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Company PresentationJuly 2010
Grand Lider OlympusBelo Horizonte - MG
Contents
Brazilian Real Estate Sector Overview
Company Overview
Outlook for the Future
Operating Results
Company Overview
Living – Economic and Super Economic segments
Financial Results
Appendix
NovAmérica MichiganSão Paulo - SPLaunched in November 2009
BrazilianReal EstateReal Estate
Sector Overview
The Brazilian real estate market is posed to benefit from a favorable environment
A Booming Real Estate Market: Strong Fundamentals
The Brazilian real estate market is posed to benefit from a favorable environment
Low Supply of UnitsLow Supply of UnitsHigh Demand for HousingHigh Demand for Housing
3. Rising Housing Deficit(1)
Expanding the market for housing (Millions of housing Units)1. Population and families
In millionsPersons
Year
2007
2017E
2030E
Families
60.3
75.6
95.5
Population
189.1
211.2
233.6
Personsper family
3.1
2.8
2.4
5.46.7
5.6
(2)
4. Number of Home Moves per PersonLow number of home moves as compared to other countries
BrazilBrazil 1.8x1.8x
2. Monthly income evolution
2007 2030(E)
In millions of familiesGrowth rate(%) per year
1991 2000 2008(2)
BrazilBrazil
MexicoMexico
G-7G-7
1.8x1.8x
4.0x4.0x
9-10x9-10x
up to R$ 1,000
from R$ 1,000 to R$ 8,000
31.7
27.2
29.1
60.4
more than R$ 8,000
Total
1.4
60.3
5.9
95.5
-0.4%
3.9%
7.1%
2.0%
4
Cyrela is uniquely positioned to take advantage of the positive Brazilian real estate environment
(1) Considers demand in excess of supply.(2) 2008: considering new methodology.Source: IBGE (Brazilian Institute of Geography and Statistics), Brazilian Central Bank, Ministry of Cities, Fundaçāo Pinheiro, FactSet, Bloomberg, Fundação Getulio Vargas and Wall Street Research.
20052005 20092009Housing Deficit (2008)Housing Deficit (2008)
Impact for Cyrela: The future is now
> R$ 4,8005.7 mm families10%
Monthly Income
Monthly Income
20052005 20092009Housing Deficit (2008)Housing Deficit (2008)
0.1 mm
10 minimum
wages
Monthly Wages Housing Deficit
Incremental Demand (vs. 2005):+35.7 mm families
From R$1,200 to R$4,80022.4 mm families39%
> R$1,40041.4 mm families
67%
0.3 million
5 – 10
minimum
wages
3 - 5
~30 millionfamilies
< R$1,20029.3 mm families51%
< R$1,40020.4 mm families
33%
0.7 million
4.5 million
minimum
wages
< 3
minimum
wages
Minimum monthly family income to purchase a property
TR+14%10 years
families
TR+5% (1)
30 years
Cyrela’s Lowest
Ticket perunit available
Cyrela’s Lowest
Ticket perunit available
R$ 80,000.00R$ 110,000.00
5.6 million
R$ 80,000.00
5
Cyrela’s addressable market increased from 10% to 67%of the Brazilian population in the past years
Source: IBGE (Brazilian Institute of Geography and Statistics), CBCI, GV Consult and Santander, MCM Consultores
unit availableunit available
(1) Within Minha Casa Minha Vida Program
Brazilian Saving Accounts and Mortgage System
65%
53%
Uses
Individual mortgages100%
SourcesUses
65%
Individual mortgages
and construction
g gProperties up to R$
500,000
Construction loansAverage loan up to R$
500,000
SavingsAccountsDeposits
Cost ofSaving Accounts
(R$ billion)loans
30%
12%Properties over R$ 500,000
, Cost of TR + 6.17% p.a.
Monthly averageor last 12
months average
19 %
(R$ billion)
256.6
30% Compulsory
Deposits
5%
months average(the lowest)
215.8
6
5% Free Usage
Jan/09 Jan/10
Source: Santander
Scenario Jan/2010 Mortgage
Funding Analysis (SBPE)
R$ 169 bn
Scenario Jan/2010
Prescribed Use(R$ billion)
Actual Use(R$ billion)
R$ 169 bn
Mortgage outstanding 2013
86Remaining)
$
With 40% of annual growth in mortgage and 10% in saving
accounts, the funding
R$ 169 bn
LCIs, LHs
R$ 230 bn
20
63
20Commitedloans
Mortgage outstanding
, gwill last for 4 years
Earmarked
resources149
ScenarioMortgage
outstandingSaving
outstanding
Mortgageoutstanding
(R$ bn )Year
1 60% 20% 262 Jan-2013
7Source: Santander(1) FCVS, default and multipliers.
