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1December 2010
Corporate Presentation
2
Disclaimer
We make forward-looking statements that are subject to risks and uncertainties. These Statements are
based on the beliefs and assumptions of our management, and on information currently available to us.
Forward-looking statements include statements regarding our intent, belief or current expectations or that
of our directors or executive officers.
Forward-looking statements also include information concerning our possible or assumed future results
of operations, as well as statements preceded by, followed by, or that include the words ''believes,'' ''may,''
''will,'' ''continues,'' ''expects,'‘ ''anticipates,'' ''intends,'' ''plans,'' ''estimates'' or similar expressions.
Forward-looking statements are not guarantees of performance. They involve risks, uncertainties and
assumptions because they relate to future events and therefore depend on circumstances that may or may
not occur. Our future results and shareholder values may differ materially from those expressed in or
suggested by these forward-looking statements. Many of the factors that will determine these results and
values are beyond our ability to control or predict.
118
90
66
50
36
23
PDG Cyrela MRV Rossi Brookfield
3
Shareholder Structure, Corporate Governance and LiquidityTrue corporation listed on the NYSE and the most li quid Brazilian Real Estate company
Avg. Daily Trading Volume (R$ mm) - Last 90 days 1
1. Source: Bloomberg as of November 12th, 2010
Majority Independent Board of Directors;
Senior management with an average of over 20
years of experience and interests aligned with
shareholders through Stock Option Plan;
Permanent Fiscal Council, Audit, Compensation,
Finance and Governance committees
100% free float;
100% tag along rights;
100% common shares (“Novo Mercado”);
Full compliance with Sarbanes-Oxley;
Only Brazilian real estate company listed on the
NYSE.
80% 100%
GFSA3
100%
3,921
3,022
1,740
1,204
664457
4
Solid Track Record of Value Creation
Foundation
IPO: R$494 mm of primary proceeds
Acquisition of a 60% stake
Equity International investment
Follow-on: R$488 mm of primary proceeds
First Brazilian company in the sector to be listed in the NYSE
Acquisition of a 60% stake
R$600 mm in FI-FGTS debentures(May/09)
Acquisition of the remaining 40%
Strong growth, value-creating transactions with a s uccessful history in the capital markets
Increase in stake from 60% to 80%
1
New Follow-on: Net Primary proceeds of R$1.02 billion
1954 - 2004 2005 2006 2007 2008 2009 2010
Net revenue (R$ mm)
R$600 mm in FI-FGTS debentures(Dec/09)
1. Source: Consensus Bloomberg as of August 6th, 2010
5
SECTION 1
Competitive Advantages
6
Mid and Upper-Mid Unit price: > R$200 thousand
Mid and Upper-Mid Unit price: R$70 – R$500 thousand
Affordable Entry-LevelUnit price: R$50 – R$200 thousand
Multifaceted Residential Products in All Income Seg ments
Focused on the residential market, with 3 leading b rands strategically positioned in all income segments
Pre
senc
eS
ales
Con
trib
utio
n9M
10
Inco
me
Seg
men
t /
Pric
e
49% 15% 36%
44 cities in 14 states 60 cities in 22 states 92 cities in 14 states
Com
plet
ed
Pro
ject
s
17 projects/phases in 2009 5 projects/phases in 2009 130 projects/phases in 2009
Cha
ract
eris
tics
VerticalMetropolitan areas
Custom projects
Horizontal lot developmentSuburban areasCustom projects
Horizontal / VerticalMetropolitan areas and surroundings
Standardized products
77
Strong Demand Growth in All SegmentsStrong potential demand of around R$170 billion per year, being 58% in the mid and upper mid income segment and 42% in the affordable entry-level segment
Gafisa: Positioned to capture growth in all income segments demand
Up to R$ 1,000 31.7 29.1
R$ 2,000 - R$ 4,000 8.4 21.8
R$ 4,000 - R$ 8,000 3.3 11.0
R$ 8,000 - R$ 16,000 1.1 4.3
R$ 16,000 - R$ 32,000 0.3 1.3
Above R$ 32,000 0 0.3
TOTAL 60.3 95.4
2007 2030
R$ 1,000 - R$ 2,000 15.5 27.6
Source: “O Brasil Sustentável”, FGV and Ernst & Young, 2007Notes:1. Assumes an average ticket of R$190,0002. Assumes an average ticket of R$85,000
Income Bracket(Monthly)
New Families per Year
(thousand)
Number of Families (mm)
1,526
Potential Demand (R$ bn)1
New Families(thousands)
530
101
Potential Demand (R$ bn)2
New Families(thousands)
846
72
Potential Demand per Year(R$ bn)
Gafisa Brands
(113)
526
583
335
139
43
13
1,526
Mid and Upper-Mid
Income
Affo
rdab
le
Ent
ry-L
evel
8
Landbank Distribution vs. GDP Distribution
National FootprintNational footprint captures both rapidly growing an d large metropolitan regions
Geographic Footprint
Real GDP Growth 1
GDP Distribution - 2006Landbank 3Q10
Source: Company and IBGENote: 1. Nominal GDP growth rate per year for 2003 – 2006 adjusted by the average consumer price index (IPCA) of the period2. Does not Include Brasilia Federal District .
