Public Meeting

Public Meeting
September 2010
Agenda
Company Profile
EZTEC’s Business Model
Financial Performance
Disclaimer: This presentation contains forward-looking statements and information related to EZTEC reflecting the current outlook
and/or prospects of the Company and its Management concerning its performance, operations and future events. These are merely
projections and as such are subject to risks, uncertainties and future events. Investors should be aware that various important factors
could lead to results materially different from the plans, objectives, expectations, projections and intentions expressed herein. Under no
circumstances are the Company, its subsidiaries, directors, officers, agents or employees responsible for any investment decision taken
by third-parties (including investors) based on the information and statements contained herein, or for any resulting, corresponding or
specific damages.
2
Company History
1S10 – Record of
launches and profits.
Guidance of Launches:
R$700-R$900MM;
Gross Margin:>40%;
Net Margin:>30%.
July/2006 – Foundation
of EZTEC S.A.
87
110
67
23
72
248
384
535
2005 – TEC Vendas
(In House Broker) is
founded.
454
1979 – EZ TEC
Engenharia Ltda is
founded.
488
June/2007 – IPO and
entrance in Novo Mercado
Launches
(%EZTEC) - R$MM
1964 – First
Incorporation of Mr.
Ernesto Zarzur:
Edifício Marcelo
São Paulo / SP
1979 -2000 – Launch of
3,258 units, distributed
in 19 projects
2003 – Mustique
Winner of Folha Qualidade
Award
(Project of the Year).
Nov/2008 – At the
height of the crisis,
launches successfully the
High-End Chácara
Sant’Anna.
May/2009 – Capital :
PSV of R$235 million;
90% sold in 2 days;
Máster Imobiliário Award.
3
High Profitability Model
Net Margin
Sector
14.4%
+19.8 p.p
Net Margin Above Average
34.2%
EZTEC
Asset Turnover
Fast Asset Turnover
+1.9 p.p
24.7%
Sector
26.6%
EZTEC
Leverage
235.3%
Sector
Low Leverage
EZTEC
124.1%
-111.2 p.p
ROE
Sector
High Profitability
EZTEC
17.4%
+6.4 p.p
23.8%
*Comparison of EZTEC’s reported results and the results reported by the industry in the 1H10.
4
Integrated Business Model
Launches by Standard
(Since 2007)
Commercial
19%
High-End
Residential
9%
Sales (Brokerage)
Administration
Fee* (Builder)
Mortgage
Low-End
Residential
3%
53%
47%
TR+
10.5%
8%
Middle-End
Residential
53%
Middle-High
Residential
16%
IGPM+
12.0%
0%
Brokers
In-House
Partner
In House
Banks
In House
*Over construction cost
Acquisition of Lots
São Paulo Metropolitan
Area – 19.1% of Brazil’s
GDP;
Project
Demand analysis;
Antecipation of trends;
Acquisition by parts;
Maximizing the use of
the lots, respecting the
law;
Meeting minimum
return requirements
Projects with high
quality;
Payment in money;
Brand recognition.
Sale
Construction
In house team with 300
brokers;
Better control of costs,
schedule and quality;
Differentiated brokerage
fee;
No administration fee;
Demand confirmation;
Promotion of sale of
units in inventory.
In house team with
more than 1.000
employees help meeting
delivery dates;
Delivery
On schedule,
strengthening the
brand;
With quality inspection,
reducing maintenance.
Established strategic
partnerships with
supliers.
5
Focus on Middle-Income
Middle-High and
High-End | 19.9%
Middle-High and High-End | 3.4%
(>32MW)
32.3%
Lower Middle-End| 28.9%
(8 MW – 32MW)
67.9%
Lower Middle-End | 48.0%
Low-End | 67.6% (<8
MW)
Low-End| 32.1%
Demand (R$)
#Families
Families Monthly Wage(1)
R$
Income
more than R$32.000 more than 64 MW
R$16.000 - R$32.000 32 MW - 64 MW
R$8.000 - R$16.000 16 MW - 32 MW
R$4.000 - R$8.000 8 MW - 16 MW
R$2.000 - R$4.000 4 MW - 8 MW
R$1.000 - R$2.000 2 MW - 4 MW
less than R$1.000 less than 2 MW
Total
Number of Families (Million) (1)
2007 2030E Grow.