2 40% 10% 230 Nov-2013
3 40% 17% 331 Dec-2014
4 20% 0% 167 May-2015
Mortgage Loans Funding (R$ bn)Mortgage Loans Funding (R$ bn)Perspective of Real Income GrowthPerspective of Real Income Growth
Cyrela: ready for growth
Mortgage Loans Funding (R$ bn)Mortgage Loans Funding (R$ bn)Perspective of Real Income GrowthPerspective of Real Income Growth
GDP growth p.a.
-3% 0% 3% 5% 7%10.5
25 2
40.6
51.0
17.0
68.0
18.0
3% 0% 3% 5% 7%2008 3.4% 3.4% 3.4% 3.4% 3.4%2009 3.4% 3.4% 3.4% 3.4% 3.4%2010 0.5% 1.3% 2.1% 2.6% 2.8%2011 -1.7% 0.3% 2.2% 3.5% 4.2%2012 -2.2% 0.1% 2.3% 3.8% 4.5% 1.9 1.9 1.8 2.2 3.0 4.9
9.318.3
30.0 34.0
3.3 2.7 3 2.8 3.95.5
7.0
6.9
5.2 4.6 4.8 5.06.9
10.4
16.3
25.2
2000 2001 2002 2003 2004 2005 2006 2007 2008 2009
50.0
2010e
Middle income class growthMiddle income class growthBrazilian population (millions of inhabitants)Brazilian population (millions of inhabitants)
SBPE FGTSSource: CEF and AbecipSource: MCM Consultores
Jan-04 Mar-10 ChgTotal Population 181.6 193.2 High income class (A) 6.1 9.3 +3.2mm
Upper middle income class (B) 7.4 10.9 +3.5mm
Middle income class (C) 70.9 98.2 +27.3mm
Lower middle income class (D) 33 7 39 7 +6 0mmHigh income
class (A)3 4%
Upper middle income class (B)
4,1%
Middle income class (C )
39,1%
Lower middle income class (D)
18,6%
Low income Hi h i l
Upper middle income class (B)
5,6%
Middle income class (C )
50,8%
Lower middle income class
(D)20 5%Low income
8
Source: IBGE
Jan/04 Mar/10
Lower middle income class (D) 33.7 39.7 +6.0mm
Low income class (E) 63.6 35.0 -28.6mm
Source: IBGE
3,4% Low income class (E)
35,0%
High income class (A)
4,8%
20,5%Low income class (E)
18,1%
0.6% p.a. -0.02% p.a.Millions of inhabitants
Brazilian population - estimates
1.9% p.a.
% pMillions of inhabitants
9.3
12.819.1 28.9 38.4
48.9
118 6
171.3
191.5
207.1 216.4 219.1 215.3
68.5
111.0128.8 146.4 150.8 148.0
138.1
4.8
118.6
45.3 51.0 49.9 41.6 36.8 32.6 28.3
1980 2000 2009 2020 2030 2040 2050
0 - 14 years old 15 - 64 years old 65 years old or more
Source: IBGE
Population (millions of inhabitants)
2009 2030
Australia 22 24
9
Canada 34 40
New Zealand 4.3 5.2
Brazil 191.5 216.4
Source: IBGE , UN
Ventura Clube de MorarPorto Alegre- RSLaunched in November 2009
CompanyCompanyOverview
Units DeliveredUnits Delivered
Prospects of strong growth with unique track record
Forecasted
Historical (until 2009)
7 661
17,000 – 21,00050 years of history
15 diff t i d d t7,510
2,211 3,178
7,661
2007 2008 2009 2010eConstructed Area per YearConstructed Area per Year
15 different independent
construction platforms in 66 cities
Private area in thousands of sq.m.
ForecastedHistorical
Constructed Area per YearConstructed Area per Year
Around 8,000
372594
1,002
1,6552,186
More than100
Around 8,000employees
11Source: Company data
232 372
2005 2006 2007 2008 2009 2010e
thousand costumers
Outstanding track-record with unique positioning to capture growth opportunities
Presence in 66 cities in 16 states of Brazil, Buenos Aires in Argentina and Montevideo in Uruguay
Geographical Expansion
Presence in 66 cities in 16 states of Brazil, Buenos Aires in Argentina and Montevideo in Uruguay
Living is present in 47 cities and 12 states
200920092006200620052005
MG
GO
MT
AC
AM
RR
ROBA
PI
MAPA
AP
TO
CE
RN
PE
AL
SE
S ES
DF
PB
MG
GO
MT
AC
AM
RR
RO
BA
PI
MAPA
AP
TO
CE
RN
PE
AL
SE
S ES
DF
PB
MG
GO
MT
AC
AM
RR
RO
BA
PI
MAPA
AP
TO
CE
RN
PE
AL
SE
S ES
DF
PB
RS
SC
PR
SP
MS
RJ
ES
BuenosAires
RS
SC
PR
SP
MS
RJ
ES
RS
SC
PR
SP
MS
RJ
ES
+ +
12
% ofBrazilian
GDP Covered
% ofBrazilian
GDP Covered
(1) Considers 2007 data, most recent.Source: Company and IBGE.
