1

Deutsche Bank Real Estate Week February, 2014

Introduction

3

Focus on the Very Low Income (1/2)

2014*

470,000

2013

34,372

2012

23,234

2011

8,872

2010

7,391

Contracted MCMV Level 1- Track Record

(Units)

MCMV Level 1

For 2014, there are still

around 470,000 units

to be contracted in the

MCMV Level 1 to

achieve the program

goal.

Total Launched – Track Record

(PSV R$ million)

80%70%

36%36%19%

2,041

2013

2,565 +9%

CAGR:+35%

+24%

523

2012

2,345

1,647

698

2011

1,447

522

924

2010

1,067

380

686

2009

783

149

634

% Construction Service

Development

Construction Service

2% 9% 6% 5% Market Share

Total Hired % Balance Concluded % %(A) (B) (C) (C/A) (C/B)

Level 1 2,000,000 1,527,379 76% 472,621 459,647 23% 30%

Level 2 1,200,000 1,294,889 100% - 935,370 78% 72%

Level 3 400,000 417,361 100% - 139,208 35% 33%

Total 3,600,000 3,239,629 472,621 1,534,225

Results MCMV (Phase 1 & 2) - Up - to Date

4

Focus on the Very Low Income (2/2)

Program Challenges ("Ministério das Cidades")

• Hire 470k units in 2014

• Quality assurance and delivery

• Investments on projects sustainability

• Improvements in the construction process

Level 1: Status

(Units)

100%

Delivered

459,647

23%

Contracted

1,527,379

76%

MCMV 1 & 2

2,000,000

Source : Ministério do Planejamento, Orçamento e Gestão 12/31/2013

5

Cash Generation with Growth (1/2)

1 - Cash Burn: measured by the change in net debt adjusted for dividend payments and shares buyback

2 – Numbers prior to 2012 are not adjusted in accordance with the new consolidation accounting practices (IFRS 11).

9M13

31

2012

-156

2011

-176

2010

-283

2009

-95

Cash Burn¹,² - Anual

(R$ million)

Net Revenues - Track Record²

(R$ million)

+22%

CAGR +57%

9M13

1,306

9M12

1,073

2012

1,450

2011

1,072

2010

782

2009

378

3Q13

68

2Q13

-7

1Q13

-30

Cash Generation (Cash Burn)¹ - Quarterly Basis

(R$ million)

6

Cash Generation with Growth (2/2)

1 - Numbers prior to 2012 are not adjusted in accordance with the new consolidation accounting practices (IFRS 11).

15

45%33%

24%14%

4%

9M13

598

2012

457

2011

269

2010

117

2009

Revenue from Services

% of Gross Revenue

Revenue from Services¹ – Track Record

(R$ million)

MCMV Level 1

83%

Development

17%

Breakdown of Deferred Results

(9M13)

Financing Pass-through (“Repasses”)

(R$ million)

+41%

+43%

9M13

455

217

238

9M12

319

170

150

3Q13

192

89

103

2Q13

153

71

82

1T13

110

57 53

4Q12

136

63

73

3Q12

136

79

56

2Q12

100

50 50

1Q12

83

40 43

"Associativo"

SFH 3Q13 2Q13 D

Accounts Receivable

from Service

BRL

million192 218 -26

Accounts Receivable

from Finished Units

BRL

million698 668 30

7

Inventory

Sales and Cancellation (“Distratos”) - Development

(R$ million – PSV)

8%7%7%10%4%

27%20%

27%33%

26%

2013

231

2012

157

4Q13

75

3Q13

68

4Q12

49

Cancellation

% Cancellation over Sales - Development

% Cancellation over Sales - Total

Inventory Track Record

(R$ million)

-9%

2013

725

571

154

2012

800

670

130

Under Construction Finished Units

2013 Launches and Sales - Development

(R$ million)

Deliveries and Launches - Development Segment

(R$ million)

698523

686787

+188%

-24%

2013

839

2012

828

2011

305

2010

291

Launches Deliveries

-14%

Launches

523

Net Sales

610

Cancellations

231

Sales

841

8

Main Figures

D %

Launched PSV 2013 x 2012% Direcional

R$ million 2,565 2,346 9%

Contracted PSV 2013 x 2012% Direcional

R$ million 2,652 2,267 17%

Gross Revenue 9M13 x 9M12% Direcional

R$ million 1,340 1,057 27%

Cash Generation 9M13 x 9M12 R$ million 31 -163 n.a

ROE LTM¹ 9M13 x 9M12 % 17.6% 16.9% 0.7 p.p.

