Brasil Brokers reports 4Q11 and 2011 results · 2015. 12. 14. · One time marketing expenses - 2.0 - 3.8 Normalized Costs and Expenses (61.8) (63.4) (214.1) (227.9) Total Costs and

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4Q11 Earnings Release

4Q11 Results Conference

Call

Portuguese

March 21, 2012

12:00 p.m. (Brasília)

11:00 a.m. (NY)

Tel.: +55 (11) 2188-0155

Password: BR Brokers

Replay: +55 (11) 2188-0155

Replay Password: BR Brokers

English

March 21, 2012

3:00 p.m. (Brasília)

2:00 p.m. (NY)

Tel.: +1 (412) 317-6776

Password: BR Brokers

Replay: +1 (412) 317-0088

Replay Password: 10009574

IR Contact

Álvaro Soares

CFO and IRO

Tel.: +55 (21) 3433-9550 E-mail: [email protected]

www.brbrokers.com.br

Brasil Brokers reports 4Q11 and 2011 results

Rio de Janeiro, March 20, 2012. Brasil Brokers Participações S.A. (BM&FBovespa:

BBRK3), a real estate brokerage and consulting firm with a strong presence in Brazil‟s major real

estate markets, announces its results for the fourth quarter of 2011 (4Q11) and fiscal year 2011.

The Company‟s consolidated financial statements are prepared in accordance with generally

accepted accounting principles in Brazil (BR GAAP), pursuant to Brazilian Corporation Law and the

rules of the Securities and Exchange Commission of Brazil (CVM).

4Q11 and 2011 Highlights

Launched PSV grew 51% in 2011 over 2010 to R$37.9 billion and by 29% in 4Q11 over 4Q10 to

R$12.8 billion;

Contracted sales increased 21% over 2010, reaching R$19.4 billion;

Net revenue went up by 21% in 2011 compared with 2010 and by 12% in 4Q11 versus 4Q10;

EBITDA in 2011 amounted to R$151.7 million, up 25% from 2010, with EBITDA margin increasing by 1 p.p., from 36% to 37%;

Net income in 2011 totaled R$106.6 million, up 46% from 2010, with a 4 p.p. net margin increase, from

22% to 26%;

In 2011, the Company acquired 4 real estate

brokerages. In February 2012, another 2 brokerages were acquired, bringing the total to 6, which jointly generate an estimated additional annual PSV of R$1.6

billion(1).

(1) Only 2 (HomeHunters and VeraBernardes) of the 6 companies acquired were partially consolidated in the company‟s results as of 4Q11.

The results of the other companies acquired in the year have not been consolidated in the 2011 results presented herein.

mailto:[email protected]

http://www.brbrokers.com.br/

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Operating Performance

The following table presents the Company‟s operating results for 4Q11 and 2011 compared with

the same periods in the previous year.

(1) Total PSV from developments launched by Brasil Brokers on an exclusive or partnership basis. (2) Includes 100% of Abyara Brokers‟ numbers.

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Sales by Market Segment In 4Q11, Contracted Sales totaled R$5,176 million, of which R$4,312 million originated from the

sale of launches, R$641 million from the resale of units and R$224 million from the sale of office

space and lots. Sales of residential and commercial units totaled R$4,828 million(1).

In 2011, Contracted Sales amounted to R$19,352 million, of which, R$16,184 million originated

from the sale of launches, R$2,632 million from the resale of units and R$536 million from sales

of office space and lots. Sales of residential and commercial units totaled R$18,215 million(1).

(1) Contracted Sales of residential and commercial units exclude the contracted sales of Primaz and of lots.

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12.6% 12.4%

14.3%

13.6%

2.9%

3.0%

2.8%

4Q10 4Q11 2010 2011

Sales by Market Segment(R$ MM)

Primary Market Secondary Market Others

4.3%

(2)

4,917 5,176

16,009

19,352

83.6%82.7%

83.3%84.5%

(2) „Other‟ is composed of the contracted sales of Primaz and of lots.

Sales by State of Operation

Primary Market

In 4Q11, contracted sales of launches totaled R$4,312 million(1), of which 74.8% was in the

southeast region, 8.1% in the northeast, 6.1% in the south, 5.5% in the north and 5.4% in the

midwest.

In 2011, contracted sales of launches totaled R$16,184 million(1), of which 73.7% was in the

southeast, 8.8% in the northeast, 6.0% in the south, 4.8% in the north and 6.7% in the

midwest.

