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1August 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.
3
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
110
84
72
36 36
16
PDG Cyrela Rossi MRV Brookfield
4
Shareholder Structure, Corporate Governance and Liquidity
True corporation listed on the NYSE and the most liquid Brazilian Real Estate company
Avg. Daily Trading Volume (R$ mm) - Last 90 days1
1. Source: Bloomberg as of August 2nd, 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
5
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 successful 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
6
SECTION 1
Competitive Advantages
7
Mid and Upper-Mid
Unit price: > R$200 thousand
Mid and Upper-Mid
Unit price: R$70 – R$500
Affordable Entry-Level
Unit price: R$50 – R$200 thousand
Multifaceted Residential Products in All Income Segments
Focused on the residential market, with 3 leading brands strategically positioned in
all income segments
Pre
se
nc
eS
ale
sC
on
trib
uti
on
1H
10
Inc
om
e
Se
gm
en
t
/ P
ric
e
48% 14% 38%
44 cities in 14 states 55 cities in 22 states 91 cities in 14 states
Co
mp
lete
d
Pro
jec
ts
17 projects/phases in 2009 5 projects/phases in 2009 130 projects/phases in 2009
Ch
ara
cte
ris
tic
s
Vertical
Metropolitan areas
Custom projects
Horizontal lot development
Suburban areas
Custom projects
Horizontal / Vertical
Metropolitan areas and surroundings
Standardized products
88
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, 2007
Notes:
1. Assumes an average ticket of R$190,000
2. 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
an
d U
pp
er-M
id
In
co
me
Aff
ord
ab
le
En
try-L
ev
el
São Paulo34%
Rio de Janeiro14%
Other Southeast9%
North5%
Northeast19%
Midwest12%
South7%
9
Landbank Distribution vs. GDP Distribution
National Footprint
National footprint captures both rapidly growing and large metropolitan regions
Geographic Footprint
Real GDP Growth 1
GDP Distribution - 2006Landbank 2Q10
Source: Company and IBGE
Note:
1. Nominal GDP growth rate per year for 2003 – 2006 adjusted by the average consumer price index (IPCA) of the period
2. Including Brasilia Federal District .
Brand States2 Cities Legend
14 44
14 91
22 55
Consolidated 23 129
North
5%Others Southeast
11%
Northeast
13%
Rio de Janeiro
12%
São Paulo
34%
South
16%
Midwest
9%
R$ 15.8 Billion
3.1%
4.7%
6.6% 6.9%
8.0%
South Midw est Southeast Northeast North
2,167
5,729
7,576 7,497
2,930
3,962 4,298 1,536
4,285 3,972 (1,712)
1,656
10,195
15,823 15,768
IPO 2006 2007 2009 1H10 Launches
Net Acquisitions
Actual 1H10
Gafisa Alphaville Tenda
10
1H10 Land bank PSV (R$ million)
Strategically Located Land Bank
Gafisa has a strategic land bank that allows for continued project launches
Land bank distribution
Total
31.44.042.9
39.3%15.890.5
96.84.329.2
41.37.518.4
CompanySwap
%
Future sales
R$ billion
Potential number of
units (% Gafisa)
*Note: Tenda 2007 represents Fit + Bairro Novo
4.7x
1.6x
63
85
188 195
2007 2008 2009 1H10
3,108
8,206
10,831
7,497
E: 20,000
2007 2008 2009 1H10/2010E
242386
513 54331
47
58 61
186
241
309367
459
674
880
971
2007 2008 2009 1H10
Intern Enginners Construction Architects On the Job
16,099
33,586
49,423 49,876
2007 2008 2009 2Q10
Units Under Construction Projects under Construction
Units Completed Number of Engineers
Source: Gafisa
Proven Track Record of Execution
11
1212
► 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 and solid reputation through: (i) a
higher sales speed (VSO); (ii) commanding premium prices; and (iii) easier access to
asset swaps / partnerships
1313
SECTION 2
Operating and Financial
Performance
6641,004
1,215
1,757
1,085
193
250
277
1707
276
988
580
664
1,204
1,740
3,022
1,835
2006 2007 2008 2009 1H10
9951,329 1,345
1,510
832
238300
377
245
60
932
1,361
670
995
1,627
2,578
3,248
1,747
2006 2007 2008 2009 1H10
1,005
1,698 1,913
1,265
800
237
313
420
325
300
1,970
617
587
1,005
2,236
4,196
2,301
4,000 to 5,000
2006 2007 2008 2009 1H10
1414
Launches, Contracted Sales and Revenues
Launches (R$mm) Pre-Sales (R$mm) Net Revenues (R$mm)
High growth rates over the last years ...