%
0.0
0.3
1.1
3.3
8.4
15.5
31.7
60.3
(1) SOURCE: Fundação Getúlio Vargas and IBGE;
(2) SOURCE: EZTEC estimate
0.3
1.3
4.3
11.0
21.8
27.6
29.1
95.4
0.3
0.8%
1.0
2.7%
3.2
8.5%
7.7
20.4%
13.4
35.5%
12.1
32.1%
37.7 100.0%
Standard
High-End
Middle-High
Middle End
Lower Middle-End
Low-End
Low-End
-
Unit Price
>R$ 1.000K
R$ 500K-R$ 1.000K
R$ 300K-R$ 500K
R$ 120K-R$ 300K
R$ 70K-R$ 120K
<R$ 70K
-
Demand(2)
Av. Price Total Market Market / y
R$ 1,500K
R$ 750K
R$ 400K
R$ 210K
R$ 95K
R$ 55K
-
R$ 450Bi
R$ 750Bi
R$ 1,280Bi
R$ 1,617Bi
R$ 1,273Bi
R$ 666Bi
R$ 6,036Bi
R$
R$
R$
R$
R$
R$
20Bi
33Bi
56Bi
70Bi
55Bi
29Bi
R$ 262Bi
%
7.5%
12.4%
21.2%
26.8%
21.1%
11.0%
100.0%
6
Agenda
Company Profile
EZTEC’s Business Model
Financial Performance
7
Land Bank Breakdown
Landbank represented own PSV of R$3.5
billion at the end of 2Q10;
Average acquisition cost of 9.1% of PSV
(including
costs
with
expanding
construction potential);
Land Bank by Size (% EZTEC PSV)
R$200 - R$500 million
(3 projects)
36.80%
R$50 - R$100 million
(9 projects)
15.01%
Net land bank position: 87.7% of lot
acquisition cost already paid;
R$100 - R$200 million
(9 projects)
31.95%
No exchange agreements.
Land Bank by Standard (% EZTEC PSV)
Commercial
32%
Land Bank by Region (% EZTEC PSV)
Low-End
2%
Contryside
3%
Low MiddleEnd
13%
Shore
15%
City of São
Paulo
66%
High-End
2%
Middle HighEnd
14%
SPMA (1)
16%
Middle-End
37%
Acquisition of Lots
< R$50 million
(18 projects)
16.24%
Project
((1) Excludes the Municipality of São Paulo, i.e., corresponds to the other 38 municipalities
of the São Paulo Metropolitan Area (SPMA).
Sale
Construction
Delivery
8
Lots acquired in 2010
Lots
EZTEC PSV
Region
Standard
Adolfo Pinheiro
São Paulo
Middle
32.0
Biguaçu
São Paulo
Middle
54.5
Cel. J. Pires de Andrade
São Paulo
Middle
39.7
Horto II
São Paulo
Middle
8.8
José Bettio
São Paulo
Middle High-End
67.0
Jucumã
São Paulo
Middle High-End
24.0
Laguna
São Paulo
Middle High-End
110.1
Manoel Gaya
São Paulo
Middle
43.2
SPMA
Middle
209.3
São Paulo
Middle
24.6
Moinho Fabrini (2 phases)
Maratona
Total
(R$ million)
Middle High-End
32.8%
Middle-End
67.2%
613.1
Moinho Fabrini – São Bernardo do Campo/SP
Acquisition of Lots
Lots by Standard (% EZTEC PSV)
Project
Laguna – Santo Amaro – São Paulo/SP
Sale
Construction
Delivery
9
Anticipation of Trends
Varanda Tremembé – Middle-End with barbecue grill in the Gourmet Terrace
Sky Campo Belo – Compact High-End Residential
Supéria Moema – Commercial with loft and Terrace
Acquisition of Lots
Project
Royale Prestige – Kitchen integrated with Gourmet Terrace
Sale
Construction
Delivery
10
Launches 2010
Clima Mascote
Gran Village Club
Launch: January/10
Launch: February/10
Standard: Middle-End Residential
Standard: Middle-End Residential
EZTEC PSV: R$90.6 million
EZTEC PSV: R$77.6 million
% Sold*: 99%
% Sold*: 86%
Massimo Residence
Up Home
Launch: March/10
Launch: April/10
Standard: Middle-End Residential
Standard: Middle High-End Residential
EZTEC PSV: R$28.8 million
EZTEC PSV: R$63.7 million
% Sold*: 77%
% Sold*: 75%
Prime House Sacomã
Quinta do Horto
Launch: May/10
Launch: May/10
Standard: Middle High-End Residential
Standard: Middle-End Residential
EZTEC PSV: R$65.0 million
EZTEC PSV: R$38.6 million
% Sold*: 71%
% Sold*: 84%
Sky
Varanda Tremembé
Launch: June/10
Launch: June/10
Standard: High-End Residential
Standard: Middle-End Residential
EZTEC PSV: R$136.6 million
EZTEC PSV: R$34.3 million
% Sold*: 64%
% Sold*: 72%
* Base Date: September 22th.2010
Acquisition of Lots
Project
Sale
Construction
Delivery
11
R$322.9 million of
own PSV
Upcoming Launches
Art´E
Sophis
Location: São Paulo, SP
Location: Jundiaí, SP
Standard: High-End Residential
Standard: Middle-End Residential
Launch Preview: October/2010
Launch Preview: October/2010
EZTEC PSV: R$98.5 million
EZTEC PSV: R$56.3 million
Approved!