90.5%(1)80.5% 47.9%
Cyrela Brazil Realty
2005 20072006 2008 2009
Launches
Pre-sales
2005
R$ 1.2 bn
R$ 1.0 bn
2007
R$ 5.4 bn
R$ 4.4 bn
2006
R$ 2.9 bn
R$ 1.9 bn
2008
R$ 5.5 bn
R$ 5.1 bn
2009
R$ 5.7 bn
R$ 5.2 bn
Landbank
Low income units launched
Gross Margin*
3.0 mm sq.m.
0
48.5%
8.8 mm sq.m.
6.7 thd
41.2%
4.9 mm sq.m.
720
42.2%
11.2 mm sq.m.
11.1 thd
12.6 mm sq.m.
16.1 thd
38.0% 34.5%
# Homebuilders listed
EBITDA Margin*
Net Margin*
2
27.1%
23.2%
21
22.9%
24.7%
4
22.3%
21.7%
20 18
16.5%
9.8%
22.3%
17.8%
Number of cities
Market Cap Cyrela**
Market Cap of the Industry
3
R$ 2.4 bn
R$ 6.0 bn
47
R$ 8.6 bn
R$ 48.1 bn
8
R$ 4.5 bn
R$ 10.0 bn
55
R$ 3.3 bn
R$ 13.4 bn
66
R$ 10.4 bn
R$ 51.6 bn
13
1,265
946
*Adjusted for IPO expenses and according to BR GAAP before Law 11,638 until 2007.
Employees
Seller Brokers & Team
202
100
529
743
327
200
514
637
** On December 31, of each year.
Stock Market – CYRE3
Ownership Breakdown Stock Performance*Ownership Breakdown(05/31/2010)
Stock Performance
200
250
300
350
400
Others51.7%
Black Rock Inc.5.6%
Carmignac
-
50
100
150
200
Sep
-05
No
v-05
Jan
-06
Mar
-06
May
-06
Jul-
06
Sep
-06
No
v-06
Jan
-07
Mar
-07
May
-07
Jul-
07
Sep
-07
No
v-07
Jan
-08
Mar
-08
May
-08
Jul-
08
Sep
-08
No
v-08
Jan
-09
Mar
-09
May
-09
Jul-
09
Sep
-09
No
v-09
Jan
-10
Mar
-10
May
-10
Gestion7.8%
Free Float: 64.8%
* Adjusted data by paid dividends
S N J M M S N J M M S N J M M S N J M M S N J M M
Cyrela IbovespaControlling
Group34.9%
Paid Dividends
Payment date Action CYRE3 Dividend yield(R$/share) 154% growth in
14
(R$/share)5/11/2010 (-) Paid dividend 0.4703 2.24%5/11/2009 (-) Paid dividend 0.1854 0.87%5/16/2008 (-) Paid dividend 0.0410 0.19%9/25/2007 (-) Paid dividend 0.1687 0.80%5/10/2007 (-) Paid dividend 0.0852 0.40%
154% growth in the last year
CEO Salvador ShoppingSalvador - BALaunched in September 2009
Outlook for theFuture:Cyrela’s
Revised Plan
Guidance 2010 - 2012Xxxx
Launches and Sales for 2010 - 2012
Guidance 2010 2011 2012
Launches (R$ billion)
6.9 to 7.7 8.3 to 9.1 10.5 to 11.5
Sales (R$ billion)
6.2 to 6.9 7.6 to 8.4 9.7 to 10.7
Margins over net revenuefor 2010 - 2012
Living’s stake
% Cyrela 73% a 77% > 75% > 75%
for 2010 - 2012
2010 from 35% to 40%
% LivingGross margin 33% to 37%
EBITDA margin 20% to 24%N t i 14% t 16%
16
2011 from 40% to 45%
2012 from 45% to 50%
Net margin 14% to 16%
Landbank Analysis – Acquisition of Land
Cyrela’s Landbank Maturity to Cyrela’s Landbank Maturity to Living’s Landbank Maturity Living’s Landbank Maturity y yLaunch (R$ million)
y yLaunch (R$ million)
g yto Launch (100% stake - R$ million)1
g yto Launch (100% stake - R$ million)1
16.900
16,900
11,5002,900 3,274
4,085
5,409
5,750
809
7,7004,859
9,100
9,620
1,8072,400
1,807500
2009 2010E 2011E 2012E Post 2012
800
821 341
Mid-High Income Landbank Maturityto Launch (100% stake - R$ million)1
Mid-High Income Landbank Maturityto Launch (100% stake - R$ million)1
6,891
809
5,678
4,800
16,100
1 585
5,0054,211
5,750
5,678
2009 2010E 2011E 2012E Post 2012
4,241
1,8803,871
4,491
3093,871
1,585
3,420
1,539
17(1) Potential PSV, 100%
Existing Landbank Incremental Purchases 2009 2010E 2011E 2012E Post 2012
Cyrela’s Investment Plan
Sources (R$ million)Sources (R$ million)Uses (R$ million)Uses (R$ million)
1,000850700
1,000
2,500
900
2,5001,000
2,5001,150
2,500
900
600
Working capital Cost of Cost of Total
300
350
Sale of Bond Follow on Other Total
300
350