Note:
1 2010E guidance range announced by the Company
1
1,712
298
528
1,015
1,066
1,167
37.5%
34.6%35.1% 35.2%
36.4%
2006 2007 2008 2009 1H10
REF (R$ mm) Margem (%)
46
92
110
214
1626.9%
8.1%
9.6%9.9%
10.6%
2006 2007 2008 2009 1H10
Lucro Líquido (R$ mm) Margem (%)
89
180
259
530
352
13.4%
15.0% 14.9%
17.5%
2006 2007 2008 2009 1H10
EBITDA (R$ mm) Margem (%)
300
604
41
75
1515
EBITDA, Net Income and Results to be Recognized
Adjusted EBITDA1 (R$ mm) and
Margin (%)
Net Income (R$ mm) and
Margin 2 (%)
Results to be Recognized (Backlog4)
(R$ mm) and Margin (%)
… aligned with sustained growth in profitability
Notes:
1 Adjusted for stock options and excluding Tenda‟s goodwill net of provisions
2 Net income before minority interests and non-recurring expenses
3 2010E guidance range announced by the Company
4 Gross Profit
Tenda‟s goodwill net of provisions
19.2%
18.5% to
20.5% 3
949
713631 606
150
2011 2012 2013 2014 From 2015Project Finance (R$ mm) Corporate Debt (R$ mm)
1616
Debt Composition (R$ mm) and Rates1H10 Leverage (R$ mm)
Note:
1 Does not include investors obligations of R$380 mm
Debt Maturity Schedule 1 (%)
Net Debt /
Shareholders‟ Equity45.2%
8.2% - 11.5% (TR)
CDI + (0.7% – 4.2%)
CDI
10.6%
Solid Balance Sheet
37%20%
74%99%
100%
63%
80%26%
3,429
1,806
1,623
Total Debt Cash Net Debt
CDI + (1.5 – 3.3%)
3,429
1,708
678
663
380
Total
Investor Obligations
Debentures
Working Capital
SFH / Project
Finance
Liquidation Value (R$mn) Blue Chips (2Q10) Emerging Companies
Company Gafisa Peer1 Peer2 Peer3 Peer4
Receivables from Sold Units 7,643 9,936 11,296 5,574 4,737
(-) Taxes (516) (671) (762) (376) (320)
(-) Obligations from Sold Units (2,042) (3,009) (3,755) (1,591) (1,697)
Mkt Value of Units for Sale 2,726 3,633 1,869 1,648 2,052
(-) Taxes (184) (245) (126) (111) (139)
(-) Construction Obligations (636) (653) (229) (436) (898)
Book Value of Land 702 2,038 2,455 1,108 668
(-) Swaps booked in Advances (104) (521) (1,874) (413) (71)
(-) Payables from land acqs. (304) (407) (348) (229) (382)
Other Assets 92 287 3 39 10
(-) Other liabilities (228) - - - -
Cash and Equivalents 1,806 1,120 997 982 1,466
(-) Corporate Debt (1,721) (1,953) (1,192) (1,023) (1,061)
(-) SFH and other Project Finance (1,708) (1,757) (1,578) (409) (1,085)
(-) Minority Shareholders (79) (114) (345) (189) -
(+) Invest. in Subsidiaries 195 144 13 - 2
Liquidation Value 5,641 7,828 6,424 4,574 3,282
BV Adjusted 4,652 7,524 5,811 3,902 2,982
BV 3,638 5,843 4,205 2,702 2,465
Deferred Income 1,068 1,708 1,712 1,261 517
Deferred Revenues 3,209 5,059 5,642 3,058 2,374
Deferred Costs and Expenses (2,042) (3,009) (3,755) (1,591) (1,697)
Taxes (over Sales and Income) (99) (341) (175) (206) (160)
Avg Stake 95% 98% 94% 95% 100%
P/LV 0.95 1.34 1.55 1.58 1.32 1.45
P/BVAdj 1.15 1.39 1.71 1.86 1.45 1.60
P/BV 1.47 1.79 2.37 2.68 1.76 2.15
Market Cap 5,352 10,459 9,966 7,241 4,335
# of shares 437 571 426 490 269
Closing price (August 17th) 12.2 18.3 23.4 14.8 16.1
*Source: Barclays Capital Research and Companies' Information / (1) Excluding Gafisa
Avg(1)
1717
Trading Multiples
18
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