History and Business Model

10

More Than 30 Years of History

47%

Filadélphia

Participações S.A.1 Others

53%

155,298,749 ordinary shares

1. Holding owned by Ricardo Valadares Gontijo and family

2. Data: 06/30/2013

Industrial projects acting

as contractor to third

parties

Important geographic

expansion: Brasília, Rio

de Janeiro and

Campinas

Development of projects

focused on the low-

income segment

Beginning of large scale

projects for the low-

income segment

Consolidation of a

leading position in

Manaus and Brasilia

Operations expansion to

PA, RO and ES

IPO 36% annual

growth in PSV

launched (CAGR)

69% annual

growth in net

revenue (CAGR)

Follow-on

MCMV 2

Establishment of

own sales team

1981 - 2005 2006-2007 2008 2009 2010-2011 2012

Record net

revenue of R$ 1.4

Billion, a 28%

YoY growth

More than

R$ 1 billion on

projects

delivered during

2012

Increasing stock

liquidity

The most relevant

player in the

MCMV 2nd phase

Level 1

Focus on Cash

Generation and

Construction

Service business

2013

Latin American

Asia 13.8%

North American

4.1%

Europe

15.8%

Brazil

17.2%

49.1%

Free Floating ( others 53%)2

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 segment

Over 30 years of experience

Solid track record in MCMV Level 1 projects

Low equity 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

11

Direcional: A Unique Business Model

The most profitable

and efficient player in

the low-income

sector

‘’’’

High efficiency and profitability

ROE¹ among the highest in the sector LTM ROE¹: 18%

1. LTM ROE: Net Income in the Last Twelve Months / Average Shareholders’ Equity in the Last Twelve Months (net of non-controlling interest in silent partnerships and SPEs)

The best low-income player in Brazil

Industrialization Aluminum panels and concrete walls technology

45 days to develop a five floors building

1

2

3

5

4

Focus on the Low-Income Segment

13

Launched - Construction Service

(PSV R$ million)

CAGR -6%

2013

523

2012

698

2011

924

2010

686

2009

634

2008

710

Launched - Development

(PSV R$ million)

0

CAGR +92%

2013

2,041

2012

1,647

2011

522

2010

380

2009

149

2008

Construction Service Development

MCMV Level 1

+ Little or no cash burn

+ Higher ROE

+ Lower risk

+ Non-cyclical market

- Lower Margin

Development

- Higher cash burn

- Lower ROE

- Higher risk

- Cyclical market

+ Higher Margin

Total Launched – Track Record

(PSV R$ million)

80%70%

36%

19%

0%

523

2013

2,565

1,447 2,041

2012

2,345

698

1,647

2011

36%

924

522

2010

1,067

686

380

2009

783

634

149

2008

710

710

% Construction Service

Development

Construction Service

The Growth Coming From The Construction Service (MCMV Level 1)

Land

acquisition Comercial

launch End of

construction

14

MCMV Level 1 vs Development: Net FCF with no Sales Cancellations

Source: Bradesco BBI

Cash flow (traditional project vs MCMV Level 1 project)

-20%

-10%

0%

10%

20%

10Q 9Q 8Q 7Q 6Q 5Q 4Q 3Q 2Q 1Q 0Q -1Q -2Q -3Q -4Q

Traditional Development

MCMV Level 1

Traditional Project Construction

MCMV Level 1 Project Construction

Hired to

• 100% of units sold to the Federal Government: No delinquency and sales cancelations from this segment, benefiting

consolidated figures

Cash Exposure

MCMV Level 1

Development

• The Fist range of MCMV implies almost no working capital needs.

