apresentação institucional 3 t13 eng
TRANSCRIPT
.
3rd Quarter, 2013
Institutional Presentation
Disclaimer
This presentation does not constitute an offer, or invitation, or solicitation of an offer to subscribe for or purchase
any securities neither does this presentation nor anything contained herein form the basis to any contract or
commitment whatsoever.
The material that follows contains general business information about LPS Brasil – Consultoria de Imóveis S.A
(“LPS”) as of September 30th, 2013. It is not intended to be relied upon as advice to potential investors. The
information does not purport to be complete and is in summary form. No reliance should be placed on the
accuracy, fairness, or completeness of the information presented herein and no representation or warranty,
express or implied, is made concerning the accuracy, fairness, or completeness of the information presented
herein.
This presentation contains statements that are forward-looking and are only predictions, not guarantees of
future performance. Investors are warned that these forward-looking statements are and will be subject to
many risks, uncertainties, and factors related to the operations and business environments of LPS and its
subsidiaries such as competitive pressures, the performance of the Brazilian economy and the industry, changes
on market conditions, among other factors disclosed in LPS filed disclosure documents. Such risks may cause the
actual results of the companies to be materially different from any future results expressed or implied in such
forward-looking statements.
LPS believes that based on information currently available to LPS management, the expectations and
assumptions reflected in the forward-looking statements are reasonable. Lastly, LPS expressly refuses any duty to
update any of the forward-looking statements contained herein.
2
Investment Highlights
3
Awards and recognitions | Recently
“The hearts of 96% of people
beat stronger for Lopes”
In research conducted in São Paulo, IBOPE Intelligence, revealed that1:
• 9 out of 10 residents of the city know the brand Lopes
• 96% would consider the brand when buying
• 67% had any contact with the company, and among these, 76% would recommend Lopes
The 200 best Brazilian companies | 2012 Época Negócios 360º Guide2
Evaluation of 6 scopes:
• Financial results
• HR Practices
• Governance
• Environmental
• Process of innovation
• Future vision
1) Survey conducted between Jul 26, 2012 and Aug 08, 2012. 2) October, 2012 issue. Preparation: Fundação Dom Cabral.
Ranking:
50º: Lopes
68º: Homebuilder
85º: Homebuilder
96º: Homebuilder
104º: Shopping Mall
117º: Homebuilder
Top of Mind IBOPE
4
Awards and recognitions| 2012
Master Imobiliário Award
Award organized by Sindicato da Habitação de São Paulo (Secovi-SP) and Federação Internacional
das Profissões Imobiliárias, suported by Grupo Estado
Lopes was awarded in the segment “Institucional” by 2011 Annual Report of the Brazilian Real Estate
Market
Top Imobiliário Award
Considered the main award of the real estate industry in Brazil
Lopes has been winning every Top Imobiliário since its first edition in 1993
Ranking Valor 1000
Listed by Valor Econômico as one of the 1000 largest business groups in Brazil
Highlighted as the 20th higher net margin among all groups
8th place in value generation among service companies
IG/ Insper Award
Assertive M&A strategy, expanding the business to other regions of the country
Lopes was considered the largest company in real estate brokerage and consulting in Brazil, in the last
five years
VII Award Relatório Bancário
CrediPronto! was awarded in the segment “Best Online File Management”
Highlight for the efficiency in the mortgage approval
5
Mr. Francisco Lopes
initiates his brokering
activities
1935 40´s
50´s 60´s
70´s 80´s
90´s 00´s
Launches one of
the first buildings
under the
condominium
concept
First TV
advertisement for
a real estate
development
Start of long term
partnership with
Gomes de Almeida
Fernandez (Gafisa)
Launch and sale of 14
office buildings at Av.