Approved!
Royale Prestige
Gran Village V. Formosa
Location: Santo André, SP
Location: São Paulo, SP
Standard: Middle High-End Residential
Standard: Middle-End Residential
Launch Preview: October/2010
Launch Preview: October/2010
EZTEC PSV: R$88.6 million
EZTEC PSV: R$79.5 million
Approved!
Acquisition of Lots
Project
Sale
Construction
Delivery
12
Projects in Approval Process
Region
Standard
EZTEC PSV
(R$ million)
São Paulo
Commercial
170.8
Nova Bras Cubas II
SPMA
Low-End
18.9
Pereira Barreto II e III
SPMA
Middle High-End
83.4
Rua das Flechas II
São Paulo
Middle-End
47.3
Vergueiro
São Paulo
Commercial
65.0
Virginópolis
São Paulo
Middle-End
52.7
Projects for approval in 2010
Enxovia
Region
Standard
EZTEC PSV
(R$ million)
Adolfo Pinheiro
São Paulo
Middle-End
32.0
Afonso Schimidt
São Paulo
Middle High-End
54.6
Biguaçu
São Paulo
Middle-End
54.5
Campos do Jordão
Countryside
Middle High-End
64.8
Cardeal Arco Verde
São Paulo
Commercial
40.4
Cel. J. Pires de Andrade
São Paulo
Middle-End
39.7
Jabaquara
São Paulo
Commercial
104.0
José Bettio
São Paulo
Middle High-End
67.0
Manoel Gaya
São Paulo
Middle-End
43.2
SPMA
Middle-End
209.3
Moinho Fabrini (2 phases)
Commercial
33%
Low-End
2%
Middle-End
42%
438.1
Total
Projects for approval by
June/2011
Projects by Standard (% EZTEC PSV)
Total
Middle High-End
23%
Projects by Region (% EZTEC PSV)
Countryside
6%
SPMA
18%
709.3
*The projects above do NOT represent a guidance of launches, meaning only operational efforts in
order to develop and approve the projects until June of 2011. After approval, launch will depend on
demand to achieve a minimum sales level
Acquisition of Lots
Project
Sale
São Paulo
76%
Construction
Delivery
13
Brand Recognition
Delivery on
Schedule
Brand Recognition
=
Value Creation
High Quality
Financial
Strength
Acquisition of Lots
Project
Sale
Construction
Delivery
14
Sales and Launches
Sales - % EZTEC (R$MM)
Launches - % EZTEC (R$MM)
535.2
426.9
317.3
247.6
252.8
2Q09
2Q10
1H09
1H10
Cumulative Sales- % EZTEC (R$MM)
306.9
338.2
361.3
2Q09
2Q10
1H09
Cumulative Launches - % EZTEC (R$MM)
564.8
350.0
426.9
357.9
384.0
436.6
505.8
535.2
2009
1H10
235.7
220.1
120.4
2005
1H10
86.9
2006
Acquisition of Lots
2007
2008
Project
2009
1H10
2005
Sale
2006
2007
Construction
2008
Delivery
15
EZTEC Brokerage Team
Differentiated brokerage fee for the
Sales – 1H10
in-house sales team;
2010
Launches
In house team with 300 brokers;
Increased sales velocity and price;
47%
Inventory
53%
62%
38%
Reduced use of selling expenses.