(1) Excludes the contracted sales of Primaz and of lots.

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Secondary Market

In 4Q11, property resales totaled R$641 million(1), of which 75.2% was in the southeast, 15.0%

in the south, 4.6% in the midwest, 3.9% in the northeast and 1.2% in the north.

In 2011, property resales totaled R$2,632 million(1), of which 74.8% was in the southeast, 13.5%

in the south, 6.9% in the midwest, 3.2% in the northeast and 1.5% in the north.


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Sales by Income Segment

Primary Market

In 4Q11, of the total contracted sales of R$4,312 million(1) in the Primary Market, 12.0% came

from properties in the economic segment (priced up to R$150,000), 43.5% from the middle

segment (R$150,000 to R$350,000), 28.9% from the mid-high segment (R$350,000 to

R$650,000) and 15.6% from the high segment (over R$650,000).

In 2011, of the total contracted sales of R$16,184 million(1) in the Primary Market, 16.4% came

from properties in the economic segment (priced up to R$150,000), 39.7% from the middle

segment (R$150,000 to R$350,000), 27.7% from the mid-high segment (R$350,000 to

R$650,000) and 16.2% from the high segment (over 650,000).

Economic

(up to R$150k)

18%

Middle (R$150 to R$350k)

42%

Mid-High

(R$350 to R$650k)

25%

High(above

R$650k)14%

Primary Market - 2010

Economic

(up to R$150k)

16%

Middle

(R$150 to R$350k)

40%

Mid-High

(R$350 to R$650k)

28%

High

(above R$650k)

16%

Primary Market - 2011


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Secondary Market

Of the total contracted sales of R$641 million(1) in 4Q11, 8.4% came from properties in the

economic segment (priced up to R$150,000), 26.5% from the middle segment (R$150,000 to

R$350,000), 26.7% from the mid-high segment (R$350,000 to R$650,000) and 38.5% from the

high segment (over R$650,000).

And, of the total contracted sales of R$2,632 million(1) in 2011, 11.1% was generated by

properties in the economic segment (priced up to R$150,000), 30.1% from the middle segment

(R$150,000 to R$350,000), 27.6% from the mid-high segment (R$350,000 to R$650,000) and

31.2% from the high segment (over R$650,000).



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Other Operating Information

The following table presents other operating information from the subsidiaries, by region, as on

December 31, 2011.

Southeast 12,387 634 1,053

Northeast 1,575 120 157

South 1,417 198 140

Midwest 924 114 159

North 639 59 93

TOTAL 16,942 1,125 1,602(1)

Includes Rede Morar's points of sale

Region Sales Forces Sales Point (1) Employees

Financial Performance This section presents the Company‟s results for 4Q11 and fiscal year 2011.

Service Revenue Gross service revenue from Brasil Brokers‟ subsidiaries, represented by brokerage commissions,

totaled R$125.0 million in 4Q11, for an average commission of 2.42% on contracted sales of

R$5.2 billion. After deducting sales taxes, Net Revenue in the quarter came to R$112.0 million,

for growth of 12% from R$100.3 million in 4Q10.

In 2011, gross service revenue from Brasil Brokers‟ subsidiaries, represented by brokerage

commissions, totaled R$463.8 million, generating an average commission of 2.45% from the

contracted sales of R$18.9 billion (considering only 80% of Abyara Brokers‟ contracted sales from

January through June 2011 and 100% from July through December 2011). After deducting sales

taxes, Net Revenue in 2011 came to R$407.7 million, representing a 21% increase over the

R$335.6 million recorded in fiscal year 2010.

335.6

407.7

2010 2011

100.3 112.0

4Q10 4Q11

Net Revenue (R$MM)

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HSBC Real Estate Loan In 2011, through our partnership with HSBC to offer real estate loans, we approved a total of

R$362.2 million in real estate financing, of which loan agreements worth R$247.2 million have

already been signed. Of this amount, R$174.8 million have already been invoiced by the

Company and its subsidiaries and recorded under Service Revenue, representing additional

revenue of R$7.9 million. The number of financing agreements invoiced in the period totaled 800,

corresponding to an average loan amount of R$218,000. The loan-to-value ratio in the period was

60%.