Paulista
Launch and sale of 11
office buildings at the Faria
Lima region
Creation of the launching
system with sales stands
and marketing materials,
attracting customers,
specially during weekends
Becomes a reference in
real estate launches and
presents its new logo
Identifies Marginal
Pinheiros as an attractive
area and launches one of
the first buildings in the
region
Starts up sales of hotel
condominium (Flats)
Partner of Grupo Espírito
Santo in the sale of one of
the largest launches in
Lisboa: Parque dos
Príncipes
Introduction of the
concept of condominium
clubs
First “Top Imobiliário”
award, in 1993 – Largest
Brokerage Company
Lopes becomes an important player at the
segment of gated communities
7 acquisitions in the primary market
Triples in size in a decade, strengthening its
leadership
Lopes’ IPO in 2006
Lopes starts its geographic expansion process
Lopes’ website become leader on real state
market
Joint Venture with Banco Itaú in order to
create CrediPronto!, our mortgage company
The company’s first
logo
The Brokerage Market Has No Other Company With Our History
and Track Record
2010s
6
More than 350 clients in the
primary market (homebuilders)
divided between listed and non-
listed companies
5 acquisitions in the primary
market and 13 acquisitions in the
secondary market
The secondary market has
become responsible for 25% of
total sales
Breakeven point of LPS Brasil’s
stake in Credipronto! in 4Q12
Credipronto! has reached
R$ 3.6 billion in average portfolio
balance in September 2013
Lopes’ follow-on
Asset Light with low
execution risk
Top management
team in industry Unique position
in primary
market
Unique
opportunity
to consolidate
the secondary
market
CrediPronto!,
Mortgage company,
with highest growth in
mortgage industry.
LPS Brasil
Investment Highlights
7
Joint Venture with Banco Itaú to
provide mortgage loans
Low, mid and high-income segments
Mortgage Loan Primary Market Secondary Market
Focus on secondary market, with a
unique model of own stores and a
network of licensed brokers
Growth through acquisitions
LPS Brasil: Unique Business Platform
+
Top vehicle to Invest in Brazilian Real Estate Market.
8
Management Team
Top Management Team in Industry
Partners & Associates
Summing up over 300
Years of Real Estate
Experience
Over 30 Partners & Associates with stock Investment and long term alignment with company
Retention / Incentive tool for Top Performing Employees
Partnership Program:
9
Asset Light
Service Based Business Model
Mortgage
Business
Brokerage
Business
Immediate simple revenue recognition
Asset light Yearly Investment = Depreciation Easy short term adjustment in
G&A, in case of a market downturn.
Asset light
Inexistence of physical offices (operates inside brokerage stores)
Mortgage portfolio generates recurring cashflow.
Primary
Market
Secondary
Market
10
Virtuous Cycle of the Business Model Creating Strong Barriers to Entry
Strong Established Base
Leading, nationally recognized brand
Present in 10 Brazilian States and in the
Federal District
Extensive distribution channel
Database with more than 2 million clients
More than 350 homebuilder clients
Wide Range of Products Solid Sales Performance
Total transactions closed of R$ 4.5 billion in
3Q13 and R$ 14.2 billion in 9M13, down 10%
from 3Q12, and up 2% from 9M12,
respectively.
CrediPronto! originated R$ 564 million in
3Q13 and R$ 5.0 billion since its creation in
2008.
Most visited website in the real estate
sector: more than 10 million visitors in 2012.
High Retention of Talent
Sales force of more than 15,500
independent brokers
Attracts and maintains its sales force
Leader in the primary market
One-stop-shop: unique and
complete solution for the client
: unique platform to
develop the secondary market
: partnership with one
of the largest retail banks in the
world, Itaú-Unibanco
11
Institutional Website
Source: Google Analytics,
Largest Website among Real Estate
Companies
Strong investment in online media
Strong Lead Generation
Higher sales conversion
• More than 10 million visitors in 2012
• iPhone and Android App. Mobile version.
