The document summarizes Gafisa's first quarter 2009 results conference call. Key highlights include:
- Pre-sales increased 11% year-over-year while launches decreased 72% due to the conservative approach to new projects.
- Net operating revenues rose 59% to R$542 million supported by the consolidation of Tenda. EBITDA increased 69% to R$108 million.
- Gafisa is well positioned to benefit from the new government housing program with two thirds of Tenda's business in the targeted affordable segment.
- The company has a strong financial position with over R$1.1 billion in cash and available credit lines to finance existing projects.
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1. First Quarter 2009 Results
Conference Call
Investor Relations Contact
Julia Freitas Forbes
ri@gafisa.com.br
1
2. Overview of 1Q09 Results
Financial and Operational Performance – Wilson Amaral, CEO
2
3. Highlights of the Quarter
1Q09 launches decreased 72% over 1Q08
Launches declined to R$160 million in 1Q09 from R$578 million in 1Q08
Pre-sales increased 11% from 1Q08
Pre-sales rose to R$558 million in 1Q09 from R$502 million in 1Q08
Net operating revenues rose 59% from 1Q08
Net operating revenues increased to R$542 million in 1Q09 from R$341 million in 1Q08
1Q09 EBITDA reached R$108 million (20% EBITDA margin), a 69% increase over 1Q08
Net income before minority interest and stock options increased to R$57 million in 1Q09, a 21%
increase from R$47 million in 1Q08
Gafisa consolidated its presence in affordable segment; Tenda s privileged position to benefit from the
Government Housing Package announced in March
In this quarter, Gafisa completed six projects totaling 578 units. Alphaville completed a project in
Gravataí-RS with 654 lots while Tenda completed 21 projects totaling 1,305 units.
3
4. Recent Developments
Government Housing Plan announced on late March and already showing results: “Minha
Casa, Minha Vida” comprises investments over R$30bn. Tenda is well positioned to benefit
from it with over two thirds of its current business concentrated in the targeted segment (one
to ten minimum wages)
Tenda completed a R$600 million debenture with Caixa Econômica Federal: receipt of net
proceeds took place in May and will serve to finance 81 existing projects, with a revolving
credit mechanism
Ceiling for units to be eligible to subsidized SFH loans raised from R$350K to R$500K, directly
benefitting Gafisa
Gafisa sold receivables of completed units with immediate net cash proceeds of R$ 70 million
2006 debenture covenant negotiation underway: the absolute covenant did not contemplate
the current size of the company – we are negotiating with bondholders
Gafisa agreed to transfer Cotia development to Tenda, which was originally part of the Bairro
Novo join venture with Odebrecht
4
5. Conservative Approach Towards Launches
1Q09 Launches (R$ million)
Other regions
Rio de Janeiro
São Paulo
Alphaville
14%
578
-72%
218
108
160
252 62
24
74
1Q08 1Q09
Gafisa 86%
5
6. Strong Pre-sales: significant inventory reduction
1Q Pre-sales (R$ million)
Other Regions
Rio de Janeiro
São Paulo
+11% 558
502
Tenda 46% Gafisa 48%
233
230
92
77
195 233
1Q08 1Q09 Alphaville
6%
6
7. Dedicated Management Teams for Each Market Segment, Product
Line
Mid, Mid High and High 60% owned by Gafisa 60% owned by Gafisa
60% owned by Gafisa Affordable Entry Level
Low 60% owned by Gafisa
Vertical High and High
Mid, Mid Mid High and High
Affordable Entry Level
Mid High and High Horizontal / Vertical
Vertical
Metropolitan areas Horizontal (lots) Metropolitan Areas and Horizontal / Vertical
Horizontal (lots)
Financing: Banksareas Outside Metropolitan Outskirts Metropolitan Areas and
Metropolitan
Areas Outside MetropolitanFinancing: CEF and BanksOutskirts
Unique Projects
Financing: Banks Areas Standardized Projects
Financing: Direct Financing: CEF and Banks
Unit Prices: > R$200K
Unique Projects Financing: Direct Unit Prices: R$50K –
Unique Projects R$200K Standardized Projects
Unique Projects
Unit Prices: > R$200K Unit prices: R$70K – Unit Prices: R$50K – R$200K
R$500K
Unit prices: R$70K –
Sales through own sales R$500K Sales in stores through own
force and brokers sales force - and brokers
Sales through own sales
force and brokers
7
8. One of the Most Geographically Diverse Homebuilders
188 projects under construction in 18 different states
*States where Gafisa or its subsidiaries already launched projects.
Projects worth R$ 406 million completed in the first quarter of 2009
Gafisa completed 6 developments valued at R$279 million, AlphaVille 1 development valued at R$32 million and
Tenda 21 developments or phases valued at R$ 95 million.
8
9. 71% of our inventory consists of developments launched but not
started or up to 30% completed
Completed units represent only 6% of the total PSV available for sales
Not Up to 30% 30% to 70% Over 70%
Completed Total
Started Completed Completed Completed
Gafisa 169 942 312 50 100 1,572
AlphaVille 9 67 27 58 38 199
Tenda 325 568 99 122 34 1,149
Total 503 1,577 438 230 172 2,920
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10. Diversified, High-Quality Land Bank Provides Strong
Platform for Growth
207 different sites, in 21 states
Future Sales
Potential Units Potential Units Swap Agreements
Segment % Gafisa
% Gafisa 100% %
R$ bn
Gafisa 18,800 22,298 7,589 40%
AlphaVille 21,845 40,623 3,178 98%
Tenda 67,578 70,116 6,324 20%
Total 108,223 133,036 17,091 76%
76% acquired by swap agreements.