2020
Tenda: Differentiated Platform for the Affordable Entry-Level Segment
Through Tenda, Gafisa has a differentiated and developed platform to capture growth
in the affordable entry-level segment
Standardized Construction ProcessSalesInnovative Building Technology: Higher
ROE and Lower Cash Requirement
► 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
Standard
Super 6
Month 1 - 6 Month 7 - 19 Month 20
1 2 - 4 6
Launch Construction Delivery
Down Payment Requirements
Down
Payment
During
Construct.Financed
Super 6 6% - 94%
Standard 3% 17% 80%
S
21
Tenda: Valle Verde Cotia, SP
Aluminium Mold Construction Technology
► Construction cycle reduced from 12 to 4 months;
► Standardized projects;
► Less labor intensive;
► Less exposure to inflationary pressure during
construction period.
140
238
300
377
245
2006 2007 2008 2009 1H10
2222
► 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
AreaCommercial Area
Multi-family
Areas
Alphaville
Club
Alphaville: Differentiated Business for Residential Land Communities
n.a.
60%
59%
59%
41%
111
237
312
420
325
2006 2007 2008 2009 1H10
APPENDIX B
Real Estate Market Overview
101%
83%
18% 13%3%
Denmark UK Chile Mexico Brazil
2424
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. GDP1
Source: Central Bank, IBGE and ABECIP
1. Data from 2006. For Brazil, consider data from 2009
Brazil: high growth potential for home financing
A favorable growth trend for credit availability began 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 financing;
According to the Central Bank, the market is expecting
a Selic of 11.00% by the end of 2010.0
20
40
60
80
100
120
0%
5%
10%
15%
20%
25%
30%
35%
Dec-02 Apr-04 Sep-05 Feb-07 Apr-08 Apr-09 Mar-10
Selic (%a.a.) Real Estate Financing (R$ billion)
3 6 918
30 3451
3 46
7
1016
24
610
15
25
4050
75
2004 2005 2006 2007 2008 2009 2010E
SBPE FGTS
2525
Government programs were created to reduce the significant 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
2626
Government renewed MCMV program, giving more visibility 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$72 billion in subsidies;
► Continued growth for the next 3 years already
committed;
► General details to come up to 90 days after the
announcement;
► It confirms the government commitment to
provide financing for entry level homebuyers.
40%60% 60%
40%
29% 30%
20%11% 10%
MCMV I - target MCMV I - up to March 1st/2010
MCMV II - target
0-3 MW 3-6 MW 6-10 MW
330,191 2 million
► MCMV II income distribution followed the same
distribution of the contracted units from MCMV I:
# of units: 1 million
2727
Efficiency Gains under “MCMV” ProgramTenda contracted 15,129 units through April and has close to 17,000 units under CEF
analysis
Minimum Wages Caixa Econômica Fereral(1)
0 - 3 MW 250,3333- 10 MW 251,167TOTAL 501,500
(1) Until June 23 rd , 2010 for CEF . Breakdown between 0-3 and 3-10 based on the % from April 13th.
Period To be contracted(2) Contracted % MCMV TOTAL
2009 - 6,102 74% 6,1021Q10 - 2,788 88% 2,7882Q10 17,411 6,239 78% 23,650TOTAL 17,411 15,129 78% 32,540
(2) Units being contracted in 2010 and already filed with CEF untill Jun 2010.