• First brokerage company to launch an App for iPad
• 185k Properties listed
• 70k on the Primary Market and 115k on the Secondary
• 35-40% exclusive sales
Organic: 48%
Paid: 44%
Direct: 26%
LEADS www.lopes.com.br
12
Strong database of clients
More than 2.0
million
Sales Force
Home-builders
Online Lopes
Website POS
Media
Source: Lopes database - Lopesnet
• Over 2 million clients Database
• Online and offline client sources
• A structured CRM for serving clients
from different backgrounds
13
• Leader in social networks
• Approximately 1,000,000 Facebook fans
• High engagement level and spontaneous mentions
Viral Reach Talking about
Top of Mind: Lopes has been frequently mentioned among Real Estate Subjects
Total Reach Frequency per Unique User
14
LPS Brasil’s Market Mix
*Others: Northeast, Espírito Santo, and Minas Gerais.
56% 49% 50% 47% 47%
52% 51% 50% 50% 52% 54% 53% 48%
10% 19% 18% 24%
21%
25% 22% 21% 20%
20% 19% 21%
18%
9% 12%
9% 8%
7%
4%
4% 5% 4%
4% 4% 3%
4%
12% 10%
11% 12%
12%
10% 12% 12% 15% 13% 14% 14%
20%
12% 9% 12% 9% 13%
8% 12% 11% 11% 11% 10% 8% 10%
3Q10 4Q10 1Q11 2Q11 3Q11 4Q11 1Q12 2Q12 3Q12 4Q12 1Q13 2Q13 3Q13
São Paulo Rio de Janeiro Brasília South Others*
15
LPS Brasil’s total transactions closed
Transactions Closed
(R$ billion)
2.5 4.9
9.4 8.7
14.4 14.4 14.4
10.5 10.6
0.3
0.3
0.7 0.6
1.3
3.8 4.6
3.4 3.6
2006 2007 2008 2009 2010 2011 2012 9M12 9M13
Primary market Secondary market
18.2
2.8
5.2
10.1 9.3
15.7
19.0
16
14.2 13.9
LPS Brasil in the Primary Market
17
Market Intelligence
Brazil still represents a case for growth in the primary market
Launches by Market – Brazil – 2012
Source: LPS Brasil Market Intelligence
28.5
11.1
3.9 3.3 3.0 2.7 2.4 2.2 2.0 2.0 1.9 1.5 1.3 1.1 1.0 0.7 0.3
10.8
MR
SP
Gre
ate
r R
J
BH
DF
P.A
leg
re
Sa
lva
do
r
Fo
rta
leza
Sa
nto
s
Cu
ritib
a
Go
iân
ia
Re
cife
Flo
ria
nó
po
lis
Vitó
ria
Ca
mp
ina
s
Ma
na
us
Na
tal
Be
lém
Oth
ers
79.7 billion / 183 thousand units
Total Brazil
18
Growth 2007 - 2030
Demographic Bonus Population Pyramid (millions of people)
Social classes1 Population from 18 to 64 years old Number of Families by Income Segment (millions)
(8%) 78% 160% 233% 291% 433%
2009
2020e
Source: IBGE, Bird, Febraban and FGV 1) Source: PNAD/IBGE Preparation: Bradesco. Take into account RO, AC, AM, AP, PA and RR regions
31.7
15.5
8.4
3.3 1.1 0.3
29.1 27.6
21.8
11
4.3 1.6
Up to
R$1k
R$1k to
R$2k
R$2k to
R$4k
R$4k to
R$8k
R$8k to
R$16k
Above
R$ 16k
2007A
2030E
The demographic bonus, combined with economic growth, will lead 35.6 million people to move up from D and E
classes to A, B and C classes over the next 10 years. These families will certainly be seeking better living conditions.
