20071002 Apresentacao Mz Real Estate Eng
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Transcript of 20071002 Apresentacao Mz Real Estate Eng
REAL ESTATE REAL ESTATE REAL ESTATE REAL ESTATE CONFERENCECONFERENCECONFERENCECONFERENCE
Agenda
COMPANY OVERVIEW
REAL ESTATE
KEY VALUE DRIVERS
NUMBERS
LOW INCOME OPERATIONS
65.5% 34.5%
FREE FLOAT49.5%
41.7%
8.8%
50.7%
42.1%
7.1%
Brazill
International
Retail
SpecialPurpose
Companies
51.0%
� IPO: January 31, 2007� Volume: R$ 522 million� Proceedings, Net: R$ 454 million� Selling shareholder: Itautec (8%)
Market cap (Sept 10, 2007): R$ 1.49 billion
Novo mercado� One share, one vote
� Full tag-along rights
� Corporate Governance
Company Overview
IPO SEPT 10, 2007
Real Estate arm of one of the largest industrial conglomerates in Brazil
Develops residential properties for all market segments and prime commercial properties
One of the largest land banks among Brazilian developers
All projects with excellent sales ratio
Aggressive growth , becoming one of the largest players in São Paulo in four years of operations
Company Overview - Summary
500
453
211
5590
1996 2003 2004 2005 2006
700
1,200
2007(E)
-39%
+115%
+165%
+284%
VGV Launched (R$ million)
CCDI is founded as the Real Estate manager of the properties of Camargo Corrêa
CCDI starts operations as real estate developer
CCDI acquiresstake in property in
Rio de Janeiro
1S07(R)
2S07(E)
Company Overview - Summary
IPO
Land Bank
VGV: 5.419,2 MM
Launched
VGV: 805,1 MM
Land Bank
VGV: 80,0 MM
Geographic Diversification
Land Bank
VGV: 150,0 MM
Launched
VGV: 386,80 MM
Land Bank
VGV: 1.398,8 MM
Launched
VGV: 117,5 MM
Coast
Land Bank
VGV: 130,0 MM
São Paulo
Minas Gerais (BH)
Rio de Janeiro
Ribeirão Preto
The São Paulo coast
MarginalPinheiros
Main Projects – Jardim Sul
6 Projects launched (from 2003 to 2007)
Total units: 656
VGV: R$ 326.2 million
Units Sold: 426 (65%)*
1 Project to be launched on 2nd Half of 2007:
Empresarial Jardim Sul
Small Offices
VGV: R$ 60MM
Units: 81
Main Projects – Jardim Sul
Shopping Jardim Sul
Av. Giovanni Gronchi
Main Projects – Arquitetura de Morar
5 Projects launched (3 in Dec 2006 and 2 in Jun 2007)
Total units: 508
VGV: R$ 232.2 million
Units Sold: 253 (49.8%)*
Bolder project, with urban conceptUn-gated community
New ecological road pavements
Landscaping and sidewalks
Delivered squares with green areas and usable leisure spaces
Project inspired by and paying tribute to the life and craft of Brazilian
maestro Tom Jobim
Main Projects – Arquitetura de Morar
Ventura Corporate TowersPartnership with Tishman Speyer (50%/50%)
Launchings: June, 2006 (phase 1) and June, 2007 (phase 2)
Location: Rio de Janeiro, RJ
Potential sales: R$ 386MM (100% CCDI) – R$ 772MM (total project)
Innovative commercial development in downtown Rio de Janeiro
LEED® Certified Green Building
Santos DumontAirport
Ventura CorporateTowers
Main Projects
Launchings: 2 phases (Cyprae in Nov06 and Cassis in Feb07)Total units: 131 VGV: R$ 117.5MMUnits sold: 95 (72.5%)3rd Phase due in 2008
Main Projects
São Francisco Golf Club
Osasco (RMSP)
Viveiro Marília VogtTotal units : 40
VGV: R$ 29.1MM
Units sold : 18 (45.0%)
Launched : May, 2007
Main Projects
Forte do GolfTotal units : 294
VGV: R$ 141.1MM
Units sold : 276 (93.9%)
Launched : May, 2005
Central ParkTotal units : 99
VGV: R$ 19.4MM (100% CCDI)