Brand States 2 Cities Legend
14 44
14 92
22 60
Consolidated 22 130
North5%
Others Southeast11%
Northeast13%
Rio de Janeiro12%
São Paulo34%
South16%
Midwest9%
R$ 16.6 Billion
3.1%
4.7%
6.6% 6.9%
8.0%
South Midw est Southeas t Northeas t North
São Paulo
36%
Rio de Janeiro
15%Other Southeast
9%
North
6%
Northeast
15%
Midwest
12%
South
7%
9
9M10 Land bank PSV (R$ million)
Strategically Located Land Bank Gafisa has a strategic land bank that allows for co ntinued project launches
Land bank distribution
Total
39.74.041.9
38.5%16.692.1
97.04.829.0
37.97.821.2
CompanySwap
%
Future
sales
R$ billion
Potential
number of
units
(% Gafisa)
*Note: Tenda 2007 represents Fit + Bairro Novo
4.7x
1.6x
2,167
5,729
7,576 7,810
2,930
3,962 4,735
1,536
4,285 4,006
(2,948)
3,676
10,195
15,823
16,551
IPO 2006 2007 2009 9M10 Launches
Net Acquisitions
Actual 9M10
Gafisa Alphaville Tenda
242386
513 50831
47
58 59
186
241
309 352
459
674
880 919
2007 2008 2009 3Q10
Intern Enginners Construction Architects On the Job
6385
188
211
2007 2008 2009 3Q10
Units Under Construction Projects under Construction
Units Completed Number of Engineers
Source: Gafisa
Proven Track Record of Execution
10
16,099
33,586
49,423 50,189
2007 2008 2009 3Q10
3,108
8,206
10,831
9,995
E: 15,000
2007 2008 2009 9M10/2010E
1111
► 55 years in the Real Estate industry
► Completed more than 985 developments and 11 million m2
► Awards: Valor Top Management and Top Manager of the Year
► One of the best known brands in the affordable entry-level segment
► Completed more than 500 developments
► Completed more than 40 developments and 3.4 million m2
► Awards: Best Social Responsibility and 2009 Top Social –Alphaville Foundation
Strong Brand Recognition and Solid Reputation
Leading Brands
Source: ITCnet, Revista Marketing, Valor Econômico
Strong Brands in Every Segment
1stMaior Construtora do Brasil: Largest Construction Company in Brazil – 2008 / 2009 (ITCnet)
1st Reference in Urban Development
1stTop of Mind – 2008 (Diário do Grande ABC / IBOPE)
Gafisa benefits from its strong brand recognition a nd solid reputation through: (i) a higher sales speed (VSO); (ii) commanding premium p rices; and (iii) easier access to asset swaps / partnerships
1212
SECTION 2
Operating and Financial Performance
6641,004
1,215
1,757 1,576
193
250
277284
7
276
988932
664
1,204
1,740
3,022
2,792
2006 2007 2008 2009 9M10
9951,329 1,345 1,510 1,352
238300
37740660
932
1,361
1,007
995
1,627
2,578
3,248
2,766
2006 2007 2008 2009 9M10
1,005
1,698 1,913
1,265 1,332
237313
420549
300
1,970
617
1,068
1,005
2,236
4,196
2,301
4,200 to 4,600
2006 2007 2008 2009 9M10
1313
Launches, Contracted Sales and Revenues
Launches (R$mm) Pre-Sales (R$mm) Net Revenues (R$mm)
High growth rates over the last years ...