Significant Creation of Demand
19
64%
36%
82%
18%
A, B and C classes D and E classes
56% 55% 55% 58%
60% 64%
68% 70% 69%
67% 63%
60%
0
50
100
150
200
250
1950 1960 1970 1980 1990 2000 2010 2020 2030 2040 2050 2060
Total Population (Million)
Economically active population = 15 – 64 years old
10% 5% 0% 5% 10%
0-4
10-14
20-24
30-34
40-44
50-54
60-64
70-74
80-84
90+
2010
10% 5% 0% 5% 10%
0-4
10-14
20-24
30-34
40-44
50-54
60-64
70-74
80-84
90+
2060
National footprint
Stake
(%)
Payment
(R$ million)
Stake
(%)
Payment
(R$ million)
São Paulo Campinas
100% 49.52
80% 13.82 São José dos
Campos
51% 10.21 51% 15.01
Rio de Janeiro Federal District
51% 60.52
51% 142.22
Espírito Santo Bahia
60% 11.32
Minas Gerais Ceará
60% 8.12
51% 5.51
Sul Pernambuco
100% 41.02 100% 4.12
51% 36.71
20
Lopes tracks developers’ regional movements, consolidates its position as the largest consulting and sales player
1) Considering the base scenario of the acquisition 2) Concluded Acquisitions
greenfield
greenfield
greenfield
greenfield
CE
PR
RJ
BA
SP
RS
ES
SC
MG
DF
CE
PE
Lopes tracks developers’ regional movements, consolidating its position as the largest consulting and sales player
HIGH
MEDIUM-HIGH
ECONOMIC
Sales Expertise in all Market Segments
Guarulhos/SP
Fatto Reserva Vila Rio – May/13
380 un. – R$ 4,100/m²
Location
Sales
74% sold.
Developer : Plano&Plano
CASE
São Paulo/SP
Habitarte – May/13
391 un. – R$ 11,486/m²
Location
Sales
100% sold.
Developer : Yuny / Stan
CASE
São Paulo/SP
Jardim das Perdizes – Mar/13
640 un. – R$ 8,200/ m²
Location
Sales
76% sold.
Developer : PDG / Tecnisa
CASE
21
BUSINESS UNITS Rio de Janeiro/RJ
Porto Atlântico – Mar/13
804 un. – R$ 15,382/m²
Location
Sales
100% sold.
Developer: Odebrecht
CASE
MEDIUM São Paulo/SP
Autêntico Mooca – Sep/13
125 un. – R$ 7,500/m²
Location
Sales
100% sold.
Developer : Even
CASE
Transactions Closed – Primary Market
(R$ billion)
2.5
4.9
9.4 8.7
14.4 14.4 14.4
10.5 10.6
2006 2007 2008 2009 2010 2011 2012 9M12 9M13
Transactions Closed – Primary Market
LPS Brasil took advantage of Listed Homebuilders growth through Capital raises. (equity + debt)
22
Primary Market Breakdown – Transactions Closed 3Q13
50% 44%
39% 32%
40%
50% 56%
61% 68%
60%
2010 2011 2012 3Q12 3Q13
Listed Non-Listed
26%
44%
30%
Limited exposure to large homebuilders
23
43%
28%
29%
Non-listed Homebuilders
Listed Homebuilders
Secondary market
53% 55% 64%
67% 65%
47% 45% 36%
33% 35%
2011 2012 1Q13 2Q13 3Q13
Other Homebuilders Top 10 Homebuilders in Sales
Breakdown Homebuilders
Breakdown Top 5 Homebuilders Breakdown – Homebuilders
10% 9% 7% 5% 6%
5% 7%
5% 5% 5%
5% 6%
5% 4% 5%
5% 5% 5% 4% 4%
4% 4% 4% 3% 4%
2011 2012 1Q13 2Q13 3Q13
1st 2nd 3rd 4th 5th
24
25
3Q13 Launches
3Q13 presented less launches than 3Q11, that was already seasonally weak
6.9
7.8
5.3
3Q11 3Q12 3Q13
Launches 3Q11 | 3Q12 | 3Q13
(R$ Billion)
(1.6)
(2.5)
26
Quarterly Concentration of Launches
Concentration of Launches
(%)
In line with the historical seasonality observed in the pipeline of launches, we believe in a strong turnaround of the volume of launches in 4Q13
10%
23%
22%
45%
12%
18%
26%
44%
15%
25%
15%
45% 4Q13E
4Q12
4Q11
3Q13
3Q12
3Q11
2Q13
2Q12
2Q11
1Q13
1Q12
1Q11
42%
1,480 1,680 1,710 1,860 2,120 2,450
2,770 3,160 3,170 3,380 3,290 3,550
3,930
5,300
6,750 7,330
8,160
8,960 9,100
1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 1Q13 2Q13 3Q13