Affordable entry level represents 62% of potential Gafisa units in land bank.
10
11. Overview of 1Q09 Results
Financial Performance – Duilio Calciolari, CFO and IR Officer
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12. 1Q09 Operating Highlights
Net Revenues (R$ million) Gross Profit (R$ million)
32.3%
28.5%
59%
40%
542 155
341 110
1Q08 1Q09 1Q08 1Q09
Net Revenues Gross Profit Gross Margin
EBITDA (R$ million) Net Income (R$ million)
20.0% 11.7%
18.8% -8% 6.8%
69%
46
108 40
37
64
1Q08 1Q09 1Q08 1Q09
EBITDA EBITDA Margin Net Income Net Margin
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13. Strong Pre-Sales Positively Impact Backlog of Revenues to Be
Recognized
R$1,0 billion of results to be recognized (66.6% growth compared to 1Q08)
1Q09 1Q08 4Q08 1Q09 x 1Q08 1Q09 x 4Q08
Sales to be recognized – end of period 3,011 1,726 2,997 74.5% 0.5%
Sales tax - 3.65% (110) (63) (109) 74.5% 0.5%
Net sales 2.901 1.663 2.888 74,5% 0,5%
Cost of units sold to be recognized – end of period (1,898) (1,061) (1,873) 79.0% 1.4%
Backlog of results to be recognized 1,003 602 1,015 66.6% -1.1%
Backlog margin - yet to be recognized 33.3% 34.9% 33.9% -158 bps -54 bps
13
14. Gafisa’s Operation
- Tenda´s consolidation as well as marketing and sales efforts impacted our SG&A ratios
- As top line growth improves with the significant opportunity in the affordable entry level, we
expect these ratios to also improve
1Q09 1Q08
Selling Expenses (R$ 000) 46,606 21,419
G&A Expenses (R$ 000) 55,918 36,085
SG&A Expenses (R $000) 102,524 57,504
Selling Expenses / Sales 8.3% 4.3%
G&A Expenses / Sales 10.0% 7.2%
SG&A / Sales 18.4% 11.4%
Selling Expenses / Revenues 8.6% 6.3%
G&A Expenses / Revenues 10.3% 10.6%
SG&A / Revenues 18.9% 16.9%
14
15. Strong Financial Position: consolidated cash position in May over
R$1.1 billion. Additionally, we have:
R$200 million in securitizable receivables.
R$3.4 billion in construction finance lines of credit provided by all of the major banks:
R$1.9 billion in signed contracts
R$458 million in contracts in process
R$1 billion additional availability
Cash-burn rate substantially lower than 4Q08
Proforma
1Q09 With R$600 MM 4Q08
Debenture
Total Debt 1,563 2,162 1,552
Total Cash 501 1,101 605
Obligation to Investors 300 300 300
Net Debt & Obligation to Investors 1,362 1,362 1,247
(Net Debt & Obligation to Investors) / (Equity + Minorities) 61.9% 61.9% 59.8%
Cash-burn rate 115 360
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16. DEBENTURES
2006 debenture covenant – net debt could not be over R$ 1 billion
Absolute covenant does not correspond to current size and equity position of
the Company (other covenants were based on relative metrics thus were not
impacted):
Position as of
2006 Debenture Covenant
March 31, 2009
(Total Debt – SFH financing – Cash) / Equity ≤ 0.75x 0.41x
(Total Receivables + Inventory of Completed Units) / Total Debt ≥
3.6x
2.0x
Total Debt – Cash < R$ 1 billion R$1.06 billion
Financial Statements June 30, 2006 March 31, 2009
Cash 422.8 500.8
Equity + Minorities 807.6 2,199.8
Total Assets 1,406.6 5,725.8
Equity / R$1 billion covenant 0.8x 2.2x
This covenant is under negotiation with debenture holders and does not
breach other financial obligations of the Company. The next assessment date is
June,2009
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17. SHARE LIQUIDITY
Volume (R$ MM) Price (GFSA3)
600 40
400 30
200 20
10
0 0
Feb-06
Aug-06
Sep-06
Dec-06
Aug-07
Dec-07
Aug-08
Nov-06
Feb-07
Nov-07
Feb-08
Sep-08
Nov-08
Feb-09
Jul-06
Jul-07
Jan-08
Jul-08
Jan-09
Jun-06
Jun-07
Jun-08
Apr-06
Oct-06
Apr-07
Oct-07
Oct-08
Apr-09
May-07
May-08
Mar-06
Mar-07
Mar-08
Mar-09
NYSE Listing: Gafisa is the only Brazilian real estate company listed in the United States.
Avg. daily volume from Apr 01 of 2008 - Apr 31 of 2009 (R$ MM) Market Cap (R$ MM )
80 3. 000
60 2. 250
40 1. 500
20 750
0 0
Invest Tur
Rodobens
Brascan
EZ Tec
MRV
Even
CCDI
CR2
Agra
JHSF
PDG
Inpar
Trisul
Lopes
Tenda
Abyara
Cyrela
Klabin
Rossi
Gafisa
Tecnisa
Gafisa´s average daily trading volume: R$63 million. (Apr 1st, 2008 – Apr 30, 2009)
Average Daily Turnover in the last 90 days over free float – 3.6%
17
18. Outlook for 2009
Based on current market outlook, we are providing the following full-year
guidance for sales and EBITDA margin:
- Consolidated Sales: between R$2.7 to R$3.2 billion (Gafisa 1.0-1.2 bn; Tenda
1.4-1.6 bn; Alphaville 0.3-0.4 bn)
- Consolidated EBITDA margin: between 16% to 17%
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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.
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