Note:1 2010E guidance range announced by the Company
1
2,949
AlphavilleGafisa Tenda
298
528
1,0151,066
1,309
37.5%
34.6%35.1% 35.2%
38.2%
2006 2007 2008 2009 9M10
REF (R$ mm) Margem (%)
46
92
110
214
279
6.9%
8.1%
9.6%9.9%
11.7%
0%
2%
4%
6%
8%
10%
12%
-20
30
80
130
180
230
280
330
2006 2007 2008 2009 9M10
Lucro Líquido (R$ mm) Margem (%)
41
89
180
259
530 550
13.4%
15.0% 14.9%
17.5%
2006 2007 2008 2009 9M10
EBITDA (R$ mm) Margin (%)
300
604
75
1414
EBITDA, Net Income and Results to be Recognized
Adjusted EBITDA 1 (R$ mm) and Margin (%)
Net Income (R$ mm) and Margin 2 (%)
Results to be Recognized (Backlog 4) (R$ mm) and Margin (%)
… aligned with sustained growth in profitability
Notes:1 Adjusted for stock options and excluding Tenda’s goodwill net of provisions2 Net income before minority interests and non-recurring expenses3 2010E guidance range announced by the Company4 Gross Profit
Tenda’s goodwill net of provisions
19.7%
18.5% to 20.5% 3
1,004
388
680 707
149
Up to Sep/2011 Up to Sep/2012 Up to Sep/2013 Up to Sep/2014 Up to Sep/2015
Project Finance (R$ mm) Corporate Debt (R$ mm)
3,307
1,846
553
527
380
Total
Investor Obligations
Debentures
Working Capital
SFH / Project Finance
1515
Debt Composition (R$ mm) and Rates9M10 Leverage (R$ mm)
Note:1 Does not include investors obligations of R$380 mm
Debt Maturity Schedule 1 (%)
Net Debt / Shareholders’ Equity
55.6%8.2% - 11.5% (TR)
CDI + (0.7% – 4.2%)
CDI
10.8%
Solid Balance Sheet
46%44%
67%85%
100%
CDI + (1.5 – 3.3%)
54%
56%
33%
3,307
1,231
2,076
Total Debt Cash Net Debt
15%
Liquidation Value (R$mn)
Company Gafisa Peer1 Peer2 Peer3 Peer4Receivables from Sold Units 8,466 10,455 11,463 5,669 5,081 (-) Taxes (571) (706) (774) (383) (343) (-) Obligations from Sold Units (2,120) (3,022) (3,673) (1,462) (1,771)
Mkt Value of Units for Sale 2,937 3,821 2,197 1,791 2,180 (-) Taxes (198) (258) (148) (121) (147) (-) Construction Obligations (790) (710) (329) (341) (986)
Book Value of Land 751 2,315 2,448 1,115 687 (-) Swaps booked in Advances (94) (540) (1,756) (453) (68) (-) Payables from land acqs. (312) (557) (395) (304) (378)
Other Assets 92 287 3 39 10 (-) Other liabilities (183) - - - -
Cash and Equivalents 1,231 1,892 986 1,014 1,284 (-) Corporate Debt (1,461) (2,527) (1,201) (1,131) (1,012) (-) SFH and other Project Finance (1,846) (2,259) (1,785) (461) (1,148)
(-) Minority Shareholders (62) (115) (399) (219) - (+) Invest. in Subsidiaries 194 134 15 - -
Liquidation Value 6,035 8,209 6,653 4,754 3,389
BV Adjusted 4,959 7,876 6,012 4,015 3,102 BV 3,772 6,123 4,384 2,919 2,563 Deferred Income 1,203 1,780 1,747 1,159 540
Deferred Revenues 3,429 5,149 5,594 2,810 2,478 Deferred Costs and Expenses (2,120) (3,022) (3,673) (1,462) (1,771) Taxes (over Sales and Income) (106) (348) (173) (190) (167)
Avg Stake 99% 98% 93% 95% 100%
P/LV 0.95 1.45 1.34 1.64 1.23 1.41 P/BVAdj 1.16 1.51 1.48 1.94 1.34 1.57 P/BV 1.53 1.94 2.03 2.67 1.62 2.07
Market Cap 5,763 11,881 8,913 7,795 4,157 # of shares 437 1,142 426 490 269 Closing price (November 12th) 13.2 10.4 20.9 15.9 15.5 *Source: Barclays Capital Res earch and Companies ' Information / (1) Excluding Gafis a
Blue Chips (3Q10)Avg(1)
1616
Trading Multiples
17
Proven Track Record of Execution
Gafisa’s Differentiation
National Footprint
Multifaceted Residential Products in All Income Segments
Strong Brand Recognition and Solid Reputation
Industry Leading Liquidity and Corporate Governance
APPENDIX A
Tenda and Alphaville
1919