Total
53%
EZTEC
47%
Brokers
Share of Sales by EZTEC's In-House Team
2006
2007
EZTEC
19%
2008
EZTEC
39%
Brokers
55%
Brokers
61%
Project
1H10
EZTEC
53%
EZTEC
52%
EZTEC
45%
Brokers
81%
Acquisition of Lots
2009
Sale
Brokers
47%
Brokers
48%
Construction
Delivery
16
Constant Campaigns to Sell Finished Units
Terraço Anália Franco
% of Inventory Sold*: 57.1%
Splendor Tatuapé
% of Inventory Sold *: 50.0%
Splendor Vila Mascote
% of Inventory Sold *: 20.0%
Evidence
% of Inventory Sold *: 25.9%
Quality House Lapa
% of Inventory Sold *: 43.8%
Sports Village Ipiranga
% of Inventory Sold *: 59.2%
* Base Date: 22.September.2010
Acquisition of Lots
Project
Sale
Construction
Delivery
17
Execution Quality – Clima do Bosque
Game Room
In House Planning and Construction;
Social and Environmental responsibility.
Acquisition of Lots
Project
Sale
Construction
Delivery
18
Execution Quality – Sports V. Ipiranga
Standard controls, ensuring profitability, quality and delivery on schedule;
Budgets adjusted quarterly on financial statements.
Pergola
Acquisition of Lots
Project
Sale
Construction
Delivery
19
Execution Quality – Vidabella
22 projects under way (15 own projects / 7 outsourced to partners )
4.436 units under construction.
Party Room
Living Square
Acquisition of Lots
Facade
Project
Sale
Construction
Delivery
20
Projects with Delivery in 2010
Clima do Bosque
Evidence
Delivery Date: June/10
Delivery Date : October/10
Standard: Middle-End Residential
Standard: Middle-End Residential
EZTEC PSV*: R$64.8 million
EZTEC PSV *: R$33.8 million
% Sold**: 83%
% Sold**: 86%
Sports Village Ipiranga
Bell’Acqua
Delivery Date : August/10
Delivery Date : October/10
Standard: Middle-End Residential
Standard: Middle-End Residential
EZTEC PSV *: R$64.8 million
EZTEC PSV *: R$33.4 million
% Sold**: 93%
% Sold**: 86%
Quality House Lapa
Mundeo
Delivery Date : September/10
Delivery Date : October/10
Standard: Middle-End Residential
Standard: Commercial
EZTEC PSV *: R$73.7 million
EZTEC PSV *: R$22.1 million
% Sold**: 97%
% Sold**: 100%
Clima do Parque
* PSV at launch
EZTEC PSV*:
R$414.7 MM
Units.: 1.704
Ville de France
Delivery Date : September/10
Delivery Date : November/10
Standard: Middle-End Residential
Standard: Middle Low-End Residential
EZTEC PSV *: R$109.9 million
EZTEC PSV *: R$12.1 million
% Sold**: 91%
% Sold**: 94%
**Base Date: 22.September.2010
Acquisition of Lots
Project
Sale
Construction
Delivery
21
Agenda
Company Profile
EZTEC’s Business Model
Financial Performance
22
Financial Performance
Net Revenue (R$MM)
Gross Income (R$MM) and Gross Margin (%)
140. 0
39.6%
42.6%
41.1%
43.4%
50. 0%
40. 0%
30. 0%
120. 0
20. 0%
10. 0%
0. 0%
100. 0
- 10. 0%
- 20. 0%
300.9
- 30. 0%
80. 0
236.5
- 50. 0%
- 60. 0%
97.1
60. 0
132.0
- 40. 0%
130.7
- 70. 0%
- 80. 0%
160.0
40. 0
52.3
68.1
- 90. 0%
- 100. 0%
- 110. 0%
- 120. 0%
20. 0
2Q09
2Q10
1H09
1H10
- 130. 0%
2Q09
2Q10
1H09
1H10
Gross Margin
Net Income (R$MM) and Net Margin (%)
29.0%
35.3%
32.9%
34.2%
Result (R$MM) and Margin to be Recognized (%)
50.7%
40. 0%
50.7%
51. 0%
30. 0%
20. 0%
100. 0
48.2%
400. 0
10. 0%
0. 0%
350. 0
49. 0%
46.8%
- 10. 0%
47. 0%
80. 0
- 20. 0%
- 30. 0%
300. 0
45. 0%
- 40. 0%
60. 0
- 50. 0%
102.8
77.7
40. 0
250. 0
375.5
- 70. 0%
- 80. 0%
291.4
200. 0
- 100. 0%
255.8
- 110. 0%
38.3
- 120. 0%
375.5
41. 0%
- 90. 0%
56.4
20. 0
43. 0%
- 60. 0%
39. 0%
150. 0
37. 0%
- 130. 0%
- 140. 0%
0. 0
- 150. 0%
2Q09
2Q10
1H09
Net Margin
1H10
100. 0
35. 0%
2Q09
2Q10
1Q10
2Q10
Margin to be Recognized (%)
23
Comparative with Peers*
Gross Margin
Selling Expenses / Net Revenue
43.4%
5.7%
EZTEC
SECTOR AVERAGE
4.0%
31.5%
SECTOR AVERAGE
Administrative Expenses / Net Revenue
EZTEC
Financial Result / Net Revenue
5.0%
6.5%
6.3%
0.2%
SECTOR AVERAGE
EZTEC
SECTOR AVERAGE
Net Margin
EZTEC
ROE
34.2%
23.8%
17.4%
14.4%
SECTOR AVERAGE
EZTEC
*Comparison of EZTEC’s reported results and the results reported by the industry in the 1H10.