HSBC Real Estate Loan Financed Amount

(R$ MM) 2011

Approved 362.2

Signed 247.2

Booked 174.8

Generated Revenue 7.9

Cost of Services and Operating Expenses

Operating Costs and Expenses stood at R$74.3 million in 4Q11, up 20.4% from 4Q10. After

deducting expenses relating to the higher interest in Abyara, the new stores opened as of 1Q11,

the new subsidiaries consolidated as of 1Q11, and the one-off marketing expenses related to

brand unification, which occurred this quarter, Normalized Costs and Expenses came to R$63.4

million in 4Q11. In comparison with 4Q10, Costs and Expenses were 2.6% higher, totaling

R$61.8 million.

In 2011, Operating Costs and Expenses stood at R$256.1 million, up 19.6% from 2010. After

deducting expenses relating to the higher interest in Abyara, the new stores opened as of 1Q11,

the new subsidiaries consolidated as of 1Q11, and the one-off marketing expenses related to

brand unification, which occurred in the second half of the year, Normalized Costs and Expenses

came to R$227.9 million in 2011. In comparison with 2010, Costs and Expenses were 6.5%

higher, totaling R$214.1 million.

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( R$MM) 4Q10 4Q11 2010 2011

Service Costs (4.0) (3.4) (14.8) (15.0)

G&A Expenses and Fees (55.1) (70.4) (193.9) (238.6)

Other Operating Expenses/Revenues (2.6) (0.5) (5.4) (2.5)

Total Operating Costs and Expenses (61.8) (74.3) (214.1) (256.1)

Stores Opening Expenses since 1Q11 - 2.6 - 10.2

Abyara's interest adjustment - 3.1 - 6.3

Costs and Expenses from New Subsidiaries - 3.2 - 7.9

One time marketing expenses - 2.0 - 3.8

Normalized Costs and Expenses (61.8) (63.4) (214.1) (227.9)

Total Costs and Expenses

Net Income

Brasil Brokers‟ net income in 4Q11 stood at R$22.9 million, up 4% from the same period last

year, with net margin of 20.5%, 1.5 p.p. lower than in 4Q10.

In 2011, the Company's net income was R$106.6 million, for growth of 46% on the previous

year. Net margin in 2011 stood at 26.1%, up 4.5 p.p. from 2010.

*Net Margin

(1) Costs and Expenses of the new subsidiaries include Galvão‟s 2011 figures and part of Home Hunters‟ and Vera Bernardes‟ 4Q11 figures,

and exclude the recent acquisitions of M. Garzon, Imóveis no Morumbi, Bamberg and Miranda.

(1)

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EBITDA

Brasil Brokers‟ EBITDA in 4Q11 stood at R$37.7 million, decrease of 2% from the same period

last year, with EBITDA margin of 33.7%, down 4.8 p.p. from 4Q10.

In 2011, Brasil Brokers recorded EBITDA of R$151.7 million, up 25% from 2010. EBITDA margin

stood at 37.2%, up 1.0 p.p. from 2010.

*EBITDA Margin

Income Tax and Social Contribution Tax

Income tax and social contribution tax on net income totaled R$12.2 million in 4Q11 and R$48.8

million in the year. Brasil Brokers‟ Income Tax and Social Contribution refers to the taxes on

subsidiaries, which corresponded to 10.9% and 10.5% of consolidated gross revenue in 4Q11 and

2011, respectively.

Cash and Financial Investments

Cash and Financial Investments at the end of 4Q11 totaled R$293.7 million. These amounts refer

basically to investments in bank certificates of deposit and fixed-income funds, with yields

ranging from 100.5% to 105% of the overnight interbank deposit (CDI) rate. The Company also

had receivables totaling R$110.9 million at the end of the year, with an average estimated term

of 80 days.

The Company has no exposure to derivatives or any other instruments with exposure to foreign

exchange variation or stocks.

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Cash Flow (R$ million) 2011

Cash and Financial Investments in the beginning of the period 90.7

Capital Increase (Follow-on) 176.1

Operating Activities 116.0

Capital Expenditures (21.6)

Acquisitions Payment (30.9)

Dividends Payment (36.5)

Cash and Financial Investments in the end of the period 293.7

In March 2011, the Company has concluded its second Public Primary Offering of common stocks

(“follow-on”), raising a total amount of R$ 176,1 million, net from the offering expenses.

Operating cash flow in 2011 was R$116.0 million, thanks to the cash flow from operations of

R$179,2 million, which was partially offset by the R$63.3 million increase in working capital

requirements.