Tenda: Differentiated Platform for the Affordable E ntry-Level SegmentThrough Tenda, Gafisa has a differentiated and deve loped platform to capture growth in the affordable entry-level segment
Standardized Construction ProcessSales
► Hybrid construction model with in-house and outsourced construction capabilities
► Standardized materials
► 4 project options in each production line
► Economies of Scale
Garden
Duo
Life
Tower
Centrally located and well diversified portfolio
► Well-trained and dedicated sales force helps clients with home purchasing and financing decisions
► Sales force located in areas with constant flow of people
► High variety of products and branch locations to best meet client needs
S
-80
-60
-40
-20
0
20
40
-6 -5 -4 -3 -2 -1 0 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15
Credito Associativo Plano Piloto
2020
Tenda: Blue-Print Mortgage (“Crédito Associativo”)The use of Crédito Associativo reduces the Working Capital requirement
Land
Acq
uisi
tion
Com
mer
cial
Lau
nch
Beg
inni
ng o
f co
nstr
uctio
n
End
of c
onst
ruct
ion
Key Delivery
No. of months
% C
ash
expo
sure
ove
r P
SV
With Crédito Associativo
there is little WC requirement
and the company cash flow
already moves from negative
to positive during the
construction period;
With a traditional financing
scheme, we have to use
project finance to cover the
negative WC, until the
delivery.Assumes that the land represented 10% of the PSV and was paid for in 6 installmentsCrédito Associativo is provided by Caixa Econômica Federal (CEF) to finance low-income projects/units.
Typical Project Cash Flow for low-income project wi th land acquired for cash
Financial Schemes Description
Plano Piloto (company finance/project Finance)
The developer finance all the construction cost and
transfer the customer to the bank only at the end of
construction
Plano Empresário (project Finance)Finances up to 80% of construction costs at lower rates
(SPBE resources)
Crédito Associativo (Blue-print mortgage)Company receives 100% of PSV during the construction
period (based on PoC)
Reduced Cycle – Tenda
Traditional Brick blocks Construction Method;
Use of Ceramic and Concrete Blocs;
High demand for finishing repairs;
Construction Cycle lasts 10-12 months;
Construction based on Aluminum Molds
High constructions efficiency avoiding excessive wastes;
Concrete walls done on site;
Construction Cycle lasts 4-5 months;
Effectiveness of the production process
Traditional Construction
Aluminum Molds Construction
1 2 3 4 5 6 7 8
Foundation
Building and Finishing
Title Process
Collection
Months
1 2 3 4 5 6 7 8 9 10 11 12 13 14
Foundation
Building and Finishing
Title Process
Collection
Months
21
% Oct-07 Oct-08 Oct-09 Oct-10Consolidated INCC 5.15 11.13 2.84 6.66
Materials e Equipments 4.89 13.96 -0.93 5.06
Labor 5.44 7.96 7.31 8.41
22
Tenda: Valle Verde Cotia, SP
Aluminum Mold Construction Method
INCC Evolution (%) – Last 10 months
Labor costs always tend to surpass the other INCC i tems
111
237
312
420
549
2006 2007 2008 2009 9M10
140
238
300
377406
2006 2007 2008 2009 9M10
2323
► Partnership contracts via land swaps
► Construction only after pre-sales
► High sales velocity
► Alphaville Foundation enables sustainable integration with the surrounding communities
Alphaville Concept Steady Growth
Sustainable Business Model
Launches (R$ mm)
Pre-Sales (R$ mm) and VSO (%)
Residential Area
Leisure Area
Residential Area
Residential Area
Commercial Area
Commercial Area
Multi-family Areas
Alphaville Club
Alphaville: Differentiated Business for Residential Land Communities
n.a.
