IMPORTANT INFORMATION

Transcription

1 INSTITUTIONAL PRESENTATION Dec/2013

2 IMPORTANT INFORMATION This document contains forward-looking information to take into account regarding the business prospects, operational and financial results estimates and the growth prospects for Brookfield Incorporações S.A.. These are only projections and, as such, are based purely on forecasts by the Board at Brookfield Incorporações S.A. in relation to the future of the business and its continued access to capital in order to finance Brookfield Incorporações S.A. s business plan. This forward-looking information depends, to a large extent, on changes in market conditions, government regulations, competitive pressures, development in the sector and the Brazilian economy, among other factors, as well as the risks presented in the disclosure documents archived by Brookfield Incorporações S.A. and are, therefore, subject to change without prior notice.

3 BUSINESS STRATEGY & ORGANIZATIONAL STRUCTURE

4 BUSINESS STRATEGY From an operational standpoint, BISA will continue its strategy focusing on 4 main pillars: Selective National Presence Focus on Middle Income Segment Leading presence in the metropolitan areas of São Paulo, Rio de Janeiro, Brasília, Goiânia, Campinas Target Geographic Distribution: São Paulo 40% - 50% Brasília and Goiania 20% - 30% Rio de Janeiro and Curitiba 20% - 30% Middle-income segment (units from R$170k to R$750k) should represent 50% of the business Large market segment with growth trend 80% of the mandatory funding allocated to the real estate sector must be used in this segment Balanced Portfolio Operate in all segments of the residential market and in the office development business Target business segment distribution: Affordable housing (units below R$170k): 15% - 20% Middle Income (R$170k to R$750k): 50% - 60% High (above R$750k): 10-15% Office (office suite & corporate): 10% - 20% Integrated Platform In-house construction Integrated and dedicated middle-office unit Integration process finalized 4

5 Goiânia Federal District Rio de Janeiro São Paulo SELECTIVE GEOGRAPHIC DISTRIBUTION Geographic Presence Market Share Contracted Sales 75% 4º 7% 5% 5% 5% 4% th Brasília Peer 1 Peer 2 Peer 3 Brookfield Peer 5 Outros Other Goiânia São Paulo Rio de Janeiro rd 3 61% 14% 9% 6% 5% 5% Peer 1 Peer 2 Brookfield Peer 4 Peer 5 Outros Other Economic Rationale for Seeking Local Leadership rd 3 69% Acquisition of land 8% 7% 6% 6% 5% Approvals Peer 1 Peer 2 Brookfield Peer 4 Peer 5 Outros Other Marketing strength Brand Supply Chain st 1º 67% Attracting talent GO 8% 7% 7% 6% 5% Brookfield Peer 2 Peer 3 Peer 4 Peer 5 Outros Other 5

6 NEW STRUCTURE CEO NICHOLAS READE Compliance TBA Real Estate Business Investment & Institutional Relations Construction Finance Legal ALESSANDRO VEDROSSI LUIZ FERNANDO MOURA MARCELO BORBA SERGIO CAMPOS DENISE GOULART Investor Relations Human Resources LUCIANO GUAGLIARDI LYGIA VILLAR 6

7 UNIQUE SHAREHOLDERS BASE BAM: High standard of Corporate governance. Long-term approach and financial expertise Extensive free float Management team aligned with shareholders interests Asset Management Prestigious global asset manager approximately US$175 billion AUM US$ 100 billion in real estate 100% 1 Brasil Brazil Participações One of the largest investment platforms in Brazil R$ 32 billion AUM Signatories to Shareholders Agreement 44.96% 2 Free Float 7.33% 46.64% 3 SOX Compliant 1 Brookfield Asset Management s investment on Brookfield Brasil Participações is through other subsidiaries 2 Brookfield Brasil Participações ownership includes 34,576,070 shares (6.00%) owned by BRKB RE OPP FUND LLC, a subsidiary of BAM 3 Free float does not Include 5,903,740 or 1.03% shares in treasury (September 30, 2013) and shares hold by management 7

8 OPERATING PERFORMANCE

9 LAUNCHES Only one project, with a PSV of R$ 40 mm, was launched in the quarter Two projects (Caminhos da Lapa Vanguarda in São Paulo and Damai in Rio de Janeiro) with a total PSV of R$ 350 mm have already been launched in October (R$ million) 577 1, % % % 2,675 2, % -21.8% 3,930 3, Q12 4Q12 1Q13 2Q M13 Launches Unit Price 3Q12 9M13 9M12 (R$ million) Residential % % % 1, % Affordable Up to R$ 170 thousand - 0.0% % - 0.0% % Middle R$ 170 to R$ 750 thousand - 0.0% % % % High Above R$ 750 thousand % % % % Office - 0.0% - 0.0% % % Office / Commercial* - 0.0% - 0.0% % % Total % % % 1, % *Note: including Malls and Hotels 9

