santander ceo conference - london

Download Santander CEO Conference - London

Post on 20-Jan-2017

85 views

Category:

Investor Relations

1 download

Embed Size (px)

TRANSCRIPT

  • 1

    Corporate Presentation

    Santander Latin American Conference May/11

  • 2

    Disclaimer

    This presentation may contain forward-looking statements. Such forward-looking statements are and will be subject tomany risks and uncertainties relating to factors that are beyond Direcionals ability to control or estimate precisely, suchas future market conditions, competitive environment, currency and inflation fluctuations, changes in governmental andregulatory policies and other factors relating to the operations of Direcional, which may cause actual future results ofDirecional to differ materially from those expressed or implied in such forward-looking statements

    You are cautioned not to place undue reliance on these forward-looking statements, which speak only as of the date ofthis presentation. Such forward-looking statements shall not be construed as guarantee of future performance.Direcional does not undertake to publicly review or update these forward-looking statements in view of events orcircumstances occurring after the date of this presentation

    This presentation does not constitute an offer, or invitation, or solicitation of an offer, to subscribe for or purchase anysecurities. Neither this presentation nor anything contained herein shall form the basis of any contract or commitmentwhatsoever

    This presentation and its contents are proprietary information and may not be reproduced or otherwise disseminated inwhole or in part without Direcionals prior written consent.

  • 652

    2,227

    5,359

    9,360

    12,364

    Start-up in 1981

    Development of projects

    focused on the low-

    income market

    Industrial projects acting

    as contractor to third

    parties

    Beginning of

    large scale

    developments

    for the low-

    income market

    Operations

    expansion to

    PA, RO and ES

    IPO 32% growth in units launched

    from the

    previous year

    57% growth in

    contracted PSV

    from the

    previous year

    3

    Over 30 Years of History

    A consistent track record and focus

    Source: Company Reports

    Units Launched

    Consolidation

    of a leading

    position in

    Manaus and

    Brasilia

    Establishment

    of own sales

    team

    Important geographic

    expansion: Braslia, Rio

    de Janeiro and Campinas

    1981 - 2005 2006 2007 2008 2009 2010 2011

    Capture

    significant

    market

    opportunities

    MCMV II

    Follow-on: $

    228.8 million for

    the Company

    Increasing

    liquidity

    PSV Launched (R$ mm)

    Whats Next?

    CAGR 06-10: 110%

    CAGR 06-10: 100%

    67

    176

    710783

    1,067

  • 4

    Management Team

    Ricardo Valadares Gontijo

    Chairman & CEO

    Ricardo Valadares Gontijo

    Chairman & CEO

    Founder, CEO and Chairman of the Board40 years of construction experience Civil Engineer graduated by UFMG with Gold Medal Award.

    Ricardo Ribeiro Gontijo

    Commercial Officer

    Ricardo Ribeiro Gontijo

    Commercial Officer

    Carlos Wollenweber

    CFO & IR Officer

    Carlos Wollenweber

    CFO & IR Officer

    Lucas Rocha

    Engineering Officer

    Lucas Rocha

    Engineering Officer

    Roberto Senna

    General Manager

    Roberto Senna

    General Manager

    Civil Engineer degree from The Universidade Federal da Bahia, MBA degree from FGV and specializationcourses at the Wharton School - University of Philadelphia, and University of Carlifornia - Irvine. Joined Odebrecht Group in 1979 and has held senior management positions in Brazil and abroad He was President of Metro-Rio, Director of Telemar Holding and member of the Board of severalcompanies of the group. He was CEO of Bairro Novo, a real estate subsidiary from Odebrecht Group, focused on residentialdevelopment and construction in the low income

    Ana Carolina Huss

    Human Resources Officer

    Ana Carolina Huss

    Human Resources Officer

    Board Member and responsible for Marketing, Sales and New BusinessCivil Engineer graduated by UFMG with the Gold Medal AwardJoined Direcional in 2004.

    Extensive experience in the Brazilian real estate market.From 2007 to 2009, Controller of BR PropertiesFrom 2005 to 2007, Financial Director of ValoraFrom 2001 to 2005, Financial Manager of GafisaElectrical Engineer graduated by PUC / SP has master degree in Economics and Finance at PUC / SP andMBA degree at MIT (Massachusetts Institute of Technology)

    Responsible for the engineering department with more than 30 years of experience in constructionHolds a bachelors degree in Civil EngineeringJoined Direcional in 1985

    Psychologist, graduated at University Paulista, MBA in Business Management, post graduate inKnowledge Management at FVG and certified in Bright Link in professional coaching Human Resources Manager at Natura Cosmticos and Accor Brasil Responsible for the department People and Organization of the Bairro Novo, a company of the Odebrechtgroup.