60%59%
59%49%
APPENDIX B
Real Estate Market Overview
25
Housing FinanceSystem (SFH) – FundingSources
Funding Sources
Registered Workers
Savings Accounts
TR+6.17%
Allocation of
Resources
FGTS (MCMV)TR + 3%
Central Bank Compulsory Deposits
20%(TR+6.2%).10%(Selic)
Distribution of
Resources
CEF Investments
in Infrastructure
Market
Borrowers
Companies
Compulsory Housing Credit
TR + 6.17%
Resources for Lending
SFHTR+
Companies
Private Individuals
Companies
Companies
8% of their Income
30%
Private Individuals
Private Individuals
41%43%
36% 37%40%
41%
36% 37% 36% 37%39% 39% 40%
(%)Var YoY
28 29 29 30 31 32 32 33 34 35 36 38 39
-
5
10
15
20
25
30
35
40
45
R$
Bil
lion
Scenario Funding Growth Savings Increase Available Credit (R$ bi) Year
1 60% 20% 262 2012
2 40% 10% 230 2013
3 40% 17% 331 2014
4 20% 0% 167 2015
26
Brazilian Savings & Loan System (SPBE)
Growth in Brazilian Savings LTM Monthly Disbursements by the SBPE
Brazilian savings are growing steadily, ensuring av ailable credit for the coming years
Housing Credit Sources guaranteed
while new sources are under development
Sources: Brazilian Central Bank and Banco Santander
15%16%
16% 17%18%
19% 19% 19%20% 20% 20% 20% 20%
(%)Var YoY
233 238 240
245 254 257 258 260 262 265
270 277 280
150
170
190
210
230
250
270
290
R$
Bil
lio
n
101%
83%
18% 13%3%
Denmark UK Chile Mexico Braz il
2727
In recent years, the credit supply for real estate financing has increased substantially with lower interest rates and longer tenors
Growing Credit Availability
Interest Rates vs. Housing Financing
Real Estate Financing – Amount Funded (R$ bn) Housing Financing vs. GDP 1
Source: Central Bank, IBGE and ABECIP1. Data from 2006. For Brazil, consider data from 2009
Brazil: high growth potential for home financing
A favorable growth trend for credit availability be gan in
2005, when the annual Selic was close to 20%;
In 2008 the Central Bank increased the Selic from
11.25% to 13.75% without any impact on home financi ng;
According to the Central Bank, the market is expect ing
a Selic of 10.75% by the end of 2010.
3 6 9 18 30 34
55
3 4 6 7
10 16
30
6 10 15 25
40 50
85
2004 2005 2006 2007 2008 2009 2010E
SBPE FGTS
0
20
40
60
80
100
120
140
160
0%
5%
10%
15%
20%
25%
30%
35%
Dec-02
Sep-03
Jul-04
Apr-05
Feb-06
Nov-06
Sep-07
Apr-08
Nov-08
Jun-09
Dec-09
Jul-10
Selic (%a.a.) Real Estate Financing (R$ billion)
Base 100 0,70%
-1,91% -3,95%
10,43%-5,79%
22,38% 121,86%
2004 2005 2006 2007 2008 2009 Jan-Jun/10
2010
Average Price Variat ion (YoY)
1 Bed 2 Bed 3 BedSP Real Average
Income
2005 -1,93% 13,30% -19,80% 0,70% 1,20%
2006 -12,83% -28,20% -8,40% -1,90% 5,10%
2007 7,70% 27,70% -0,60% -4,00% 1,80%
2008 4,63% 1,80% 1,10% 11,00% 2,40%
2009 2,50% 1,40% 11,60% -5,50% 3,20%
Jan-Jul/10 28,07% 26,60% 35,10% 22,50% 2,70%
Cumulate 26,4% 35,8% 11,3% 21,9% 17,5%
Real Price Variation for New Units - MRSP
Real Variation (2005-10): 22%
3 Bedrooms
Fonte: MCM Consultores – Região Metropolitana de São Paulo
In 5 years, real prices have shown a 26% raise in the
metropolitan area of São Paulo, mainly from small u nits;
This raise happened specially on the last 12 months , taking
benefit from the quick post-crisis recovery;
Despite the raise since 2005, this raise is still i n line with the
average real income raise.
