earnings release presentation - second quarter 2007 (2q07)
TRANSCRIPT
2Q07 Earnings Release2Q07 Earnings Release
Rubens Menin Teixeira de Souza - CEO
2Q07 2Q07 HighlightsHighlights
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Launches grew 93% in the 2Q07 and 159% in the 1H07, compared to 2Q06 and 1H06,respectively:
– PSV of R$ 254 million in the 2Q07 and R$ 494 million in the 1H07
Increase of 199% in contracted sales in the 2Q07 and 219% in the 1H07, compared to 2Q06 and1H06, respectively:
MainMain HighlightsHighlights
– R$ 158 million in the 2Q07and R$ 296 million in the 1H07
Land Bank of R$ 4,3 billion, covering 39 cities
Increase of 148% in the Net Operating Revenue in the 2T07 and 144% in the 1H07
– R$ 80 million in the 2Q07 and R$ 142 million in the 1H07
Gross Margin of 41% in the 2Q07, considering financial earnings from clients
EBITDA grew by 742%, totaling R$ 16 million, with a 20% margin in the 2Q07 compared to 2Q06
Net Income in the 2Q07 was R$ 15 million, with an 18% net margin
MRV’s result to be recognized grew by 36% in relation to the 1Q07, reaching R$126 million 3
NewNew ShareholdersShareholders’ ’ StructureStructure
Closing: August 9, 2007
Primary and Secondary Offering
InitialInitial PublicPublic OfferingOffering
44,2%
33,9%
Primary and Secondary Offering
Total Proceeds: R$1 billion
73% of total proceeds came from foreign investors
373 funds make up for the shareholders’ base
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11,6%5,3%
2,5%2,5%
Rubens Menin Teixeira de Souza Autonomy capital Two Sarl
Unno Participações S/A Maio Participações Ltda
MA Cabaleiro Participações Ltda Conselheiros
Real Estate Market for the Lower Income SegmentReal Estate Market for the Lower Income Segment
ResourceResource OfferingOffering
– Increase of 67% in the savings resourcesmortgage loans by private banks (R$ 7 billion)
–Increase in the net funding by savings (R$ 4billion in the 1H07)
Real Estate mortgage Real Estate mortgage climbing (R$ billion)climbing (R$ billion)
5
billion in the 1H07)
–Growth of 27% in the remaining FGTSavailabilities in 2006 (R$71 billion in 2006)
HighHigh DemandDemand
–Interest rates’ reduction
– Financing terms stretching to 25 years
–Limit increase for real estate mortgages
–Interest rates’ reduction of 0.5 p.p. for clientswith R$ 2 thousand to R$ 5 thousand income
Source: ABECIP and Banco Central do Brasil¹ Total of real Estate mortgage with bank savings
Integrated business model
High prospect capacity of land
bankHigh quality team and partnership
culture
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Knowledge and focus on lower
income residential projects
Assembly line with standard, scale
and flexible moulds
Lower operating cycle relative to
standards
Geographic diversity, operating
in 39 cities
Competitive Competitive AdvantagesAdvantages
“MRV 40,000”
– Best practices in the operating and business process
– Personnel and Information Technology Investments
– Facilities’ remodeling
GrowthGrowth ChallengesChallenges
– Facilities’ remodeling
Execution Capacity
– Land bank: 203% increase (R$3 billion) in the land bank price and 15 additional cities in 7months
– Labor: 80% increase in the operational labor force, reaching 4,500 people working inconstruction
– Construction site: 115 construction sites, with a 165 construction sites forecast untilDecember 2007
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Leonardo Corrêa – CFO and Investor Relations Officer
Financial Financial andand OperatingOperating PerformancePerformance
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Financial performance Financial performance –– G&A e SalesG&A e Sales
G&A / Contracted sales (%)G&A / Contracted sales (%) Sales / Sales / ContractedContracted salessales (%)(%)
9
10,0%
7,7%8,6%
9,3%
11,1%
7,7%
2Q06 2Q07 1H06 1H07 1Q07 2Q07
5,2%
4,1%4,6%
3,9% 3,8%4,1%
2Q06 2Q07 1H06 1H07 1Q07 2Q07
PSV PSV ((100% in R$ million)100% in R$ million)
132
254
191
494
239 254
10
9%
39%45%
7%
PRE SALES VALUE MIX- 2Q07
From 38.170 to 80.000 From 80.001 to 130.000
From 130.001 to 180.000 From 180.001 to 260.000
11%
44%
37%
8%
PRE SALES VALUE MIX - 1H07