Real Estate Market Overview – Prices
* Launches occurred in residential vertical in SP Capital Source: EMBRAESP
Evolution of Average Launches’ Prices in SP
27
Nominal
INCC Adjusted
R$/sq m
5,230 5,650 5,440 5,420 5,710 6,020 5,850 6,000
5,530 5,560 5,150 5,070 5,250
6,650
7,860 7,980 8,600
9,160 9,120
1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 1Q13 2Q13 3Q13
126
109
93
Ju
l-09
Au
g-0
9
Se
p-0
9
Oc
t-0
9
No
v-0
9
De
c-0
9
Ja
n-1
0
Fe
b-1
0
Ma
r-10
Ap
r-1
0
Ma
y-1
0
Ju
n-1
0
Ju
l-10
Au
g-1
0
Se
p-1
0
Oc
t-1
0
No
v-1
0
De
c-1
0
Ja
n-1
1
Fe
b-1
1
Ma
r-11
Ap
r-1
1
Ma
y-1
1
Ju
n-1
1
Au
g-1
1
Se
p-1
1
Oc
t-1
1
No
v-1
1
De
c-1
1
Ja
n-1
2
Fe
b-1
2
Ma
r-12
Ap
r-1
2
Ma
y-1
2
Ju
n-1
2
Ju
l-12
Au
g-1
2
Se
p-1
2
Oc
t-1
2
No
v-1
2
De
c-1
2
Ja
n-1
3
Fe
b-1
3
Ma
r-13
Ap
r-1
3
Ma
y-1
3
Ju
n-1
3
Ju
l-13
Au
g-1
3
Se
p-1
3
Expectation Index Lopes' Confidence Index Present Situation Index
(basis: jan/2009 = 100)
Source: Lopes Market Intelligence
Lopes’ Confidence Index (LCI)
Lopes is the first company to create a Real Estate Consumer Confidence Index.
Lopes’ Confidence Index intend to measure clients confidence, so Lopes can follow and anticipate, in the short
term, housing purchase tendency.
The sample has 524 interviews, with Grande São Paulo resident clients, which contacted Lopes in the last 3 months
and are interested in purchasing a new home.
Lopes’ Confidence Indexes (LCI)
28
The survey take into account
the opinion for the next 6
months about the situation of
Brazil’s economy, the financials
of household and the intention to acquire a property
The survey take into account
the current opinion about the
situation of Brazil’s economy,
the financials of household
and the intention to acquire a property
The survey take into account
the summation of the present
situation index and the expectation index
LPS Brasil in the Low Income Segment
29
HABITCASA: Focus on Low Income Segment
Focus on Low Income Segment
Units up to R$ 300 thousand
The Habitcasa brand is applied in all Lopes’ markets
30
34%
37%
19%
10%
5%
24%
26%
45%
7%
31%
28%
34%
27%
36%
22%
15%
3Q13
Number of Transactions Closed
Transactions Closed
15,061 units
Transactions Closed by Price Segment – Primary and Secondary Markets
R$ 5.0 billion R$ 4.5 billion
31
10,730 units
3Q12 3Q13
3Q12
LPS Brasil in the Secondary Market
32
Present in 10 States and the Federal District
– Covers 85% of the Brazilian GDP in 2010, combined 1
– 69 own stores
– 88 licensed brokers
– Strong presence in São Paulo and Rio de Janeiro
Unique one-stop-shop business model
Solid client base
Strong internet presence
Diversified products in the portfolio
Unique Platform Poised for Growth Well Defined Acquisition Model with a Successful Track
Record
Appreciation and alignment of interests
– Earn-out
– 51% ownership stake
Natural Consolidator
Potential synergies:
– Scale and reach: network effect
– Access to mortgage financing
– Expertise of LPS Brasil management
Pronto!: A Natural Consolidator
Acquisition strategy:
– Companies with expertise in their regional markets
– Companies with limited access to capital
– Well positioned in relevant markets
– Widespread network
Successful acquisitions through the years
– 19 acquisitions since July 2010 focused on the secondary market
– Benchmark for future partners
– Accretion
33 1 – Source: IBGE
Pronto!