600
18
Working capital Cost ofLandbank (Low
Income)
Cost ofLandbank (Mid-High Income)
Total Sale ofstake in
Agra
BondOffering
Follow-onOffering
OtherFinancing
Total
Mais São CristovãoRio de Janeiro - RJLaunched in November 2009
Cyrela and LivingOperating resultsOperating results
Q t l f l h d l til 2Q10
Launches and Sales Cyrela and Living
Quarterly pace of launches and sales until 2Q10
1H10 launches reached 24% of the 2010 launches guidance announced (mid range) and
sales reached 40%
Launches Sales
100% 100%
48%
60%
82%
100%
55%
24%40%50%60%70%80%90%
100%
49%
65%
88%
57%
100%
40%40%50%60%70%80%90%
100%
5% 18%
48%
15%9%
21%
8%
0%10%20%30%40%
1Q 2Q 3Q 4Q
2007 2008 2009 2010
9%25%
49%23%
10%
26%16%
0%10%20%30%40%
1Q 2Q 3Q 4Q
2007 2008 2009 2010
20
Cyrela and Living Operating Results Preview
S l
1,723.8
Launches(R$ million)
Sales (R$ million)
628.5
2,605.7
1,275.7154 4
333.4 292.2
448.1
644.3
1,127.5 1,198.2
1,977.2
431.7 369.7
839.8
1,539.91,341.6
489.9794.1 906.0
,154.4
2Q09 2Q10 1H09 1H10
C rela Partners
626.0 1,108.2 971.9
213.8
2Q09 2Q10 1H09 1H10
Cyrela PartnersCyrela Partners
Inventories sales reached 56.1% of sales in 2Q10
60 0% of 2Q10 and 64 5% of 1H10 launches were sold by 2Q10
21
60.0% of 2Q10 and 64.5% of 1H10 launches were sold by 2Q10
Living Operating Results Preview
Launches SalesLaunches(R$ million)
Sales (R$ million)
720.2 845.9
499.653 3
133.3 98.3
220.6
233.4
396.5 366.2
608.0133.3
108.2
237.9
245.5
434.4 367.6
180.0263.2 267.9
53.3
2Q09 2Q10 1H09 1H10
180.2301.1 259.4
65.3
2Q09 2Q10 1H09 1H10
Living Partners Living Partners
Living represented 41.8% of launches and 32.5% of sales in 1H10
f % f “ C
22
In 1H10, 3,241 of 5,686 or 57.0% units launched were eligible for the “Minha Casa, Minha Vida”
program
Launches and Sales Cyrela and Living
15 j t l h d i 1Q1015 projects launched in 1Q10
LIVING: 54.3% of PSV launched in 1Q10
73.3% of sales in 1Q10 are related to inventories
Launches(R$ million)
Sales (R$ million)
CAGR 05 09 47 1% CAGR 05 09 50 4%CAGR 05-09 = 47,1% CAGR 05-09 = 50,4%
4,392
5,144 5,241 5,393 5,453 5,679
755.01,368.8
2,815.53,458.0
4,088.0
350.9869.0
1,023
1,915
510 1,066
1,004.21,924.4
3,332.33,783.6
4,464.8
416.1 481.6
1,211
2,917
554.0 596.3
23
2005 2006 2007 2008 2009 1Q09 1Q10
Cyrela Partners
2005 2006 2007 2008 2009 1Q09 1Q10
Cyrela Partners
Sales Speed Cyrela and Living
C l d Li iCyrela and Living
49%
39%
30%
31%
6%
9% 5%1%
88%
85%
2Q09
1Q09
3%
48%
59%
52%
13%
20% 8%
72%
81%
1Q10
4Q09
3Q09
Cyrela Living
In 3 months In 6 months In 9 months In 12 months In 15 months
49%
49%
53%
40%
11%
19%
26%
26%
8%
5%
11%
3%
6% 1%
60%
77%
88%
84%
4Q09
3Q09
2Q09
1Q09
74%
61%
41%
35%
16%
24%
37%
50%
8%
7%
2%
2%
90%
92%
87%
86%
4Q09
3Q09
2Q09
1Q09
24
44%1Q10
In 3 months In 6 months In 9 months In 12 months In 15 months
51%1Q10
In 3 months In 6 months In 9 months In 12 months In 15 months
Sales Speed Cyrela + Living
Sales over Supply (VSO)Contracted Sales and Sales of Inventory
Inventories in March/10: R$ 3.2 bn (10%) and R$ 2.4 bn (%CBR) 6 months of sales*
65.1%
66.8%60.7%
52.4%
61.5% 62.4%
37.8%
73.3%
21.9%
32.1%37.6%
25.4%728.9
616.5
828.9
1,052.0
1,940.9
1,052.5 839.8
1,630.9
2,268.5
1,065.8
37.6% 36.5%
2Q09 3Q09 4Q09 1Q10 12M
349.4
1,212.0
414.1 269.6 185.5 315.8
1,014.4 1,439.7
284.2
702.6 638.4
296.5 296.4 524.0 781.5 566.1 481.9
1Q08 2Q08 3Q08 4Q08 1Q09 2Q09 3Q09 4Q09 1Q10
Sales of Launches Sales of Inventory % Sales of Inventory