28
-60%
-40%
-20%
0%
20%
40%
60%
80%
jan/06 jul/06 jan/07 jul/07 jan /08 jul/08 jan /09 jul/09 jan/10
Preços YoYPrices YOY
2929
Government programs were created to reduce the sign ificant housing deficit in the lower income segments
Government Programs – MCMV I
Simulation of Potential Impact on Market Size
Source: Market Reports
Highlights
► Financing for one million houses with up to R$23,000 in subsidies to families with income of up to 10x the monthly minimum wage (R$4,650)
► R$34 billion in subsidies (Federal Government, FGTS, BNDES)
► Financing of homes with a price range of R$80,000 to R$130,000
► Interest Rates ranging from TR+5% – TR+8%
► Homebuilders can finance 100% of the property value
► No down payment and no installments during the construction period (for families with income up to 3x the minimum wage)
Mortgage
Cost (TR+)
Monthly installments
Minimum monthly income
Equivalent of minimum wages
Market Size (millions of homes)
80,000
7%
665
2,661
6.4
13.4
64,000
5%
394
1,969
4.2
23.4
Before “Minha Casa, Minha Vida” Program
Additional market of approx. 10 million houses
Average Unit Price: R$80k
Subsidy 0 16,000
3030
Government renewed MCMV program, giving more visibi lity to the Real Estate sector:
Government Programs – MCMV II
Income distribution
Source: CS, UBS, CEF, Market reports
Highlights
► Financing for two million houses up to 2014;
► R$72 billion in subsidies;
► Continued growth for the next 4 years already committed;
► General details to come up to the beginning of 2011;
► It confirms the government commitment to provide financing for entry level homebuyers.
40%60% 60%
40%
29% 30%
20%11% 10%
MCMV I - target MCMV I - up to March
1st/2010
MCMV II - target
0-3 MW 3-6 MW 6-10 MW
2 million
► MCMV II income distribution followed the same distribution of the contracted units from MCMV I:
# of units: 1 million
3131
Efficiency Gains under “MCMV” ProgramTenda contracted 22,914 units through September and has close to 8,000 units under CEF analysis
Minimum Wages Caixa Econômica Fereral(1)
0 - 3 MW 313.087
3- 10 MW 368.622
TOTAL 681.709
(1) Until October 8th
, 2010 for CEF.
Period To be contracted(2)
Contracted % MCMV TOTAL
2009 - 6.102 74% 6.102
1Q10 - 2.788 88% 2.788
2Q10 - 6.239 78% 6.239
3Q10 7.785 79% 7.785
4Q10 7.949 7.949
TOTAL 7.949 22.914 78% 30.863
(2) Units contracted in 2010 and already filed with CEF through Sep 2010.
Period Units % MCMV
2009 5.114 48%
1Q10 1.898 81%
2Q10 2.515 89%
3Q10 2.381 85%
TOTAL 11.908 69%
Total Contracted Units under "MCMV" I
Pipeline
Transferred
88 94 17
177 176 145 187
276
409
29 38
39
47 92 167
143
118 132
55
223 267
312
2003 2004 2005 2006 2007 2008 2009 Sep/2010
Caixa - MCMV Market Total
8 30
130
53 20 52 12 22
42
33 96 57
8
8
17
10
33
1
27
60
188
96
149
110
2Q09 3Q09 4Q09 1Q10 2Q10 Jul-Aug-10
0 a 3 SM 3 a 6 SM 6 a 10 SM
5 6 913 15
23
47 48
251326
425503
443515
897
2003 2004 2005 2006 2007 2008 2009 Up to Sep 10
Financing (R$ bn) Financing Amount ('000)
Source: Caixa Econômica Federal
26191
394481
596
25
95
149
193
266
24
78
114
140
186
75
364
656
814
1.048
Jun-09 Sep-09 Dec-09 Apr-10 Sep-10
0 a 3 MW 3 a 6 MW 6 a 10 MW
3232
CEF Real Estate Financing
Housing Financing Contracts (R$ bn)
MCMV Contracts Units (‘000) Inventory of Received Proposals (‘000 units)
Caixa Econômica Federal has reached historical record s of real estate financing, and is responsible for 73% of the market contracts
CEF vs. Market – Financing of New Units (‘000 units)
759
495
1,868
3,219
3,966
5,602Projects
606
3333
APPENDIX C
Operating and Financial Highlights
34
Main Financial and Operational Highlights
Operating and Financial Highlights (R$ million) 3Q1 0 3Q093Q10 vs. 3Q09 (%)
9M10 9M099M10 vs. 9M09 (%)