Units sold : 81 (81.9%)
Launched : Dec, 2005
Porto PinheirosTotal units : 75
VGV: R$ 57.3MM
Units sold : 70 (93.3%)
Launched : May, 2006
Av. Brig. Faria Lima
Marginal Pinheiros
Main Projects
REAL ESTATE
Declining Interest Rates and Larger Maturities Fuel Demand
Household Income Required: 4x 2005: ~R$5,800 (15.3 minimum wages)
Today: ~R$3,700 (9.7 minimum wages)
INCREASED AFFORDABILITY IS KEY
INTEREST (TR PLUS) 120 180 240 300 36013% R$ 1,452.01 R$ 1,259.63 R$ 1,185.11 R$ 1,152.75 R$ 1,138.0012% R$ 1,397.40 R$ 1,198.57 R$ 1,119.17 R$ 1,083.38 R$ 1,066.3811% R$ 1,343.80 R$ 1,138.72 R$ 1,054.42 R$ 1,015.05 R$ 995.5810% R$ 1,291.24 R$ 1,080.15 R$ 990.98 R$ 947.90 R$ 925.75
9% R$ 1,239.75 R$ 1,022.94 R$ 928.97 R$ 882.10 R$ 857.098% R$ 1,189.36 R$ 967.14 R$ 868.52 R$ 817.83 R$ 789.81
MONTHS
For the same unit price, monthly installment is down 36%
2005 Today
Real Estate Sector Attractiveness
Price of Unit : ~R$ 120,000Loan to Value : 80%Amount Financed : R$ 90,000TR:~2% per year
8%
4%
n.a.
>80%
8.7
3.7
1.7
12.5
16.5
7.0
3.3
35.0
MM %
1,900
3,800
7,600
1,200
5
10
20
3.2
R$MinimunWages
0.7
0.2
n.a
3.3
MM %
>90% 25.0 38.2 >1,200 >3.23.8
Real Estate Sector Attractiveness
Housing Deficit and Living Upgradescreate conditions for huge demand expansion
Housing Deficit Households Monthly Household Income Required
New Affordability
Cycle
KEY VALUE DRIVERS
STRONG
WELL-RECOGNIZED
BRAND
LAND BANK
MANAGEMENT
TEAM
DIFFERENTIATED
BUSINESS
MODEL
COMFORTABLE
CASH
POSITION
STRONG GROUP
SPONSORSHIP
Value Drivers
4.4%4.4%
1. 6%1. 6%
14.9%14.9%
38.5%38.5%
99.3%99.3%
100.0%100.0%
17.9%17.9%
58.9%58.9%
5.8%5.8%
Main Businesses
65.5%65.5%
Premier Listed Companies
� 67 years of operations
� Leadership role in
several industries
� National and
international presence
� Corporate Governance
� Financial soundness
� Results-oriented culture
� Capital discipline
Private-Held Companies
Strong Group Sponsorship
Steel
Energy Generation & Distribution
Highway Concession
Shoes & Sportswear
Denim (Jeans)
Financial Institutional Holding
Aluminum
Cement
Civil Works
Real Estate Development
First Company to go public bearing the “Camargo Corrêa” brand name
Brand recognition nationally and internationally (Latin America, Africa, Europe)
Main Attributes:� Trustworthiness� Professionalism� Credibility� Efficiency� Financial Soundness
Extensive Research: Top 3 in purchase intention on all tested markets
Extensive construction and complex project-related background
Our Brand, Our Asset
Camargo Corrêa facilitates access to human capital
Key personnel acquired from top tier companies�Young battle-tested team with over 400 projects on fold
Business focus - scalability� Shared service center serving over 40,000 employee-base� Located in the country-side of São Paulo (lower fixed costs)� Costs decreasing on a per-task basis� SAP® in place from day one
Incentives� Stock option plan under implementation� Bonus program based on financial and operational performance
Management Team
Extensive, valuable Land Bank� VGV: R$ 6.9 billion (100% CCDI)� Total area: 6.4 million square meters
Geographical, segment diversification� 120 plots in São Paulo, Rio de Janeiro, Ribeirão Preto, Belo
Horizonte
Duration: minimum of 3 years of launchings
Approximately 87% acquired through swaps, especially financial
Negotiations for new acquisitions underway
