Webcast 1Q16

15
Earnings Release Conference Call – 1Q16 May 10, 2016

Transcript of Webcast 1Q16

Page 1: Webcast 1Q16

Earnings Release

Conference Call – 1Q16May 10, 2016

Page 2: Webcast 1Q16

Agenda

2

Ricardo Ribeiro

Vice President

Fernando Ramos

CFO and IR Officer

Operational Highlights

Financial Highlights

Page 3: Webcast 1Q16

Launches

MCMV 2 and 345%

Medium

55%

3

106 138

258104102

337

262

703620 56

1Q15

LQM

475

1Q16

+9%

519

+87%

+417%

1Q16

LQM

3Q152Q15

101

45

4Q15

208174

1Q15

+132%

MCMV 2 and 3MUC¹

1. MUC: Comprises projects of the middle-income, upper-middle income and commercial segments

Launches: Development(PSV – R$ million)

Launches by Region – 1Q16(% PSV)

Direcional launched two projects , totaling a PSV of R$ 101 million, a growth of 417% when compared to 1Q15.

The highlight is the project Conquista Itaboraí, within the MCMV 2 and 3 segment, with a PSV of R$ 45 million;

In 1Q16, launches on the MCMV 2 and 3 increased 132% in comparison to 1Q15 and 87% LTM;

Page 4: Webcast 1Q16

Sales

Contracted gross sales amounted to R$ 207 million in 1Q16, representing the best quarter performance since 4Q14;

Contracted net sales reached R$ 118 million in 1Q16, representing an increase of 225% in comparison with the 1Q15;

The MCMV 2 and 3 segment represented 54% of the total PSV sold during the quarter;

1Q16 LTM, sales of MCMV 2 and 3 segment reached R$ 185 million, representing an increase of 44%.

4

Southeast

63%North16%

Midwest

21%

MCMV 2 and 3

54%

Medium33%

Upper-Middle + Commercial

13%

1. MUC: Comprises projects of the middle-income, upper-middle income and commercial segments

Contracted Net Sales: Development(R$ million)

Sales by Segment 1Q16 (Economic Segmentation - PSV%)

Sales by Region 1Q16(Geographic Segmentation - % PSV)

46128

18572 57 58 55

235

242

64

98

21 15

+225%

427

+18%

1Q16

LTM

713

+44%

160 173

3Q15

93

173

36

2Q15

112

1Q15

LTM

363

682

1Q16

118

207

4Q15

39

1Q15

36

104

Gross SalesMCMV 2 and 3MUC¹

Page 5: Webcast 1Q16

Sales Velocity

Sales Velocity (VSO) reached 10.9%;

Highlights to (i) the MCMV 2 and 3 segment that reached a VSO of 27% and (ii) inventory sales, which achieved a VSO of 11.0%.

5

VSO of Development(PSV - R$ million)

6087

52

109

32

5251

9.4%

25.0%

15.4%

29.4%

24.3%

11.0%

5.8%9.5%

7.0%3.7%

10.9%9.4%10.8%

4.2%

112

2Q15

6

3Q15

93

9.7%

104

4Q15

10

118

1Q161Q15

36

5

Sales of Launches VSO of Launches

Sales of Inventory VSO of Inventory

VSO Quarterly

Page 6: Webcast 1Q16

Sales Cancellations

72% of the units arising from canceled sales in 1Q16 were resold during the same period;

Concentration of sales cancellations in projects launched until 2013 as well as in the Northern region.

6

546445504

351406 391328395

288341

72%74%78%82%84%

72%63%63%60%59%

1Q164Q153Q152Q151Q15

Resale in the Period

% Resale (1Q16)

Resale (until 1Q16)

Cancellations

2015

7% 2014

11%

20135%

<2013

77%

North59%

Southeast

27%

Midwest14%

Sales Cancellations by Period of Launching (% Units)

Sales Cancellations by Region – 1Q16(% Units)

Sales Cancellations(Units)

Page 7: Webcast 1Q16

Inventories

989

4Q15 1Q16

990

Value Variation

and Swaps

18

Net Sales

118

Launches

101

By the end of 1Q16, Direcional had 3,255 units in inventory totaling a PSV of R$ 990 million in terms of market value

The MCMV 2 and 3 segment represents only 17% of the total inventory, despite the high volume of launches during the last quarters;

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27%

Finished Units

<201430%

2014

14%

2015

20%

20169%

26%

Southeast

North

66%

Midwest

8%

Inventory by Launch Period(% PSV)

Inventory by Region(% PSV)

Inventory Evolution(R$ million)

Page 8: Webcast 1Q16

Inventory - Finished Units

Decrease of 6% in the number of finished units in inventory (QoQ);

In 1Q16, Direcional sold 19% (168 units) of the units finished by the end of 2015;

26% of the inventory of finished units is comprised by hotel units, which have a low carrying cost, since the hotel units are already operational and generate revenue.