25* Considering the calculated monthly pre – sales guidance mid range
LandbankRegion breakdown
R$ 39 1 billion of PSV (R$ 32 5 billion %CBR)São Paulo
30%
N th
South+Arg+
Urug7%
R$ 39.1 billion of PSV (R$ 32.5 billion %CBR)
R$ 5.2 billion acquired after the Follow - On
73 % paid through swaps
26% up to R$ 130 thd 74% up to R$ 500 thd
RJ37%
Southeast others
Northeast19%
North4%
202 projects with 150 thousand units
others2%
38,669
42,227 10,951
10,907 7,330 970 150,161
80 000
100,000
120,000
140,000
160,000
16,959
22,148
-
20,000
40,000
60,000
80,000
26
Up toR$ 100 thd
From R$ 100 thd
to R$ 130 thd
From R$ 130 thd
to R$ 200 thd
From R$ 200 thd
to R$ 350 thd
From R$ 350 thd
to R$ 500 thd
From R$ 500 thd
to R$ 600 thd
From R$ 600 thd
to R$ 1,200
thd
Above R$ 1,200 thd
Total
Liber bosque Pirituba São Paulo - SPLaunched in January 2010
Living Economic and Super Economic segmentEconomic segment
Li i 54 3% f PSV l h d d 38 6% f PSV ld i 1Q10
Living’s Launches
Living: 54.3% of PSV launched and 38.6% of PSV sold in 1Q10
9 projects launched in 1Q10 with 2.4 thd units of which 918 units within “MCMV” program
Launches(R$ million)
Sales(R$ million)
CAGR 05 09 177 2% CAGR 05 09 240 3%
1,499.0
1,806.6
CAGR 05-09 = 177.2% CAGR 05-09 = 240.3%
1,350.6
1,726.4
602.1
1,039.41,323.7
87.9236.5
84.8
883.5
132.8 323.7
442.6
919.71,250.3
79.2306.943.8
641.1
122.1 411.5
2006 2007 2008 2009 1Q09 1Q10
28
2006 2007 2008 2009 1Q09 1Q10
Living Partners
2006 2007 2008 2009 1Q09 1Q10
Living Parceiros
Living’s Landbank
4 plots of land acquired with a potential PSV of R$ 682 3 million4 plots of land acquired with a potential PSV of R$ 682.3 million
Potential PSV: R$ 7.5 billion (100%) and R$ 6.1 billion (% Living)
89 plots of land of which 68% paid through swaps
U it’ i R$ 120 6 thd
Landbank by unit price
Unit’s average price - R$ 120.6 thd
Region breakdowng
22 358
22,465 61,782
50,000
60,000
70,000 São Paulo
49%
16,959
22,358
10,000
20,000
30,000
40,000
RJ18%
South
Northeast9%
29
-
Up toR$ 100 thd
From R$ 100 thd to
R$ 130 thd
From R$ 130 thd to
R$ 200 thd
Total
Southeast others
6%
South18%
Low-Income Segment: Renewed Growth Opportunity
Minha Casa Minha Vida program : Potential demand growth in BrazilMinha Casa, Minha Vida program : Potential demand growth in Brazil
Low mortgage rates + incentives = high affordability levels
Monthly rent vs. mortgage payment already in tandem
Purchase Power – Impact of Minha Casa, Minha Vida ProgramPurchase Power – Impact of Minha Casa, Minha Vida Program
Before the Program Post-Program
71 32081,382
93,291
105,199
117,107
78,800
90,400 92,700 93,30984,735
97,122
109,509
121,896
57,08364,505
59,104
71,320
3MW 4MW 5MW 6MW 7MW 8MW 9MW 10MW
Effective
419 558 698 837 977 1,116 1,256 1,395Max monthly
installment(R$)
30Source: IBGE (Brazilian Institute of Geography and Statistics) and Company data
Minha Casa, Minha Vida program enables millions of families to purchase houses
rate(p.a.)
5.12% 5.12% 5.12% 6.12% 8.47% 8.47% 8.47% 8.47%
Economic Segment : Sector’s Outlook
7 MW3 MW3 MW 4 MW4 MW 5 MW5 MW 6 MW6 MW 8 MW8 MW 9 MW9 MW 10 MW10 MW7 MW
1,3951,395 1,8601,860 2,3252,325 2,7902,790 3,7203,720 4,1854,185 4,6504,650
419419 558558 698698 837837 1,1161,116 1,2561,256 1,3951,395
5.12%5.12% 5.12%5.12% 5.12%8.47% 6.17%8.47% 8.47%8.47% 8.47%8.47% 8.47%8.47%
Minimum wage (R$)
Max Installment - 30% (R$)
Effective Rate (p.a.)