Land Bank
VGV*
Land Bank
0.9
0.2
0.1
3.6
SP (Country and
Shore)
RMSP Belo Horizonte
4.5
1.6
Rio de Janeiro
0.2 0.3
HM
1.8
* All Figures in R$ million, 100% CCDI
Residential
Commercial
Lots
Low Income
5,430
900
200
340
TOTAL 6,870
78.4%
13.5%
3.0%
5.1%
Type VGV* %
VGV*
* All Figures in R$ billion, 100% CCDI
11 new plots - 3,900,000 m²
R$ 1.9 billion in VGV
84% in swaps
New cities
Belo Horizonte
Santos
Guarujá
Taboão da Serra
Ribeirão Preto
0.5
5.1
0.36.92.2
1.9
30 new plots – 2,000,000 m²
R$ 0.34 billion in VGV
Country Side of São Paulo
Campinas
Sumaré
São José do Rio Preto
Jaguariúna
Land Bank
IPO 1H07 Launchings
Land Acquisition
Land Bank
No specific region and/or segment exposure in São P aulo (lands spread over 350 km²)
23 Km
15 Km
Land Bank
0.3
0.9
1.3
1.9
0.80.7
VGV* - Residential Projects
37% within theSFH Limit
5% 15% 22% 32% 14% 12%
Land Bank
Under 100 100 to 200 200 to 350 350 to 500 500 to 1,000 Over 1,000
R$ 000 per unit
* All Figures in R$ billion, 100% CCDI
Lagoa Marapendi
Barra (RJ)450 m
Santos
LOTE 27/RJ
São Vicente
Baixada Santista
Itaguaré
Península de São Lourenço
Bertioga
Land Bank Highlights
Marginal Pinheiros
Parque Burle Marx
Marginal Tietê
Parque do Piqueri
Panamby
Tatuapé
Land Bank Highlights
Shopping Jardim Sul
1.5 km²
Jardim Sul
Land Bank Highlights
MASP
Av. Paulista
Paulista
Land Bank Highlights
Vila Olímpia
Av. Juscelino Kubitschek
Av. Faria Lima
Marginal Pinheiros
Novo Shopping Center Iguatemi
Land Bank Highlights
Expected Launchings
1,2
2007
1,8
2,0
2008
1,5
1,7
2009
1,9
2010 +
Potential Land Acquisitions
VGV*
Forecasted VGV based on:“In-house” land bankActual sales priceNo monetary readjustments for units installments
* All Figures in R$ billion, 100% CCDI
Forecasted launchings in planning:Permits and approvalsProduct designing and researching
Units up to R$ 100,000 Units over R$ 100,000
Residential (Horizontal and Vertical) and Lots
Residential, Commercial, Lots
Own Selling Structure Third-Party Brokers
Construction and Consumer Financing from Launching
Construction and Consumer Financing after Keys
18 to 24-month Cycle 36-month Cycle
Own Construction Structure Third-Party Construction
Acquisition of Land in Cash/Swaps
Acquisition of Land in Swaps
Business Model
What
Where
Construction
Sales
Funding
Returns
Acquisitions
Comfortable Cash Position
2007 2008 2009 2010
Cash Position
Enough to finance growth
Model: Leverage and Swap
IPO Proceedings
80% Working Capital
20% Land Acquisition
(42.5)ACCOUNTS PAYABLE (LAND) –LONG
(28.5)DEBT - LONG
319.8NET CASH POSITION
19.3CASH POSITION PRE – IPO
454.0IPO PROCEEDINGS, NET
(12.4)DEBT – SHORT
390.8CASH POSITION POST – IPO
(54.9)CASH INFLOW (OUTFLOW) –1H07
(15.2)ACCOUNTS PAYABLE (LAND) –SHORT
R$ million
R$ million
NUMBERS
500
71
453
2006Total
Cassis
29
Viveiro Marilia Vogt
58
Águasde
Março
44
Ventura Corporate
Tower(phase 2)
+10%
CristaisDa
Terra
200
Total
97
Fotografia
VGV*
Launchings
* All Figures in R$ million, 100% CCDI
170
87
171
-1%
Total2T072006 Total
83
1T07
Contracted Sales
* All Figures in R$ million, 100% CCDI
441
187
414
162
18
488
693
Units for Sale
Units under construction
Pre-construction stage
Ready Units
1Q07 Launchings 2Q07Sales
49.5
85.6
+73%
10.1
20.4
+102%
Net Operating Revenues* Gross Income*
Financial
1H06 1H07 1H06 1H07* All Figures in R$ million
19.8
22.4
25.6
5.8 p.p.