R$mn - 2Q13* Brookfield Cyrela Direcional Helbor Eztec Even Tecnisa MRV PDG Rossi Gafisa***

Net sales (co's stake) 495 1.470 642 265 363 366 310 1.388 276 268 339

Gross Sales 656 1.670 710 294 413 406 441 1.683 813 433 545

Sales cancellation 161 200** 68 29** 50** 41** 131 295 537 165 207

as % of sales 24,5% 12,0% 9,6% 10,0% 12,0% 10,0% 29,7% 17,5% 66,1% 38,1% 37,9%

Net revenue 694 1.372 451 454 276 567 436 1.072 1.071 506 628

cancellation as % of revenue 23,1% 14,6% 15,1% 6,5% 18,0% 7,2% 30,0% 27,5% 50,1% 32,6% 32,9%

*3Q when available ** Estimate *** Only Gafisa and Tenda

Lauch Date Jul/2011 Aug/2012

Level 1 R$48 k - R$65 k R$57 k - R$76 k 17%

Level 2 and 3 R$65 k - R$170 k R$76 k - R$190 k 12%

MCMV 2MCMV 2

(after review)Unit Price D%

15

MCMV Focus Moving Towards Level 1 (1/2)

• Brazil’s Federal Government has already shown that its focusing the Level 1 of MCMV, where the BZ housing deficit is heavily

concentrated.

• Such focus is clear when looking the breakdown of the Level 1 from MCMV 1 compared to MCVM 2 and its subsequent update.

2,600,000

+300%

MCMV2

1,600,000

800,000

200,000

MCMV1

1,000,000

400,000

400,000

200,000

Level 1 Level 2 Level 3

The Government increased the price cap of 17% for

the units within the first level of the MCMV Program.

4x

2x

1x

Total Hired % Balance Concluded % %(A) (B) (C) (C/A) (C/B)

Level 1 2,000,000 1,527,379 76% 472,621 459,647 23% 30%

Level 2 1,200,000 1,294,889 100% - 935,370 78% 72%

Level 3 400,000 417,361 100% - 139,208 35% 33%

Total 3,600,000 3,239,629 472,621 1,534,225

Results MCMV (Phase 1 & 2) - Up - to Date

16

MCMV Focus Moving Towards Level 1 (2/2)

Program Challenges ("Ministério das Cidades")

• Hire 470k units in 2014

• Quality assurance and delivery

• Investments on projects sustainability

• Improvements in the construction process

Level 1: Status

(Units)

100%

Delivered

459,647

23%

Contracted

1,527,379

76%

MCMV 1 & 2

2,000,000

Source : Ministério do Planejamento, Orçamento e Gestão 12/31/2013

17

MCMV: Risk of Discontinuation?

Incentives Expiring Date Renew Chance

MCMV 2 December 14 High

RET 1 (tax relief) December 14 High

RET 4 (tax relief) -

Payroll Tax Relief December 14 Mid

• MCMV is the most important federal housing program.

• Main ongoing federal government supports over housing segment:

• Brazilian social programs should continue to be relevant irrespective of which main political party holds power.

• One of the leaders in hiring of workers in Brazil from 2005 until 2011 (cumulative employment since 2005):

0,0%

5,0%

10,0%

15,0%

20,0%

25,0%

30,0%

Dec-0

5

Mar-

06

Jun-0

6

Sep

-06

Dec-0

6

Mar-

07

Jun-0

7

Sep

-07

Dec-0

7

Mar-

08

Jun-0

8

Sep

-08

Dec-0

8

Mar-

09

Jun-0

9

Sep

-09

Dec-0

9

Mar-

10

Jun-1

0

Sep

-10

Dec-1

0

Mar-

11

Jun-1

1

Sep

-11

Dec-1

1

Mar-

12

Jun-1

2

Sep

-12

Dec-1

2

Mar-

13

Construction Total ex-construction

Source : IBGE

Level 1 Contracted Units Direcional Share %

MCMV 1 & 2 1,527,379 73,869 5%

MCMV 1 482,741 7,391 2%

MCMV 2 1,044,638 66,478 6%

18

MCMV: Risk of Discontinuation?

Even considering a potential reduction in the MCMV Level 1 program with a change in political parties, there should be little effect on Direcional.