3,255
977
8.47%
3,255
977
8.47%
300300 300240 240240 240240 240240 240240 240240
90%90% 90%100% 100%100% 100%100% 100%100% 100%100% 100%100%
55,80050,699 74,40061,705 83,70059,104 91,30971,320 97,12293,291 109,509105,199 121,896117,107
Term (months)
Loan to Value (%)
Maximum financing (R$)
240
100%
84,735
240
100%
81,382
With the Program
Before the Program
23,0006,384 16,0002,800 9,000- 2,000- - - - - - -
78,80057,083 90,40064,505 92,70059,104 93,30971,320 97,12293,291 109,509105,199 121,896117,107
Maximum Incentive (R$)
Purchase Power (R$) 84,735
-
81,382
31Source: IBGE (Brazilian Institute of Geography and Statistics) and Company data
Notes:(1) Loan-to-value: Caixa finances 100% of the units in 240 months, 90% in 300 months and 80% in 360 months.(2) MCMV maximum incentive is R$ 23,000 for five metropolitan regions (São Paulo, Campinas, Santos, Rio de Janeiro and Brasília) and R$ 17,000 for other regions.
Financing: Interest and Term Impact
Model:
Unit Value: R$ 120,000
Monthly Installment (R$)
10 15 20 25 30
12% 1377 1152 1057 1011 987
11% 1322 1091 991 941 914
Loan Term (years)
%)
Loan-To-Value: 80%
Loan: R$ 96,000
Mortgage Effort: 30%
10% 1269 1032 926 872 842
9% 1216 974 864 806 772
8% 1165 917 803 741 704
7% 1115 863 744 679 639
6% 1066 810 688 619 576
5% 1018 759 634 561 515
4% 972 710 582 507 458Rea
l Int
eres
t R
ate
(%
Mortgage Effort: 30%
Example
Rental : R$800 per month
Minimum Wages Required (monthly salary)Loan Term (years)
3% 927 663 532 455 405
2% 883 618 486 407 355
R
Rental : R$800 per monthAnnual Yield: 8%
Equivalent to Loan Instalment with Real Interest Rate at 8%
and 20 years term
10 15 20 25 30
12% 10 8 8 7 7
11% 9 8 7 7 7
10% 9 7 7 6 6
9% 9 7 6 6 6
8% 8 7 6 5 5
t R
ate
(%)
Loan Term (years)
32
y7% 8 6 5 5 5
6% 8 6 5 4 4
5% 7 5 5 4 4
4% 7 5 4 4 3
3% 7 5 4 3 3
2% 6 4 3 3 3
Rea
l Int
eres
Economic Construction Concept
Simple standardized projects, easily
executed, and focused on process
Market research Partners + R&D Center
‘’Lean Construction’’ Concept Living’s Concept
management
Synergy gains from the integration of
product development, technology and
Product Technology
production process
Better relationship between designers,
manufactures and construction
Production process
Industrial management
Architecture
Integrated process management
This new concept allowed Living to be
competitive in the lower segments of
the pyramid
management
33
CEF Project Flow
Pre-Analysis(Evaluation)
Legal
EngineeringRegional
CommitteeContracting
PJ
Risk ContractingPF
Evaluation Company contracting Company (PJ) and Client (PF) contracting
Approved for sale
12,792
Submitted
4,000
To be contracted
4,382
Contracted (PJ)
16,390 Total
39,964TransferredContracted (PF)
4,400*
=
,
Contracted Units
CAIXA Deadline: 15 days CAIXA Deadline: 60 days CAIXA Deadline: 90 days
*1,700 units were transferred from April to June.
34
CEF Living % Living
0-3 Minimum Wages 240,569 2,560 1.1%3-10 Minimum Wages 280,374 18,230 6.5%Total 520,943 20,790 4.0%
3 to 10 M.W.6.5% of market share
in approvals(PJ + PF)
Note.: Contracts of Caixa until June, 2010Living updated until June, 2010
StilloNatal - RNLaunched in September 2009
Financial ResultsFinancial Results
Financial Results (R$ million)
Net Revenue - (R$ million)Net Revenue - (R$ million) EBITDA - (R$ million)EBITDA - (R$ million)Net Revenue (R$ million)Net Revenue (R$ million) EBITDA (R$ million)EBITDA (R$ million)
2,847.4
4,087.8 911.3
39444954596469
689.0
1,116.7
1,707.3
671.5
1,132.4
157.8
248.5
390.5 461.0
151.2 223.7
22.9% 22.3% 22.9% 16.2% 22.3% 22.5% 19.8%4090141924293439
34 8% 34 4%
Net Profit - (R$ million)Net Profit - (R$ million)Backlog - (R$ million)Backlog - (R$ million)
2005 2006 2007 2008 2009 1Q09 1Q10
729.3 6469
-1
2005 2006 2007 2008 2009 1Q09 1Q10
4,937.2 5,033.4 5,041.2
34.8% 34.4% 34.3%
242 3
422.1
277.7 2429343944495459
36
2008 2009 1Q10
Revenue to be Recog. Gross Mg. To be Recog.