Capital Expenditures in 2011 totaled R$21.6 million. This amount was allocated to the

modernization and maintenance of our facilities, expansion of our stores, mainly in the secondary

market, as well as investments in systems and equipment related to the consolidation of our

operations.

In 2011, cash payments for acquisitions amounted to R$30.9 million and referred to the down

payments of the five acquisitions announced from December 2010 to October 2011.

Dividend distribution and advance of dividends to minority shareholders represented a total cash

disbursement of R$ 36.5 million in 2011.

Debt

At the end of 4Q11 the Company did not have obligations with loans and financing lines.

Accounts payable related to the acquisitions made since the end of 2010 - Galvão Vendas, M.

Garzon Eugênio, Vera Bernardes Assessoria Imobiliária, Home Hunters and Imóveis no Morumbi -

totaled R$56.3 million at the close of 4Q11. This booked balance is the best estimated payment

based on the base performance scenario projected for these companies.

The Company has no liabilities based on derivative operations or pegged to exchange rates.

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4Q11 Financial Statement (R$ thousand)

4Q11 4Q10

Contracted PSV 5,175,842 4,626,879

Average Commission 2.42% 2.43%

Revenues of Services 125,031 112,513

Discounts and Rebates (1,879) (1,917)

Taxes on Revenues (11,112) (10,265)

Net Revenues 112,040 100,331

Cost of services provided (3,419) (4,038)

Gross Income 108,621 96,293

Operating Costs and Expenses (70,917) (57,727)

Administratives Expenses (64,772) (48,458)

Management Remuneration (2,793) (4,479)

Allowance for doubtful accounts (2,866) (2,145)

Other Operating Revenues (Expenses) (486) (2,645)

EBITDA 37,704 38,566

EBITDA Margin 33.7% 38.4%

Depreciation and Amortization (3,279) (2,381)

Financing Expenses (1,595) (800)

Present Value Adjustment (11,638/07) - (163)

Financing Income 7,753 3,219

Income before taxes 40,583 38,442

Income Tax (8,920) (10,261)

Social contribution Tax (3,278) (3,742)

Minority Interest (5,472) (2,389)

Net Income for the period 22,913 22,049

Net Margin 20.5% 22.0%

* Considera 100% do VGV da Abyara Brokers

Financial Statement

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2011 Consolidated Financial Statement (R$ thousand)

2011 2010

Contracted PSV 18,897,620 15,303,576

Average Commission 2.45% 2.45%

Revenues of Services 463,791 374,564

Discounts and Rebates (14,436) (6,328)

Taxes on Revenues (41,644) (32,645)

Net Revenues 407,711 335,591

Cost of services provided (14,985) (14,818)

Gross Income 392,726 320,773

Operating Costs and Expenses (241,065) (199,255)

Administratives Expenses (212,527) (169,192)

Management Remuneration (12,167) (18,681)

Allowance for doubtful accounts (13,916) (5,984)

Other Operating Revenues (Expenses) (2,455) (5,398)

EBITDA 151,661 121,518

EBITDA Margin 37.2% 36.2%

Depreciation and Amortization (11,752) (9,512)

Financing Expenses (4,128) (2,066)

Present Value Adjustment (11,638/07) - (194)

Financing Income 30,931 8,983

Income before taxes 166,712 118,728

Income Tax (35,752) (30,825)

Social contribution Tax (13,100) (11,299)

Minority Interest (11,261) (3,809)

Net Income for the period 106,599 72,794

Net Margin 26.1% 21.7%

Financial Statement

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Consolidated Balance Sheet on December 31, 2011 (R$ thousand)

Assets

2011 2010

Assets

Cash, Cash Equivalents 64,069 88,010

Financial Investments 71,423 2,736

Accounts Receivable 104,659 87,140

Advance from suppliers 581 171

Tax to Recover 17,816 11,049

Loans and other Credits with Related Parties - -

Prepaid Expenses 2,844 2,360

Other Current Assets 6,191 8,425

Total Current Assets 267,583 199,891

Noncurrent Assets

Long Term Assets

Financial Investment 158,244 -

Accounts Receivable 3,266 1,457

Result from disproportionate interest - -

Available properties for sales 2,055 2,217

Related parties 848 603

Advance for future Capital Increase - -

Other Credits 3,894 2,485

168,307 6,762

Investments in Controled Companies - -

Property 49,170 40,309

Intagible asset 438,712 289,168

Deferred - -

487,882 329,477

Total Noncurrent Assets 656,189 336,239

Total Assets 923,772 536,130

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Consolidated Balance Sheet on December 31, 2011 (R$ thousand)