There are few companies that can deliver high volumes of construction in MCMV Level 1:

MCMV 1: 23% of units launched in MCMV Level 1 were delivered

100% 76%

23%

78%

35% 100%

100%

100%

100%

Delivered Contracted Program

Level 1

Level 2

Level 3

MCMV Program Phase 1 & 2: Status

(% of Units)

Low Share: Direcional represents 5% of MCMV Level 1 as a whole

Opportunity to increase its share

+400 bps

Source : Ministério do Planejamento, Orçamento e Gestão 07/15/2013

Very Low Income Projects:

# of projects: 32

# of Units: 73,869

Total PSV: R$ 4,591.2 MM

Average PSV: R$ 143.5 MM

Average Units: 2,308

19

Direcional’s Contracted MCMV Level 1

1st Phase MCMV 2nd Phase MCMV

# of projects: 3

# of Units: 7,391

Total PSV: R$ 380.3 million

# of projects: 29

# of Units: 66,478

Total PSV: R$ 4,211.72MM

+

Direcional`s Contracted MCMV – Level 1

(PSV million)

Direcional`s Contracted MCMV – Level 1

(Units)

+437%

2013

2,041

2012

1,647

2011

522

2010

380

2013

34,372

2012

23,234

2011

8,872

2010

7,391

+365%

Focus on Industrialization

20

21

Focus on Performance

6% 5% 5%16%

78% 84%

3Q13 1Q13

75%

18% 7%

4Q12

70%

23%

7%

3Q12

60%

31%

9%

2Q12

56%

36%

9%

1Q12

50%

41%

8%

4Q11

49%

43%

4Q13

7%

3Q11

45%

49%

7% 11%

2Q13

85%

10%

Units Under Construction by Construction Method

(% of Units)

1 Aluminum mold and concrete walls method

Concrete Blocks Conventional Structure (Concrete Pillars) Industrial Construction¹

4Q13 4Q12 D %

Units Under Construction 73.692 50.893 45%

% of Industrialization (# of units) 85% 70% 15 p.p.

Construction Sites 59 45 31,1%

Average # of Units by Construction Sites 1.249 1.131 10%

# of Cities 17 13 31%

Construction Technology

45 days to develop 2 buildings with 5 floors and 4 apartments per floor

Video: http://www.direcional.com.br/ri

Aluminum Panels and Concrete Walls

22

Operating and Financial Highlights

23

Launches

24

Launches by Segment

(% PSV)

Launches by Region

(% PSV)

50%

23% 31%44%

2013

32%

33%

4%

2012

26%

46%

5%

4Q13

39%

3%

8%

4Q12

56%

Southeast North Northeast Midwest

4%

7%

2013

80%

8% 11%

1%

2012

70%

2% 3%

14%

4Q13

79%

21%

4Q12

83%

17%

Upper-Middle Low-Income

RET1

MCMV Level 1

Commercial Medium

Launched PSV

(R$ million)

919

730

189

1,189

4Q12

276

780

504

3Q13

+9%

-23%

+18%

2013

2,565

2,041

523

2012

2,346

1,647

698

4Q13

988

201

MCMV Level 1

Development

AP

MG

RJ

GO

CE

25

Sales

21%15%

21%15%15%

55%

47%50%

41%

55%

4Q13 3Q13 2Q13 1Q13 4Q12

With MCMV Level 1 project

Without MCMV Level 1 project

Sales by Period of Launching – 2013

(% PSV – Ex-MCMV Level 1)

2013 53%

2012

25%

<2012

22%

Contracted PSV

(R$ million)

Sales-over-supply (SoS)

(% Total PSV)

Record sales in 3Q13; SoS of 47%.

-17%

+46%

2013

2,652

2,041

610

2012

2,267

1,647

620

4Q13

+17%

937

730

207

3Q13

642

504 138

4Q12

1,129

988

141

MCMV Level 1

Development

20%17%25%

17%16%

84%79%79%

74%82%

4Q13 3Q13 2Q13 1Q13 4Q12

Without MCMV Level 1 project

With MCMV Level 1 project

Sales-over-supply (SoS)

(% Units)

26

Inventory

2013

20%

2012

30%

2011

21%

2010 7%

<2010 1%

Finished Units

21%

Midweast 18%

North 51%

Southeast 31%

-9%

2013

725

571

154

2012

800

670

130

Under Construction

Finished Units

Inventory by Region

(% PSV)

Inventory by Launch Period

(% PSV)

Inventory Track Record

(R$ million)

Midweast 18%

North 38%

Southeast 44%

4Q12 4Q13

Reduction of 9% in total inventory in 2013 Geographical diversification of the inventory.