Pronto has 157 stores in 10 States + Federal District : 69 owned stores and
88 licensed brokers
Acquisitions*
* Average of 40% in downpayment and 60% in earn outs linked performance 1) Considering the base scenario of the acquisition
Stake
(%)
Payment
(R$ million)
Stake
(%)
Payment
(R$ million)
51% 10.01 55% 25.61
51% 6.61 51% 17.31
60% 24.31 51% 15.51
60% 20.91 51% 7.11
51% 12.21 73% 2.61
60% 8.41
51% 4.91
34
Transactions Closed Historical in the Secondary Market
Transactions Closed – Secondary Market
( R$ billion)
0.3 0.3
0.7 0.6
1.3
3.8
4.6
3.4 3.6
11%
7% 7% 6% 8%
21%
24% 24% 26%
2006 2007 2008 2009 2010 2011 2012 9M12 9M13
Strong growth of Secondary Market in our transactions closed.
9M13 secondary sales reached 26% of total sales (R$ 3.6 billion)
.
Secondary Market Sales over
total Transactions Closed Secondary Market
Transactions Closed
35
CrediPronto!
36
Source: Abecip, Brazil Central Bank, Federal Reserve, Haver. Preparation: Goldman Sachs
Mortgage Market
Mortgage Market as a % of GDP | Brazil 2011, others 2010
85%
63% 63% 62% 61% 60%
52%
41% 36%
23% 22%
16%
10% 5% 5%
37
Growth Drivers
Housing deficit
– 7.2 million houses (2009)
Incipient mortgage loan market
Declining interest rates
Rising employees’ income
Growing availability of long-term funding
Increasing secondary market financing
Increasing family turnover
Market Potential for Real Estate Financing
Source: Bacen and ABECIP
Notes:
1 Data from 2006, except for Brazil (2009)
2 FGV’s Center for Social Studies, 2010
3 Represents the number of times a family moves to a different house during their lifetime. Source: Credit Suisse
Mortgage Loan Access (% by Social Class)2
7.7%
5.0%
3.0%
1.7%
Classes A and B Class C Class D Class E
4.0x
1.8x
9.0 – 10.0x
G-7 Mexico Brazil
Family Turnover3
5.4
6.7
7.9
6.3 5.8
1991 2000 2006 2007 2008
Quantitative Housing Shortage (millions of homes)
38
High Value Brands
Strengthening of mortgage origination and other related services.
Leadership position
in their respective
markets
Management
Excellence
Joint Venture Lopes-Itaú
Lopes and Itaú created the first and biggest pure mortgage company of Brazil.
Direct and exclusive access to its
customer database
Seamlessly integrated operation with
Lopes’ sales process, including an
incentive compensation plan
Lopes media exposure
Service excellence
Competitive financing terms and
conditions
Speed and quality of processing
Experienced credit analysis
Successful exposure to the lending
business and in joint ventures
39
Differentiated Model: One-Stop-Shop
Winning Model
Secondary Market: a significant potential for origination
69 own stores and 88 licensed real estate brokers in 10
States and the Federal District
Selective acquisitions to replicate the successful formula
used in the primary market
33% of Pronto!’s contracted sales are financed by
Credipronto!
Distinctive channel for clients in the secondary market
Over R$ 5.0 billion in financing
Incipient market in Brazil with huge expansion potential
50% of CrediPronto! transactions are originated through
Pronto!