Launches 1.237 514 140% 2.949 1.301 127%Launches, units 6.210 3.333 86% 14.491 6.552 121%Contracted sales 1.018 800 27,3% 2.766 2.194 26,0%Contracted sales, units 5.082 5.545 -8% 14.811 15.540 -5%Contracted sales from Launches 579 288 101% 1.650 629 163%Contracted sales from Launches - % 46,8% 56,0% -922 bps 56,0% 48,3% 764 bps
Net revenues 957 877 9% 2.792 2.125 31%Adjusted Gross profit (w/o capitalized interest) 310 277 12% 856 640 34%Adjusted Gross margin (w/o capitalized interest) 32,3% 31,6% 77 bps 30,7% 30,1% 53 bps
Adjusted EBITDA (1) 197 174 13% 550 362 52%
Adjusted EBITDA margin (1) 20,6% 19,8% 77 bps 19,7% 17,0% 265 bps
Adjusted Net profit (2) 133 89 50% 326 227 44%
Adjusted Net margin (2) 13,9% 10,1% 378 bps 11,7% 10,7% 102 bpsNet profit 117 64 83% 279 158 76%EPS (R$/share) 0,27 0,24 11% 0,65 0,61 7%Number of shares ('000 final) 430.910 261.017 65% 430.910 261.017 65%Revenues to be recognized 3.429 2.905 18% 3.429 2.905 18%
REF margin (3) 38,2% 35,0% 322 bps 38,2% 35,0% 322 bps
Net debt and Investor obligations 2.076 1.732 20% 2.076 1.732 20%Cash and availabilities 1.231 1.100 12% 1.231 1.100 12%(Net debt + Obligations) / (Equity + Minorities) 55,6% 74,1% -1850 bps 55,6% 74,1% -1850 bps(1) Adjusted for stock option plans expenses (non-cash) and Tenda goodw ill net of provisions.
35
Ratings and Balance Sheet
Perspective
Last update
Stable
September/2010
Stable
September/2010
FITCH Moody’sCorporate RatingNational Scale
Rating A- A1
Stable
October/2010
S&P
A
3Q10 3Q09 2Q10
Current Liabilit ies
Loans and f inanc ing 789.331 570.307 825.382
Debentures 214.561 80.781 123.608
Obligations for purchase of land and advances from clients 460.470 488.935 466.078
Materials and serv ice suppliers 292.444 194.302 244.545
Taxes and contributions 234.394 132.216 154.983
prof it sharing 69.594 61.206 73.057
Provis ion for contingencies 8.001 10.512 6.312
Dividends 52.287 26.106 52.287
Deferred taxes - 52.375 - Other 171.417 181.312 217.569
2.292.499 1.798.052 2.163.821
Long-te rm Liabilit ies
Loans and f inanc ings 371.843 636.639 352.181
Debentures 1.551.407 1.244.000 1.748.000land 177.412 147.168 176.084
Deferred taxes 483.373 322.870 484.453
Provis ion for contingencies 51.185 59.509 52.670
Other 568.945 362.843 521.211
Deferred income on acquis ition 6.757 12.499 8.045
Unearned income f rom partial sale of investment0 11.594 0
3.210.922 2.797.122 3.342.644
Minor ity Shareholde rs 51.565 552.889 46.316
Shareholde rs ' Equity
Capital 2.729.187 1.233.897 2.712.899
Treasury shares (1.731) (18.050) (1.731)
Capital reserves 251.489 190.585 290.507
Revenue reserves 422.373 218.827 381.651losses 278.687 158.217 162.087
3.680.005 1.783.476 3.545.4130 0 0
Liabilities and Shareholde rs ' Equity9.234.991 6.931.539 9.098.194
LIABILITIES AND SHAREHOLDERS' EQUITYR$ 000' 3Q10 3Q09 2Q10
ASSETS
Current Asse ts
Cash and cash equivalents 570.718 948.350 1.136.765Restricted cash in guarantee to loans and resctricted credits 660.425 151.337 669.619
Receivables f rom clients 2.727.930 1.718.110 2.470.944
Properties for sale 1.447.266 1.376.236 1.446.760
Other accounts receivable 155.795 93.722 141.740
Deferred selling expenses 38.028 7.205 20.592
Deferred taxes - 13.099 - Prepaid expenses 16.423 13.522 15.283
5.616.585 4.321.581 5.901.703
Long-te rm Asse ts
Receivables f rom clients 2.411.275 1.662.300 2.075.161
Properties for sale 388.649 386.196 407.792
Deferred taxes 367.788 250.846 311.693Other 177.182 52.140 131.035
3.344.894 2.351.482 2.925.681
Investments 194.207 195.088 194.871
Property, plant and equipment 63.825 53.698 59.659Intangible assets 15.480 9.690 16.280
273.512 258.476 270.810
Total Asse ts 9.234.991 6.931.539 9.098.194
757
2,9222,236 2,075
3Q10 4Q10E 1Q11E 2Q11E
Bank Mortgage
Why Cash Burn should change to positive in 2011?