127.8
242.3
100.5
174.2
18.6% 21.7% 24.7% 9.8% 17.8% 15.0% 15.4%
-14090141924
2005 2006 2007 2008 2009 1Q09 1Q10
Financial Results (R$ million)
Expenses to Sales Expenses to Net Revenue
4.3%20092009 5.6%
7 8% 7 6%8.3%10.3%
8 8% 7.8%
6.0%7.1% 7.6%
8.3%
6.8%5.8%
5.0% 5.1%6.6%
1Q09 2Q09 3Q09 4Q09 1Q10
6.3% 5.9%4.0%
8.8%
9.0%
6.1%4.1% 2.7%
7.0%
1Q09 2Q09 3Q09 4Q09 1Q10
Selling Expenses Gen. & Admin. ExpensesSelling Expenses Gen. & Admin. Expenses
37
Accounts Receivable
Receivable’s remuneration Receivables ScheduleReceivable s remuneration(R$ million)
Finished units: IGP-M + 12%
Receivables Schedule(R$ million)
1,440
10,395
1,639.7
1,790.3
3,665.2
2012
2011
2010
Finished units: IGP M 12%Under Construction: INCC
8,955
3,310 362.9
402.0
444.7
458.9
896.5
2017
2016
2015
2014
2013
Units under construction
Constructed units
3,310
Schedule of costs to be incurred(sold units- R$ million)
734.5 Up to 2028
Units under constructionConstruction cost to incur - sold
1,020.8
1,695.9
2011
2010
38
593.0 Further years
Liquidity
Debt(R$ million)
Balance
March 31, 2010Maturity Cost
SFH 1,379.7 2009 to 2014 TR + ~ 10.4% p.a.
Debentures 1st issuance 500.0 2012 ,2013,2014 CDI + 0.48% p.a.
Debentures 2nd issuance 61.9 2018 CDI + 0.65% p.a.
Debentures 3rd issuance 350.0 2014 CDI + 0.81% p.a.
Nov/2010 Nov/2011Bradesco (stand-by) and others 204.3
Nov/2010, Nov/2011, Nov/2012, Nov/2013
CDI + 0.81% p.a.
Loans (foreign currency) – US$ 50 million 53.4 Sep/2011 and Sep/2012 Libor + 3.5% and 4.3% p.a.
Total Debt withSFH 2,549.3
Total Debt without SFH 1,169.6
Cash and Cash Equivalents (1,286.1)
Net Debt withSFH 1,263.2
Net Debt without SFH (116 5)
Net Debt withSFH
LTM EBITDA
= 1.3 time
39
Net Debt without SFH (116.5)
Net CASH without SFH
LTM EBITDA
= 0.1 time
Pre-Sales to be Recognized
2007R$ illi 2008 2009 1Q102007
1,597.1
4 515 2
R$ million
Sales to be recognized at the beginning of the period
Net sales recorded in the period
2008
4,081.6
3 974 4
2009
5,124.2
4 324 6
1Q10
5,224.0
1 173 34,515.2
(2,030.3)
Net sales recorded in the period
Revenues recognized in the period
3,974.4
(2,930.8)
4,324.6
(4,192.3)
(149.0)Taxes (3.65%) (187.0) (190.7)
1,173.3
(1,158.6)
(191.0)
(2,604.7)
3,933.0Net Sales to be recognized at the end of the period
Cost of units sold to be recognized (3,217.2)
4,937.2
(3,300.8)
5,033.4
( ) ( ) ( )
(3,309.6)
5,041.2
( )
(26.3)
1,327.9
Selling Expenses
Gross profit to be recognized
(37.6)
1,719.9
(14.7)
1,732.6
(16.3)
1,731.6
40
33.8%Percentage of gross profit 34.8% 34.4% 34.3%
Pleno ResidencialBelém - PALaunched in March 2010
A diAppendix
Cyrela’s History
•Cyrela Follow-on II
•Second public debenture issue in the amount of R$ 499.5 million
Cyrela Follow on II •3rd debenture issue in the amount of R$ 350.0 million•Merger of Goldsztein Participações into Cyrela
2009
2008
M f B il R lt i t C l V d ti f C l B il R lt
•Cyrela Follow-on I
•Cyrela first debenture issue, in the amount of R$ 500.0 million•Spin-off of Cyrela Commercial Properties (CCP)
2006
2007
•Merger of Brazil Realty into Cyrela Vancouver and creation of Cyrela Brazil Realty Empreendimentos e Participações S.A (CBR) •Cyrela’s IPO
•Cyrela subsidiaries are grouped under Cyrela Vancouver2004
2005
•Brazil Realty a joint Venture with Argentine company IRSA is founded
•Brazil Realty’s IPO
•Beginning of the partnership of Cyrela with RJZ Engenharia, in Rio de Janeiro
1994
1996
2000
42•Cyrela is founded in São Paulo, SP
•Cyrela Construtora is founded and Seller (own sales team) are created
Brazil Realty, a joint Venture with Argentine company IRSA, is founded
1962
1981
Cyrela Brazil Realty Group
Development and Construction Joint Ventures and Partnerships
Sales ServicesSales Services
43
2016 Olympic Games
Strategically positioned landbank in Rio de Janeiro
R$ 14bn of PSV in Rio de Janeiro, of which almost
90% is located in Barra da Tijuca
Barra da Tijuca was chosen as the location for the new
Barra da Tijuca - RJ
C
g y p