SECTOR AVERAGE
EZTEC
24
Guidance 2010
Launches
900.0
200.0
700.0
384.0
2007
436.6
2008
505.8
535.2
2009
1H10
2010E
Margins
Gross Margin: Minimum of 40% – 43.4% in 2Q10.
Net Margin: Minimum of 30% – 34.2% in 2Q10.
25
Mercado de Capitais
Information
Potential Stock Upside
Lançamentos
Free-Float
Total of Shares (excluding Treasury) (MM)
Stock Price (R$)
Market Cap (R$ MM)
26.70%
143.3
11.68
1,673.5
1,632.6
Enterprise Value (R$ MM)
+31.3%
Analyst Coverage
15.33
11.68
Stock Price
Average Target Price
40. 0
Price vs. Earnings
25. 0
30. 0
35. 0
33.7
13.6
13.4
13.3
12.4
10.7
10.4
10.1
15. 0
15.1
9.0
8.9
7.9
6.6
5.6
TRIS3
CCIM3
0. 0
5. 0
15.7
10. 0
16.2
13.2
20. 0
19.8
SETOR RDNI3 GFSA3 MRVE3 INPR3 PDGR3 RSID3
BISA3
DIRR3
CYRE3 CRDE3 EVEN3 TCSA3 HBOR3 EZTC3
JHSF3
Share closing price of September 21th, and financial information from 1H10
26
DuPont Analysis – 1H10
45.0%
Giro rápido com margem abaixo da média
Giro rápido com margem acima da média
High turnover with net margin below average
High turnover with net margin above average
40.0%
HBOR3; 39.5%, 276.2%
EVEN3; 24.9%, 256.5%
TRIS3; 16.7%, 234.4%
35.0%
CRDE3; 7.8%, 199.7%
Receita Líquida / Ativo
Net Revenue / Asset
30.0%
BISA3; 15.9%, 229.7%
MRVE3; 23.5%, 182.2%
DIRR3; 24.%, 165.9%
EZTC3; 23.8%, 124.1%
RSID3; 15.8%, 193.1%
25.0%
Giro médio
Average turnover
GFSA3; 14.4%, 330.5%
PDGR3; 16.5%, 226.6%
CYRE3; 18.5%, 273.8%
20.0%
CCIM3; 24.7%, 292.4%
TCSA3; 19.1%, 255.5%
RDNI3; 7.1%, 235.0%
Empresa; ROE ; Alavancagem(Ativo / PL)
Enterprise; ROE; Leverage(Asset / Book)
JHSF3; 5.6%, 197.4%
Giro lento com margem abaixo da média
10.0%
Low turnover with net margin below average
0.0%
5.0%
10.0%
Average Margin
15.0%
Margem média
INPR3; 4.8%, 244.2%
Giro lento com margem acima da média
Low turnover with net margin above average
15.0%
20.0%
25.0%
30.0%
35.0%
Margem Líquida
Net margin
27
A. Emílio C. Fugazza
CFO and IRO
Marcio El Tayar
IR Manager
Felipe Meira Dias
IR Analyst
Pedro Henrique Nocetti
IR Analyst
+55 11 5056 8313
[email protected]
www.eztec.com.br/ir