Use of LPS Brasil’s platform and significant reduction in
CAPEX requirement
Focus
Relevance
Growth
Potential
Synergies
40
41
Volume of Origination
The Average Portfolio Balance in 3Q13 was R$ 3.6 billion.
362
564
3Q12 3Q13
Volume of origination accumulated1
178
5,053
jan/10 jun/13
2,492
3,688
Ending portfolio
balance 3Q12
Ending portfolio
balance 3Q13
Portfolio Balance
CrediPronto!
( R$ million) ( R$ million)
( R$ million)
1) Does not include amortization
Ending Portfolio Balance
CrediPronto!
(R$ MM)
The ending portfolio balance grew an average of 5.9% per month since jun/10 and it’s already R$ 3.7 billion.
42
517 707
881
1,162
1,454
1,756 1,989
2,266 2,492
2,771 2,986
3,328
3,688
sep
/10
de
c/1
0
ma
r/1
0
jun
/11
sep
/11
de
c/1
1
ma
r/1
2
jun
/12
sep
/12
de
c/1
2
ma
r/1
3
jun
/13
sep
/13
Credipronto!: Unique Partnership to Capture Mortgage Loan Market Potential
Evolution of Origination (base 100 = Jan-10)1
Business Highlights
Profit Sharing with limited credit risk
Leverage on LPS Brazil’s points of sale
Differentiated process of approval and release of funds
Unprecedented credit in the market
Innovative Real Estate Financing Process
1 ABECIP
2 Bacen
* Excluding Caixa
+ Market
Leader
Largest Private Bank
in Brazil Credit Analysis Assessment of
the PropertyLegal Analysis Issuance of the
Contract
Release ofResources
24 hoursUntil 3
workingdays
2 working
days
3 working
days
5 working
days
Efficiency in Release of Credit
Ranking of Real Estate Financing 3Q13 (R$ MM)
12,204
2,845
1,872 1,705 1,697
463
564
Caixa Itaú Banco do Brasil Bradesco Santander HSBC
8.5% Market Share* 20% of Itaú
43
100
168 177
245 241
376 411 432
370
433 416
506
438
610 648
125 145 147
144 179
209 198 189 209 243 251 245
334 340
1,4% 1,9% 1,7% 2,4% 2,4% 3,0% 2,8% 3,1% 2,8% 3,0% 2,4% 2,9% 2,5% 2,6% 2,7%
4,7% 5,8% 5,1%
6,1% 5,7% 7,3%
6,4% 6,8% 6,9% 7,4% 7,5% 8,5% 7,9% 8,5% 8,2%
-20,0%
-15,0%
-10,0%
-5,0%
0,0%
5,0%
10,0%
1T10 2T10 3T10 4T10 1T11 2T11 3T11 4T11 1T12 2T12 3T12 4T12 1T13 2T13 3T13
Credipronto! Mercado Market Share CDP! Market Share CDP!
(Bancos Privados)
1,456
High Growth Potential – Real Estate Financing equals only 5% of Brazilian GDP2
Operating Highlights
44
45
Operating Expenses
65.0
72.1
65.6
68.1
63.4
3Q12 4Q12 1Q13 2Q13 3Q13
Operating Expenses1 3Q13
(R$ MM)
1. Excludes costs and expenses of CrediPronto!
3Q13 represented a lower level of operating expenses
12,525
8,528
2,536
2,202
3Q12 3Q13
Primary market Secondary market
3,793 3,188
1,181
1,310
3Q12 3Q13
Primary market Secondary market
4,497
4,975
Transactions Closed
(R$ MM)
Transactions Closed
Number of Transactions Closed
Transactions Closed in 3Q13 decreased 10% when compared to 3Q12
46
15,061
10,730
Financial Highlights
47
108.8 104.8
- 24.0
3Q12 3Q13
128.8
25.5 17.8
- 19.2
3Q12 3Q13
37.0
(29%)
3Q13 Financial Highlights
Net Revenue
Net Income Attributable to Controlling
Shareholders before IFRS1
Net Margin (%)
1) We consider the net income adjusted by non cash IFRS 3 effects (Business Combination) the most accurate net income indicator.