2011 2010

Liabilities

Loans and Financing - 39

Suppliers 7,309 6,327

Wages and Burden Payable 14,967 9,789

Taxes and Contribution Payable 34,157 30,609

Advance from Clients 17,895 10,009

Dividends Payable 28,034 17,811

Payable Accounts - Company Acquisition 8,200 -

Loans and other related parties payable 109 405

Usufruct of Results - 554

Other Accounts Payable 5,311 5,879

Total Current Liabilities 115,982 81,422

Noncurrent Liabilities

Long Term Liabilities

Loans and Financing - -

Provisions for Contingencies 2,926 2,261

Taxes Payable - -

Payable Accounts - Company Acquisition 48,102 -

Investment Provisions (Losses) - -

Others accounts Payable - 822

Transactions with minority shareholders - -

Total Non Current Liabilities 51,028 3,083

Minoritary Interest 62,112 995

Shareholders' Equity

Subscribed Capital 520,437 344,359

Capital Reserve 42,992 42,992

Statutory Reserve 12,031 6,701

Profits Reserve 143,489 84,826

Treasury Stock (2,831) (2,644)

Equity Adjustment (21,468) (25,604)

Total Shareholders Equity 694,650 450,630

Total Liabilities and Shareholders' Equity 923,772 536,130

Liabilities and Shareholders' Equity

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Cash flow (R$ thousand)

January 1 through December 31, 2011

Cash Flow Statement 2011 2010

Net Income before Income Tax and Social Contribution from 01/01 to 12/31 166,712 118,727

Adjustments for reconciliation between losses - -

and net operating revenue - -

Depreciation 10,305 8,347

Amortization 1,448 1,143

Investments goodwill amortization - -

Credit Provisions (Losses) 11,050 10,772

Provisions for contingencies 665 (158)

Market value adjustment accounts receivable 291 194

Market value adjustment accounts payable - -

Long-Term Financial Expenses - -

Minority Shareholders Interest (11,261) (3,809)

Adjusted Net Income 179,210 135,216

Variation between Assets and Liabilities

Accounts Receivable (30,669) (40,357)

Taxes to recover (7,069) (5,242)

Accounts Receivable - related parties (188) (349)

Other current assets 1,529 (4,835)

Advance for future Capital Increase - -

Others Long Term Assets (1,409) 0,165

Suppliers 982 1,084

Wages and Burden Payable 5,244 (1,548)

Taxes and Contribution to recover (33,518) (32,930)

Taxes and Contribution payable - (148)

Advances from Clients 7,886 9,373

Payable to related parties (296) (131)

Usufruct of Results (554) (206)

Other Current Liabilities (64) 1,261

Others Long Term Liabilities (5,133) 0,579

(63) (73)

Net Cash Used in Activities 179,147 135,142

From Investment Activities

Financial Investment (226,931) (2,736)

Share buy back - -

Available properties for sales 156 1,012

Investments - -

Dividends Received - -

Fixed Assets (15,668) (16,864)

Intangible Assets (6,121) (1,337)

Intangible Assets (Payable Company Acquisition) - (709)

Deferred asset - -

Net Cash in Investment Activities (248,564) (20,634)

From Financing Activities with third parties

Loans and financing (39) (8)

Payable company acquisition (30,827) (3,824)

Net Cash in Investment Activities with third parties (30,866) (3,904)

From Financing Activities with Shareholders

Capital increase 189,303 -

Share issuance expenses (13,225) -

Capital reserve - premium on sale of shares - -

Minority shareholders 2,638 993

Interest distribution and advance of dividends (39,178) (21,341)

Net Cash From Financing Activities with Shareholders 139,538 (20,348)

Availability Increase (Losses) 39,255 90,256

Cash and Equivalent in the Beggining of the Period 88,010 70,964

Cash and Equivalent in the end of the period 127,265 161,221

Documents

Brasil Brokers reports 4Q11 and 2011 results · 2015. 12. 14. · One time marketing expenses - 2.0 - 3.8 Normalized Costs and Expenses (61.8) (63.4) (214.1) (227.9) Total Costs and