10 CONTRACTED SALES In the 9M13, sales totaled R$ 1.9 bn, reaching 64% of the low end of sales guidance For the third consecutive quarter, sales exceeded launches, resulting in a reduction in inventory (R$ million) 714 1, % % % -23.5% +60.2% 4,387 3,621 3,356 2,260 1,925 3Q12 4Q12 1Q13 2Q M13 Contracted Sales Unit Price 3Q12 9M13 9M12 (R$ million) Residential % % 1, % 2, % Affordable Up to R$ 170 thousand % % % % Middle R$ 170 to R$ 750 thousand % % 1, % 1, % High Above R$ 750 thousand % % % % Office % % % % Office / Commercial % % % % Total % % 1, % 2, % 10

11 SALES OVER SUPPLY (SoS) SoS increased to 20.2% from 17.6% in the 2Q13, reflecting strong sales volumes in a quarter containing low launch activity Sales Over Supply (SoS) 31.3% 27.5% 27.0% Sales over Supply 21.1% 16.3% 16.0% 21.0% 17.6% 20.3% 20.2% 24.0% Sales over Supply 20.2% Region São Paulo 38.0% Rio de Janeiro 14.6% Mid West 11.9% São Paulo Countryside 43.8% Curitiba 28.0% Stage Launches 6.4% Inventory 20.4% 1Q 2Q 3Q 4Q

12 INVENTORY Inventory decreased 6% q-o-q to R$ 2.9 bn, due to the high volume of sales from inventory Equivalent to 11.3 months of LTM sales, a modest q-o-q reduction Completed units represented 11.9% of total inventory, compared with 10.7% in the 2Q13 Inventory at Market Value (R$ million) 3,383 3,179 2,815 3Q12 4Q12 1Q % 3,055 2, ,180 2Q Inventory by Region Inventory PSV (R$ Million) Months of Sale* São Paulo Rio de Janeiro Mid-West 1, São Paulo Countryside Curitiba Total 2, *Considering LTM Months of sale Completed (11.9%) Launching (12.1%) Under construction (76.0%) 12

13 DELIVERIES, MORTGAGE TAKEOUTS AND TERMINATIONS 9,025 units delivered in the 9M13 with a PSV of R$ 2.0 bn 5,615 contracts or R$ 1.0 bn transferred in the 9M13 Of the units terminated in the 9M13, 41% were resold in the same period Increased terminations reflect higher delivery volumes, coupled with efforts to improve the quality of our portfolio of receivables PSV Delivered (R$ million) +28.1% 1,968 PSV Transferred (R$ million) +70.6% 1,035 PSV Terminated (R$ million) +51.6% % 468 1, % % Q13 9M12 9M13 2Q13 9M12 9M13 2Q13 9M12 9M13 13

14 FINANCIAL PERFORMANCE

15 NET REVENUES, GROSS MARGIN AND BACKLOG Net Revenues (R$ million) Gross Margin +26.5% 26.8% 2.427, % +42.9% 1.918,9 18,6% 790,2 991,2 693,8 14,9% 2,1% 3Q12 2Q13 9M12 9M13 3Q12 2Q13 Results to be Recognized (R$ million) 34.0% 34.7% 32.1% Backlog margin -13.5% 1, , ,020.3 Gross Margin impacted by: I. R$ 45.9 mm write-off arising from Sítio do Tunga land sale II. Gross Margin ex adjustments R$ 34.4 mm adjustment to the 1 st sale of Sigma Tower and Mall (Giroflex), regarding the difference between the construction cost adjusted by INCC and the contract amount fully received upfront, thus not adjusted by inflation 1Q13 2Q13 III. R$ 38.2 mm adjustment from the budget review 15

16 SG&A AND OTHER EXPENSES Sales Expenses (R$ million) G&A Expenses (R$ million) -7.6% -3.8% % +28.2% +9.6% +11.7% Q12 2Q13 9M12 9M13 3Q12 2Q13 9M12 9M13 As a % of Net Revenues 4.3% 4.0% 4.4% 6.3% 4.6% 5.3% 4.6% 5.9% 6.6% 5.0% Other Expenses (R$ million) % % +83.0% Other Expenses primarily impacted by: -13,3-28,4 I. R$ 18.3 mm allowance for doubtful accounts for services related to construction contracts -62,4-59,8 II. R$ 8.7 mm write-off following the termination of partnerships -109,4 3Q12 2Q13 9M12 9M13 16

17 RECEIVABLES AND DEBT MATURITY 64% of total receivables to mature in 2013 and 2014 R$ billion Q Q Q13-3.7% Q13 Receivables R$ million Units Under Construction 2,674.6 Completed Units 1,167.4 Services 77.4 Adjusted Present Value (54.9) Provision for Losses (71.5) Total Receivables in Balance Sheet 3,793.0 Revenues to be Recognized 3,022.1 Advances from Customers (375.7) Total Receivables 6,439.4 Receivables vs. Debt Maturity (R$ million) 2,763 2,003 1,799 1,617 1, , After 2015 Corporate Debt Maturity in 2014: Working Capital: R$ 528 mm Debenture and other: R$ 273 mm Receivables Construction Loans (SFH) Corporate Debt 17