Barra da Tijuca was chosen as the location for the new
Olympic Games facilities, such as the Olympic Training
Center and the Olympic Village. Such facilities and their
benefiting to the region will endure for long after the
Cidade Jardim Centro
Metropolitano
Gleba F
Olympic Games
Until 2016, more than R$100 billion of investments
expected for the project
G eba
Península
Future facilities of Olympic Games
2016
► The civil construction sector is expected to account for approximately 10% of the investments
► The local government announced R$ 11.4 bninvestment in transportation infrastructure to
Península
44
pfacilitate access to the region
Source: Rio 2016 official Olympic project
Cyrela is the best positioned real estate company to profit from the 2016 Olympic Games
Typical Cyrela Project
Launch Go ahead DeliveryCompletion
Construction
Launch Go-ahead Deliveryp
of payments
6M - 18MLicensing
Pre-sales 0 50 70 90 100 10080 95
Up to 100M18M 24M 30M 36M12M6M0M
Licensing
% Budget Costs
- - 0% 40% 100% 100%20% 65%
Revenues - - 0 36 100 10016 62
Assumptions for this example:
Potential sales: R$ 100 million
Collections(cumulative)
- 7 14 28 50 10020 34
45
Potential sales: R$ 100 million
Exchange agreements (land): R$ 20 million (recognized as revenues and COGS)
Does not include financial revenues deriving from customer financing
Shorter operating cycle: 24 months
Typical Living Project
p g y
Launch Go-ahead Delivery Financing
Contracted Sales
18M 24M Up to 28M12M6M0M
0 - 6 monthsPre-Launching
Construction
Contracted Sales(cumulative)
- 70 80 10090 100
%Construction Cost
- - 23% 100%55% 100%
RevenuesRevenues(cumulative)
- - 19 10049 100
Collections(cumulative)
- 6 11 2013 100
Assumptions for this example:
46
Potential Sales: R$ 100 million
Exchange agreements: 100% (R$10 mm), 80% of unit price financed by commercial banks
Client is fully financed by the banks after keys handover
Short Cycle Process
0 – 6 monthsPre-Launching
12M 16M Up to 20M8M4M0M
Launch Go-ahead Delivery
Construction
Financing
Servicing the client from purchase onwards, through a single
Use of “Lean Construction” Concept
Assembly line
Living Corporate EnvironmentEngineeringProduct
Simple, standard and easily executed projects focused on low , g g
communication channel: the Customer Servicing Platform
In-house and trained sales force
Financing availability through CaixaEconômica Federal
Assembly line
Reduction of waste and costs
Enhancement of construction methods for popular housing
Increased productivity and quality during works execution
p jincome segment. Standardization of:
► Land acquisition
► Real Estate Development
► Sales g
Increased costumer satisfaction
Price defined by product (not by sq.m.)
15% cost reduction expected
► Construction
► Customer Relationship
Prices from R$90,000 to R$ 200,000
Units from 45sq.m. to 75sq.m
47
Source: Company
Contact IR
Cyrela Brazil Realty S.A. Empreendimentos e ParticipaçõesAv. Presidente Juscelino Kubitschek, 1455, 3rd floorSão Paulo - SP – BrasilCEP 04543-011
Investor RelationsPhone: (55 11) 4502-3153 [email protected]
www.cyrela.com.br/ir
Statements contained in this press release may contain information which is forward-looking and reflects management'scurrent view and estimates of future economic circumstances, industry conditions, company performance and the financial
lt f C l B il R lt Th j t j ti d h l i l b d t' t ti
48
results of Cyrela Brazil Realty. These are just projections and, as such, exclusively based on management's expectationsof Cyrela Brazil Realty regarding future business and continuous access to capital to finance the Company's businessplan. Such future considerations rely substantially on changes in market conditions, government rules, competitor'spressure, segment performance and the Brazilian economy, among other factors, in addition to the risks presented on thereleased documents filed by Cyrela Brazil Realty, and therefore can be modified without prior notice.