking statements. Many of the factors that will determine these results and values are beyond our ability to control or predict. 19