18 DEBT AND CASH CONSUMPTION Cash consumption was R$ 1.4 mm in the, a substantial q-o-q decline Increased contribution of SFH debt to 41% of total debt, up from 39% previously Net Debt to Equity ex-sfh of 55% Compliant with financial covenants Debt (R$ billion) Net Debt to Equity (%) With SFH Without SFH 1.55 SFH 1.38 Current Corporate 2.64 Long term 1.41 Without SFH Gross Debt Maturity Cash and equivalents Net Debt 3Q12* Q12 1Q Q * As previously disclosed. Not considering pro forma adjustments regarding JV deconsolidation. Cash Consumption from Operations 18

19 RECENT EVENTS & REMARKS

20 RECENT EVENTS Investigation from the Public Prosecutor of irregular practices by tax collectors related to the taxes on services ( ISS ) in the city of São Paulo The Company has been assisting the Public Prosecutor, providing all necessary information Based on the information gathered by the Company: There is evidence confirming that the invoices and related taxes on services were in compliance with applicable legislation These events do not constitute a material impact on the Company s financial position or assets. The investigation is being conducted on a confidential basis 20

21 REMARKS OUTLOOK Return to profitability is the main goal Confident in regional market strategy Continued focus on execution Ramp up in deliveries remains top priority Careful project selection 21

22 BRAZILIAN REAL ESTATE INDUSTRY

23 REAL ESTATE INDUSTRY - CREDIT Overall credit as % of GDP Mortgage as % of GDP 168% 129% 123% 111% 95% 76% 74% 39% Portugal United States Canada Korea Germany Chile South Africa Brazil Interest rates (SELIC % p.a.) Source: Financial Access Survey (FAS), European Mortgage Foundation and Brazilian Central Bank

24 REAL ESTATE INDUSTRY - AFFORDABILITY Example of mortgage conditions Unit Value LTV Interest rate (p.a.) Loan term (months) Monthly installment (R$ thousand) Required income (R$ thousand) , ,000 70%-80% 80%-90% 12.0% 7.0% ,987 1,365 6,624 4,553 Required income (minimum wages) Assumptions: Considering constant amortization

25 REAL ESTATE INDUSTRY - MORTGAGE Units Financed (thousand) s 90 s FGTS SBPE M13 25 Source: ABECIP

26 REAL ESTATE INDUSTRY - MORTGAGE Amount Financed (R$ Billion) FGTS SBPE M13 26 Source: ABECIP

27 Thousand units per year REAL ESTATE INDUSTRY - DEMOGRAPHICS Household formation Housing deficit (in thousand of units) 5,995 5,800 5,808 5, Source: IBGE

28 REAL ESTATE INDUSTRY INCOME DISTRIBUTION Income Distribution per Household ( E) 20% 55% 24% Brazilian Population Distribution % ( 193 million of inhabitants ) % A (Over R$ 8,000) B (Between R$ 4,000 and R$ 8,000) C (Between R$ 2,000 and R$ 4,000) D (Between R$ 1,000 and R$ 2.000) 2% E (Income up to R$ 1,000 ) - 10,000,000-5,000, ,000,000 10,000,000 Women Men 35% between 20 and 40 years old 6.2% 12% 23% 29% % Source: Ernest Young. FGV and IBGE 41% 2030E (216 million inhabitants ) 37% between 20 and 40 years old - 10,000,000-5,000, ,000,000 10,000,000 Women Men 28 Source: IBGE - Projection of the Brazilian Population 1980/ Revision 2008

29 REAL ESTATE FUNDING Mandatory* Minimum of 80% Regulated Interest Rates under the SFH (Housing Credit system) ** Real Estate Funding Savings Account Minimum of 65% Maximum of 35% Maximum of 20% Free Interest Rates can be charged by the Banks** Other Savings Account and Requirement (R$ Billion) 67.7% 69.5% 72.7% 73.1% 72.7% 72.6% 72.7% 72.6% 73.2% 73.7% 73.6% 73.5% Requirement Savings Account Jan-13 Feb-13 Mar-13 Apr-13 May-13 Jun-13 Jul-13 Aug-13 Sep-13 * Mandatory: 65% of the lesser of the two: 1) Arithmetic average of the daily balance of savings account deposits of the month under reference or 2) the arithmetic average of the daily balances of savings account deposits in the twelve (12) months preceding the month under reference. ** 80% from the Resources of the Real Estate Funding, should be applied to regulated interest rates and up to 20% can be applied to free interest rates. 29 Source: ABECIP and BCB

30 Luciano Guagliardi Director Alexandre Freire Manager Guilherme F. Gonçalves Specialist Telephone: Magalhães de Castro Avenue, 4,800, Tower 3, 1st e 2nd floor São Paulo, SP, , Brasil INVESTOR RELATIONS CONTACTS