Period Units % MCMV
2009 5,114 48%1Q10 1,898 81%2Q10 2,515 89%TOTAL 9,527 65%
Contracted Units in the "MCMV" I
Pipeline
Transferred
88 9417
177 176 145187
276
22629 38
39
4792 167
143
118132
55
223
267312
226
2003 2004 2005 2006 2007 2008 2009 23-Jun
Caixa - Others Caixa - MCMV Market
8 30
130
53412
22
42
33
268
8
17
10
727
60
188
96
37
2Q09 3Q09 4Q09 1Q10 Apr-100 a 3 SM 3 a 6 SM 6 a 10 SM Total
26 64 121191
267334 394
481
4469
95
120137
149
193
39
66
78
91
104114
140
75147
256
364
478
576656
814
abr/09 mai/09 jun/09 jul/09 ago/09 set/09 out/09 nov/09 dez/09 abr/10
0 a 3 SM 3 a 6 SM 6 a 10 SM Total
2828
CEF Real Estate Financing
Housing Financing Contracts (R$ bn)
2010 Contracts: Units („000) and Projects Inventory of Received Proposals („000 units)
Caixa Econômica Federal has reached historical records of real estate financing, and
is responsible for 73% of the market contracts
Source: Caixa Econômica Federal
CEF vs. Market – Financing of New Units („000 units)
503
145255
738
397240
Projects
5 69
13 15
23
47
31251326
425503
443515
897
2003 2004 2005 2006 2007 2008 2009 Up to June 10
Financing (R$ bn) Financing Amount ('000)
135262
495885
1,402
1,868
2,3252,815
3,149
3,966Projects
2929
APPENDIX C
Operating and Financial
Highlights
30
Main Financial and Operational Highlights
Operating and Financial Highlights (R$ 000) 2Q10 2Q092Q10 vs.
2Q09 (%)1H10 1H09
1H10 vs.
1H09 (%)
Launches 1,008,528 626,282 61% 1,711,738 786,525 118%
Launches, units - '000 4,398 2,568 71% 8,281 3,219 157%
Contracted sales 889,761 835,443 6.5% 1,747,082 1,394,008 25.3%
Contracted sales, units - '000 4,476 5,894 -24% 9,729 9,995 -3%
Completed Projects 631,216 263,926 139% 957,118 670,426 43%
Completed Projects, units - '000 4,782 3,784 26% 7,497 6,431 17%
Net revenues 927,442 705,818 31% 1,835,027 1,247,705 47%
Gross profit 279,492 191,353 46% 532,148 345,992 54%
Adjusted Gross margin (w/o capitalized interest) 32.8% 30.1% 271 bps 31.6% 30.9% 75 bps
Adjusted EBITDA (1)
183,970 111,319 65% 352,429 187,963 87%
Adjusted EBITDA margin (1)
19.8% 15.8% 406 bps 19.2% 15.1% 414 bps
Adjusted Net profit (2)
114,113 81,127 41% 193,737 138,182 40%
Adjusted Net margin (2)
12.3% 11.5% 81 bps 10.6% 11.1% -52 bps
Net profit 97,269 57,768 68% 162,087 94,501 72%
EPS (R$/share) 0.23 0.22 2% 0.38 0.36 4%
Number of shares ('000 final) 429,348 260,676 65% 429,348 260,676 65%
Revenues to be recognized 3,209 3,092 4% 3,209 3,092 4%
REF margin (3)
36.4% 36.4% 0 bps 36.4% 36.4% 0 bps
Net debt and Investor obligations 1,622,787 1,486,441 9% 1,622,787 1,486,441 9%
Cash and availabilities 1,806,384 1,056,312 71% 1,806,384 1,056,312 71%
(Net debt + Obligations) / (Equity + Minorities) 45.2% 65.6% -2046 bps 45.2% 65.6% -2046 bps(1) Adjusted for expenses w ith stock options plans (non-cash) and Tenda goodw ill net of provisions.(2) Adjusted for expenses w ith stock options plans (non-cash), minority shareholders and non recurring expenses(3) Results to be recognized net from PIS/Cofins - 3.65%; excludes the AVP method introduced by law 11638