  • 5

    Shareholders Structure

    47.1% 15.0%

    FiladlphiaParticipaes S.A. 1

    Ridgecrest, LLCTarpon2 Other

    6.9% 24.4%

    GIC

    6.6%

    1. Holding owbed by Ricardo Valadares Gontijo and his family2. Funds managed by Tarpon Investimentos S.A.

  • 6

    Business Model

    6

  • Unique Footprint Strong footprint in markets with high growth potential, low

    competition and high barriers to entry

    Low competition in profitable markets

    Track Record in Operating in the

    Low Income

    Over 30 years of experience Solid track record in 0-3 minimum wages projects

    Low capital commitment, solid

    margins and high ROIC

    Focus on Large Scale Projects

    Verticalized Business Model

    Strong expertise in large scale ventures

    Own work force Performance-based compensation Standardized and industrialized production on-site

    Large scale operations in the low income

    segments, with strict cost control and high

    margins

    7

    Direcional: A Unique Business Model

    The best low-income player in Brazil

    Source: Company Report in the 4Q101. Annualized ROE: Annualized Quarters Net Profit / Average Shareholders' Equity in the same period

    The most profitable and efficient player in the low income

    sector

    Highest efficiency and profitability in the sector

    1st Annualized ROE among peers~25.8% of ROE

    ~22.6% of Net Margin1st Net margin among peers

    1

    2

    3

    4

  • 8

    Unique Footprint: High Growth Markets with Barriers to Entry

    Land Bank Composition Barriers to Entry

    Complex

    Logistics

    Detailed mapping of logistics and supply channels

    Large and vertically integrated projects

    Scarcity of

    Suppliers

    Industrialization of raw materials

    Vertically integrated model is rapidly replicated

    Adverse

    Weather

    Conditions

    Pre-manufactured building materials adapted to diverse climates

    Expertise in coordinating construction cycle and weather demands

    Direcional's Approach

    Unskilled

    Labor

    Highly-trained workers

    Standardized and fully-integrated construction

    Compensation based on performance

    1

    Direcional is the leading company in underpenetrated markets with high growth potential

    MINHA CASA, MINHA VIDA

    50.6k units elegible for the program

    74.2% of total Land bank

    Source: Company Report

  • 9

    Focus on Large Scale Projects

    Strong and unique expertise in large scale ventures

    Source: Company Report1. Projects with more than 1,000 units

    2

    Large Scale Projects

    Project StatusTotal of

    unitsUnits to belaunched

    Main Advantages of Scale

    Economies of Scale

    Industrialization process of raw materials

    Optimize construction processes

    Urbanized projects

    Licensed Projects

    Lower Execution Risk

    Lower Inflation Risk

    Manaus Total Ville AM Under construction

    Total Ville Bella Citt PA Under construction

    Total Ville Marab PA Under construction

    Allegro Residencial Club AM Under construction

    Setor Total Ville DF Under construction

    Total Ville Porto Velho RO Under construction

    Dream Park ES Under construction

    Eliza Miranda AM Under construction

    Cachoeiras do Madeira RO Under construction

    guas Claras DF Launching in 1H12

    Granjas Werneck MG Launching in 2H12

    Floramar MG Launching in 2H11

    Samambaia DF Launching in 2H12

    Projeto Maca RJ Under construction

    Stio So Joo MG Launching in 2H12

    Ferroeste MG Launching in 1H12

    Total

    78.2% of the units to be launched in large scale projects1

    16 projects with close to 65 thousand units

    3,640 2,136

    4,714 3,732

    5,604 4,664

    1,677 704

    4,672 2,064

    2,852 1,868

    1,034 752

    2,270 128

    1,278 426

    1,148 1,148

    15,000 15,000

    1,172 1,172

    14,614 14,614

    1,125 719

    2,500 2,500

    2,388 2,388

    65,688 54,015

  • 10

    Through a Verticalized Business Model

    More than 10,000 exclusive workers assuring quality, commitment, efficiency and cost control

    Verticalized Business Model

    Performance Based Compensation

    Capacity to Hire and Train Operational Team

    Lower Turnover

    Ability to Deliver

    3

    Best Execution in the SectorBest Execution in the Sector

    Construction DNAConstruction DNA

    On Schedule:Projects Delivered on Time

    With High Quality: Lower Ma