2) Includes results from subsidiaries and companies under shared-control, in accordance with equity accounting, and results from non-controlling shareholders.
Note: EBITDA is not an accounting measure and does not represent the cash flow for the reported periods, and therefore should not be used as an alternative
to cash flow as a measure of liquidity. The Company’s EBITDA was calculated in accordance with CVM Instruction 52.
3) Non recurring: Partial recognition of the 2nd installment of CrediPronto's earnout, expenses related to CrediPronto's earnout and restructuring charge 48
(23%) (17%)
Non-recurring³
Earnout
(R$ MM)
(R$ MM)
42.3 38.2
- 21.9
3Q12 3Q13
60.2
(47%)
EBITDA2
EBITDA Margin (%)
Non-recurring³
(R$ MM)
(39%) (36%)
3Q13 Results
49
Lopes Net Commission
50
CrediPronto!
1 – Weighted average portfolio balance
• The numbers of the managerial P&L were audited for 2012 by Ernst&Young and, due to its managerial nature, it does not follow accounting standards.
P&L* 2012 (R$ thousand)
51
Total
Executed contracts 1,503,028
Opening portfolio 1,767,940
Closing portfolio 2,771,051
Average portfolio balance1 2,069,854
Financial Margin 46,655
% Spread 2.3%
(-) Sales taxes -3,756
(-) Total costs and expenses -58,099
(-) Backoffice Expenses -14,193
(-) Sales Expenses -20,383
(-) Commissions paid -14,574
(-) Insurance and claims (+/-) -1,091
(+) Other revenues (Financ.) 288
(-) ADA -8,146
(-) IRPJ/CSLL (Itaú Balance) -6,636
(=) Net result -21,836
% Net Margin -50.90%
50% Profit Sharing -10,918
(+) Retention of Commissions 2,972
CrediPronto! Result (LPS) -7,946
CrediPronto!
52
Breakeven Point CrediPronto!
1Q12
2Q12
3Q12
4Q12 -92
-2.375
-3.120
-2.359
-650
365 193
Oct, 12 Nov, 12 Dec, 12
CrediPronto! achieved breakeven point in November 2012, marking the moment the
operation became profitable
Allowance for Doubtful Accounts
Example of P&L with a financing contract for a $200 unit:
Ex: Sale for
$300
Ex: Sale for
$150
Month 8
$100
-$60
+$200
$240
Month 1
$100
-$60
-
$40
Month 2
$100
-$60
-$5
$35
Month 5
$100
-$60
-$25
$15
+$100: Profit for
the bank
-$50: Loss of the bank
Recovery of
Property
¹ Including general allowance
Default
Financial Margin
Expenses¹
Specific Allowance
Result
53
Sale of the
recovered
property
Additional Information
54
Lopes’ Contracted Sales Seasonality
* The seasonality can not be verified in 2008, because of the effects of the world financial crisis.
30%
Average of Historical
Seasonality of the
fourth quarter:
55
17% 18%
14%
23%
15%
19% 19% 21% 21%
31%
22%
32%
24% 25%
27%
26% 25% 22% 23%
29% 28% 26%
24%
26%
37%
29%
41%
16%
33% 30% 30% 27%
2005 2006 2007 2008* 2009 2010 2011 2012
1Q 2Q 3Q 4Q
Ownership Structure
Ownership Structure | September 2013
31.7%
22.8% 0.2%
45.3%
Rosediamond Chairman and Vice Chairman Management Free Float
56
Total of 114,381,766 common shares
Company Roadmap
Achieve dominant position in Secondary Market,
Growing from 26% to 40/50% of our Sales
Long Term Strategic Goals
Mantain Leadership in Primary Market
Grow the Mortgage Portfolio, achieving high
profitability levels
Develop other Opportunities tied to Services in
Real Estate Market.
57