Gross Margin (%) Addressing the Margin
CCDI Other
100 100Sales
15 0Land
50 50Construction
35 35Gross Income
100 85Revenues
35% 41%Gross Margin
6 p.p.1Q072Q06 2Q07
Financial
+43%
192.1
274.7
204.6
147.7
44.4
70.1
Revenues to be Recognized*
23.0
25.5
2.5 p.p.
Backlog Margin (%)
Financial
Costs
Results
* All Figures in R$ million
2Q06 2Q07 2Q06 2Q07
2.7
2Q06
2.8
2Q07
+3%
Net Income*
4.0
1H06-0.8
1H07
-120%
EBITDA*
Recognition of R$27.2MM in IPO-related expenses in the Fist Half of 2007
SG&A growth due to forecasted increased operations for the next periods
* All Figures in R$ million
Financial
CONTACT INFORMATION
ROBERTO PERRONI – CEOPAULO ROBERTO MAZZALI – CFO, IROFERNANDO BERGAMIN – INVESTOR RELATIONS
RUA FUNCHAL 160 – 9 ANDAR – 04551-903 – SÃO PAULO – BRAZILTEL: 5511-3841-5880/FAX: 5511-3841-5761EMAILS: [email protected] / [email protected]: www.camargocorrea-ccdi.com.br/ri
LOW INCOME
OPERATIONS
HM Engenharia e Construções Acquisition
The RationaleStarting operations in the Lower Income segment with scaleSpeed up the acquisition of know-howBe a first-mover to a huge potential marketUse the most adequate business model for the segment
The Chosen WayAcquisition of HM Engenharia e Construções
The Reasons for HMVast, proven track-recordUnique building technologyConsolidated Land BankStrong partnership in place with Caixa Econômica Federal and other financial institutionsFocus on the country-side of São Paulo (among the richest in Brazil)
The DealR$ 2.5 million paid to HM’s ShareholdersR$ 48.1 million capitalized in the companyR$ 8.1 million to be paid for HM’s Shareholders (as of March, 2007) as dividendsR$ 40.0 million for working capital and land acquisitionTotal Company valuation: R$ 60 million
The OptionCCDI has an option to acquire another 30% of HM early in 2009 (thus CCDI will potentially hold 81% of the Company)Strike price: same share price of acquisition, with adjustments (higher or lower) depending on operational (launchings) and financial (net margin) indicators
The OperationsHM’s Shareholders are shareholders of the new Company (proportionally)CCDI will indicate CFO, Chief Operations OfficerHM will adopt CCDI’s Corporate Governance and Reporting Practices
HM Engenharia e Construções Acquisition
AraçatubaSão José do Rio PretoVotuporangaCatanduva
BarretosRibeirão PretoFrancaCatanduva
CampinasSorocabaJundiaíPiracicaba
BauruMariliaBotucatuAssisSão Carlos
São Paulo
Meet HM Engenharia e Construções
75,144
11,543
86,687
Units Built
Units from R$ 40,000 up to R$ 100,000
Residential (Horizontal and Vertical) and Lots
Own Selling Structure
Own Construction Structure
State of São Paulo
2007YTD Launchings: R$ 20MM
2006 N.O. Revenues: R$ 65MM2006 Net Income: R$ 9MM
Meet HM Engenharia e Construções
Low Income TotalEconomic(R$100k-200k)
Some Projects
Some Projects