27

Land Bank

73% are large scale projects (over 1,000 units)

69% are eligible for the MCMV Program

80% were acquired by physical or financial Swap

Average acquisition price of 10% over PSV

R$ 7.4 Billion

60.126 units

Land Bank by Segment

(% PSV)

Land Bank Track Record in 2013

(R$ million in PSV) 171

2013

7,395

Launches

523

Review of

Assumptions

/ Traded and

Cancellation

Acquired

Land Bank

1,356

2012

6,734

Land Bank by Region

(% PSV)

Type of Payment

(2013 – % PSV)

Swap 90.4% Cash 9.6%

RET

2%

Low-Income 37%

Upper-Middle

7%

Medium

50%

Commercial

4%

ES2%

AM9%

MG32%

RO1%

SP6%

PA7%

DF29%

GO2%

RJ12%

28

Cash Generation with Growth (1/2)

1 - Cash Burn: measured by the change in net debt adjusted for dividend payments and shares buyback

2 – Numbers prior to 2012 are not adjusted in accordance with the new consolidation accounting practices (IFRS 11).

9M13

31

2012

-156

2011

-176

2010

-283

2009

-95

Cash Burn¹² - Anual

(R$ million)

Net Revenues - Track Record²

(R$ million)

+22%

CAGR +57%

9M13

1,306

9M12

1,073

2012

1,450

2011

1,072

2010

782

2009

378

3Q13

68

2Q13

-7

1Q13

-30

Cash Generation (Cash Burn)¹ - Quarterly Basis

(R$ million)

29

Cash Generation with Growth (2/2)

1 - Numbers prior to 2012 are not adjusted in accordance with the new consolidation accounting practices (IFRS 11).

15

45%33%

24%14%

4%

9M13

598

2012

457

2011

269

2010

117

2009

Revenue from Services

% of Gross Revenue

Revenue from Services¹ – Track Record

(R$ million)

MCMV Level 1

83%

Development

17%

Breakdown of Deferred Results

(9M13)

Financing Pass-through (“Repasses”)

(R$ million)

+41%

+43%

9M13

455

217

238

9M12

319

170

150

3Q13

192

89

103

2Q13

153

71

82

1T13

110

57 53

4Q12

136

63

73

3Q12

136

79

56

2Q12

100

50 50

1Q12

83

40 43

"Associativo"

SFH 3Q13 2Q13 D

Accounts Receivable

from Service

BRL

million192 218 -26

Accounts Receivable

from Finished Units

BRL

million698 668 30

30

Cancellation

18% Southeast

North 65%

Midweast

17%

Cancellation by Region - 9M13

(% Contracted PSV )

Sales and Cancellation (“Distratos”) - Development

(R$ million – PSV)

8%

9%

10%9%6%

28%

18%

33%29%

19%

9M13

156

9M12

108

3Q13

68

2Q13

57

3Q12

38

Cancellation

% Cancellation over Sales - Development

% Cancellation over Sales - Total

Adjusted Gross Margin¹(%)

1. Adjustment excluding capitalized interest for production financing

27%

24%

29%

3Q13 2Q13 1Q13 Midweast 18%

North 51%

Southeast 31%

Inventory by Region

(% PSV)

Midweast 18%

North 40%

Southeast 43%

4Q12 3Q13

31

Revenue by Segment

+21%

+16%

-3%

9M13

1,340

9M12

1,109

3Q13

465

2Q13

478

3Q12

402

Gross Revenue

(R$ million)

Adjusted¹ Gross Profit and Gross Margin

(R$ million)