8

847899

116168

Concluded

Inventory 1Q16

Delivery and Sales

Cancellations Units

Gross Sales of

Concluded Units

Concluded

Inventory 4Q15

-6%

Southeast67%

North22%

Midwest

11%

Inventory Evolution (Units)

Finished Inventory 1Q16(Geographic Segmentation - % PSV)

Page 9: Webcast 1Q16

Land Bank – MCMV 2 and 3

Six plots of land were acquired for the MCMV 2 and 3 segment. The construction potential of these plots is 4,529 units corresponding to a PSV of R$ 553 million;

The average cost of acquisition corresponded to 13% of the potential PSV, 96% of the payments will be settled through swaps, which do not affect the Company’s cash position in the short term;

Accordingly, the land bank for MCMV 2 and 3 segment reached a potential PSV of R$ 4.2 billion, represented by 45,702 units;

By the end of 1Q16, Direcional's total land bank had a development potential of 67,184 units and a PSV of R$ 10.2 billion.

9

553

Land Bank 1Q16

4.247

Adjustment¹

12

Launches 1Q16

45

Acquisition of

Land 1Q16

Land Bank 4Q15

3.752

Southeast38%

North

19%

Midwest43%

Land Bank MCMV 2 and 3(Geographic Segmentation - % PSV)

Land Bank Changes MCMV 2 and 3(R$ million)

1. Adjustment: review of the assumptions regarding prices and projects, land plots sold/canceled.

Page 10: Webcast 1Q16

Fernando Ramos

CFO and IR Officer

Financial Highlights

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Page 11: Webcast 1Q16

Financial Results

11

85 80 83

13 15 14

97+2%

-1%

1Q16

24.0%

4Q15

95

23.8%

1Q15

98

24.4%

Gross Profit

Interest capitalized in costs

Adjusted Gross Margin¹

Revenues from Real Estate Sales

Revenues from Services

317 265 240

102 161 191

+1%

+3%

431

1Q164Q15

426

1Q15

419

Gross Operating Revenue(R$ million)

Adjusted¹ Gross Profit¹(R$ million)

1. Adjustment excluding interest on financing for construction;

Page 12: Webcast 1Q16

Financial Results

12

292627+9%

+6%

1Q16

7.0%

4Q15

6.6%

1Q15

6.7%

13138 +3%

+61%

1Q16

3.2%

4Q15

3.2%

1Q15

2.0%

% Net revenue

Selling Expenses

303136

9.9%

1Q15

9.1%

11.1%

-4%

-18%

1Q16

7.3%

8.6%

4Q15

7.7%

Net Margin

Net Margin Adjusted¹

Net Income

% Net revenue

G&A

G&A Expenses(R$ million)

Selling Expenses(R$ million)

Net Income(R$ million)

1. Adjustment excluding (i) Income Interest in SCPs and SPEs; and (ii) Income from Equity

Page 13: Webcast 1Q16

Cash Flow Generation

+1%

-19%

1Q16

96

72

24

4Q15

95

81

14

1Q15

118

109

9

SFH and others

"Associativo"

13

5

1Q162015

53

2014

158

2013

76

Cash Flow Generation (Cash Burn)¹(R$ million)

Mortgage Transfers(R$ million - cash inflow)

1. Cash flow generation: net debt variation net of dividends and share buyback programs

Page 14: Webcast 1Q16

Capital Structure

14

Caixa

1Q16

561

Cash Flow

Generation

5

SFH Debt

2

Corporate

debt

55

Caixa

4Q15

499

Net Debt

Without SFH

-265

Net Debt

333

Cash and

Cash

Equivalent

561

Debt

893

SFH

597

296

Finame and Leasing

2%

Debentures

12%

Working capital

9%

Construction Financing67%

CRI10%

33%29%

39%

561

893

597

296499

836

595

241685

915

554

361

Cash

Construction Financing (SFH)

Corporate Debt

% Corporate Debt

Dívida Líquida

Dívida Líquida/PL

18.4%13.0% 19.0%

230 337 333

1Q15 4Q15 1Q16

Gross Debt Breakdown

(% of Debt)

Capital Structure

(R$ million)

Debt

(R$ million)

Cash Burn Evolution – 1Q16(R$ million)

Page 15: Webcast 1Q16

Disclosure and Contacts

Fernando Jose Mancio Ramos

CFO | IR Officer

IR Team

www.direcional.com.b/ri

[email protected]

(55 31) 3431-5509 (55 31) 3431-5510 (55 31) 3431-5511

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This presentation contains certain forward-looking statements concerning the business prospects, projections of

operating and financial results and growth potential of the Company, which are based on management’s current

expectations and estimates of the future performance of the Company. Although the Company believes such

forward-looking statements are based on reasonable assumptions, it can give no assurance that its expectations

will be achieved. Expectations and estimates that are based on the future prospects of the Company are highly

dependent upon market behavior, Brazil’s political and economic situation, existing and future regulations of the

industry and international markets and, therefore, are subject to changes outside the Company’s and

management’s control. The Company undertakes no obligation to update any information contained herein or to

revise any forward-looking statement as a result of new information, future events or other information.