Cash burn continue high mainly due to Tenda’s units launched and sold mainly in 2007 and 2008 that are being built using it’s own capital, instead of the mechanism of Blue-Print mortgages (Crédito Associativo);
Going forward, Tenda is gradually increasing the use of Associative Credit over current sales (that already reached 62% in the 3Q10), contributing to reduce the Working Capital needs;
From now until June/11, Tenda will transfer approximately 7,000 units that did not contracted Blue-Print mortgage, meaning that the invested money will return to Company’s cash.
Tenda’s Transferred of Concluded Units to CEF - Pipeline
22%38%
51%62%
100%
78%62%
49%38%
2007 2008 2009 9M10 3Q10
Blue-Print Mortg. (Crédito Associativo) Tenda's Financing/Project Finance
Tenda is delivering units that did not contracted Blue-Print mortgage in
the past.
Tenda’s unit sales by type of finance
9,505 11,576 15,871 9,733 3,039
36
16.9%15.2%
17.3%
25.4%
18.9%
15.7%
12.9%14.9%
12.0% 12.5%11.8%
SG&A Expenses / Net Revenue
SG&A (Synergies)
60% Acquisition of Tenda
100% Incorporation of
Tenda
37
10.6%
8.4% 8.0%
13.5%
10.3%
8.4%
6.6% 6.7% 6.3% 5.9% 6.2%
G&A Expenses / Net Revenue
3Q10 3Q09 2Q10 3Q10 x 3Q09 3Q10 x 2Q10
Consolidated Selling expenses 53,887 55,556 61,140 -3% -12%G&A expenses 59,317 57,601 55,125 3% 8%SG&A 113,204 113,157 116,265 0% -3%Selling expenses / Launches 4.4% 10.8% 6.1% -644 bps -171 bpsG&A expenses / Launches 4.8% 11.2% 5.5% -640 bps -67 bpsSG&A / Launches 9.2% 22.0% 11.5% -1285 bps -238 bpsSelling expenses / Sales 5.3% 6.9% 6.9% -165 bps -158 bpsG&A expenses / Sales 5.8% 7.2% 6.2% -137 bps -37 bpsSG&A / Sales 11.1% 14.1% 13.1% -303 bps -195 bpsSelling expenses / Net revenue 5.6% 6.3% 6.6% -70 bps -96 bpsG&A expenses / Net revenue 6.2% 6.6% 5.9% -37 bps 25 bpsSG&A / Net revenue 11.8% 12.9% 12.5% -107 bps -71 bps
(R$'000)
A Typical Gafisa Project
38
Sales 30% 60% 70% 80% 87% 94% 100%
% Costs - 2,5% 15% 35% 65% 85% 100%
Revenues - 1,5% 10,5% 28% 57% 80% 100%
Collections (cumulative) 1% 4% 9% 11% 18% 25% 85% 100%
Launch Start Construction
Licensing: 6 to 9 months
End of
installments
0M 6M 12M 18M 24M 30M 36MUp to
100M
Delivery/
Mortgage
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