37

30.7%

3Q13

122

111

11

27.0%

2Q13

344

97

14

23.7%

3Q12

118

105

14

30.3%

+4%

+10%

+3%

9M13

305

39

26.4%

9M12

330

293 111

Gross Profit

Interest capitalized in costs

Adjusted Gross Margin¹

Net Income

(R$ million)

2Q13

61

13.1%

3Q12

55

14.0%

+17%

+2%

+14%

9M13

178

13.6%

9M12

152

14.2%

3Q13

62

13.8%

Net Margin

242 326598

206125

+84%

+65% -15%

9M13 9M12 3Q13 2Q13 3Q12

Gross Revenue – MCMV Level 1

(R$ million)

-5%

-7%

+10%

9M13

741

9M12

783

3Q13

259

2Q13

236

3Q12

277

Gross Revenue –Development

(R$ million)

1. Adjustment excluding capitalized interest for production financing

32

ROE’s Sustainable Growth

Net Income and Annualized ROE ¹

(R$ million)

178

152

626155

+17%+16%

+17%+17%+17%

+17%

+2%

+13%

9M13 9M12 3Q13 2Q13 3Q12

Net Income

Annualized ROE¹

1- Annualized ROE: Annualized Adjusted Net Income for the quarter / Average Shareholders’ Equity for the period

33

Capital Structure

(R$ million)

22%

Debentures

CRI 7%

Working Capital 2%

FINAME and Leasing 4%

SFH

65%

Loans and Financing – 3Q13

(% of Debt)

945

4Q12

450

793

3Q13

519

913

2Q13

500

Cash

Gross Debt 343

Net Debt

22% 28% 24%

Net Debt / Shareholder's

Equity

33

445 394

Capital Structure

Net Debt

Without SFH

-197

Net Debt

394

Cash and

Cash

Equivalent

519

Debt

913

SFH

591

322

Debt

(R$ million)

34

Improvement on DIRR3 Float

Number of Investors

(#)

+80%

1,683

Dez.13

594

1,089

Dec.12

933

480

453

Sep.12

652

283

369

Jun.12

531

214

317

Mar.12

533

217

316

Investment Funds

Personal Investors

+216%

2013

9,208

2012

2,917

2011

945

2010

151

Average Trading Volume

(# of Transactions)

Average Trading Volume

(R$ 000)

274133

17

+558%

2013

1,805

2012 2011 2010

BISA3; -24%

CYRE3; 14%

EVEN3; 17%

EZTC3; 29%

GFSA3; -2%

HBOR3; 29%MRVE3; 14%

PDGR3; -9%

DIRR3 18%

RDNI3; 7%

RSID3; 8%

TCSA3; 21%

TRIS3; 6%

SECTOR; 6%

20%

25%

30%

35%

40%

45%

50%

55%

60%

65%

70%

-30% -20% -10% 0% 10% 20% 30% 40% 50%

Net

Rev

enu

e/T

ota

l Ass

ets

Net Margin¹

Slow turnover and margin above averageSlow turnover and margin below average

Fast turnover and margin below average Fast turnover and margin above average

Company; ROESize: Leverage (Assets/Equity)

Color: Average Prince - Launched Units Last 24 months

Low - up to R$ 200k per unit

Medium - between R$ 200k and R$ 400k per unit

High - above R$ 400k per unit

Sector

1. Direcional: Adjusted for non-cash expenses (Stock-Options Program)

35

Outstanding Results

18%

Source: Company Earning Release 2Q13 Annualized

(As of 2Q13)

Appendix

36

37

Construction Inflation (INCC) Track Record

Brazilian construction cost index, base 100 = Jan/2003

100

110

120

130

140

150

160

170

180

190

200

210

220

230

240

250

260

jan/03 jan/04 jan/05 jan/06 jan/07 jan/08 jan/09 jan/10 jan/11 jan/12 jan/13

Labor

INCC

(Aggregated Index)

Materials

Source: BACEN and IBGE

38

Brasilian Mortgage Track Record

39

Contacts

Carlos Wollenweber CFO | IR Officer

Paulo Sousa IR Analyst

Luiz Felipe Almeida IR Analyst

www.direcional.com.br

ri@direcional.com.br

(55 31) 3214-6200

(55 31) 3214-6450