From 38.170 to 80.000 From 80.001 to 130.000
From 130.001 to 180.000 From 180.001 to 260.000
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2Q06 2Q07 1H06 1H07 1Q07 2Q07
ContractedContracted Sales Sales (% MRV in R$ (% MRV in R$ millionmillion))
146
276
130 146
11
12%
41%29%
18%
CONTRACTED SALES MIX- 2Q07
From 38.170 to 80.000 From 80.001 to 130.000
From 130.001 to 180.000 From 180.001 to 260.000
14%
43%
25%
18%
CONTRACTED SALES MIX- 1S07
From 38.170 to 80.000 From 80.001 to 130.000
From 130.001 to 180.000 From 180.001 to 260.000
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90
2Q06 2Q07 1H06 1H07 1Q07 2Q07
R$ 4.3 billion
44 thousand units
39 cities
12%
50%
38%
LandLand bankbankJuly 31July 31 stst ForecastedForecasted LauchingLauching
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2007 2008 2009LAND BANK PER STATE VGV (R$)
% Participation VGV
Nº UnitsAverage Price
(R$)
Minas Gerais 779.224.400 18% 9.588 81.271
São Paulo 2.619.480.590 60% 24.924 105.099
Distrito Federal 210.124.000 5% 1.542 136.267
Goiás 172.100.000 4% 1.734 99.250
Rio de Janeiro 234.918.500 5% 2.960 79.364
Espírito Santo 179.903.000 4% 1.912 94.092
Paraná 121.799.095 3% 1.324 91.993
Santa Catarina 17.312.080 0% 181 95.647
TOTAL 4.334.861.665 100% 44.165 98.152
Net Operating RevenueNet Operating Revenue(R$ million)(R$ million)
142
13
32
80
58 62
80
2Q06 2Q07 1H06 1H07 1Q07 2Q07
Gross Gross IncomeIncome andand Gross Gross MarginMargin
53
38% 37% 38%
14
10
30
17
23
30
30%
38%
29% 38%
37% 38%
2Q06 2Q07 1H06 1H07 1Q07 2Q07
GROSS INCOME (R$'MM) GROSS MARGIN (%)
Adjusted EBITDA and Adjusted EBITDA MarginAdjusted EBITDA and Adjusted EBITDA Margin
30
15
2
17
5
12 17
6%
22%
8%
21% 20%22%
2Q06 2Q07 1H06 1H07 1Q07 2Q07
ADJUSTED EBITDA (R$'MM) ADJUSTED EBITDA MARGIN (%)
AdjustedAdjusted Net Net IncomeIncome andand AdjustedAdjusted Net Net MarginMargin
24
16
1
16
3
8
16
3%
20%
6%
17%
13%
20%
2Q06 2Q07 1H06 1H07 1Q07 2Q07
ADJUSTED NET INCOME (R$'MM) ADJUSTED NET MARGIN (%)
UnearnedUnearned ResultsResults(R$ (R$ millionmillion))
UNEARNED RESULTS (R$'000) 2Q07 2Q06 1Q07 31.12.2006Chg %
2Q07 x 2Q06Chg %
2Q07 x 1Q07
Unearned sales revenue 242 97 179 119.262 148,6% 35,2%
Unincurred cost of units sold (116) (50) (86) (55.903) 131,5% 34,4%
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Unincurred cost of units sold (116) (50) (86) (55.903) 131,5% 34,4%
UNEARNED RESULTS 126 47 93 63.359 166,6% 35,9%
UNEARNED MARGIN (%) 52,2% 48,7% 52,0% 53,1% - -
OutlookOutlook
MRV strongly believes in the civil construction market’s growth. Our business planning abides by this
belief.
OUTLOOK 2007
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OUTLOOK 2007
PSV (100% MRV - R$'mm) 920 ~ 980Contract sales (R$'mm) 610 ~ 660
Gross Margin 38,0% ~ 41,0%Adjusted EBITDA margin 21,0% ~ 24,0%Adjusted Net margin 19,0% ~ 22,0%
DisclaimerDisclaimer
This presentation contains forward-looking statements. Such statements are not statements of
historical facts, and reflect the beliefs and expectations of MRV’s management. The words“anticipates”, “wishes”, “expects”, “estimates”, “intends”, “forecasts”, “plans”, “predicts”, “projects”,“targets” and similar words are intended to identify these statements. Although MRV Engenhariabelieves that expectations and assumptions reflected in the forward-looking statements arereasonable based on information currently available to MRV’s management, MRV Engenhariacannot guarantee future results or events. Forward-looking statements included in this presentationspeak only as of the end of 2Q07 and the Company does not undertake any obligation to updatethem in light of new information or future developments. MRV Engenharia shall not be responsiblefor any transaction or investment decisions that are taken based on information included in thispresentation.
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ContactsContacts
Leonardo Corrêa
CFO and Investor Relations Officer
Mônica Simão
Financial Director
Juliana Bastos
Investor Relations and Planning Manager
Phone: (31) 3348-7106
E-mail: [email protected]
www.mrv.com.br/ri
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