Brasil Brokers announces its 3Q09 results

Transcription

1 Brasil Brokers announces its results Rio de Janeiro, November 11, Brasil Brokers Participações S.A. (BM&FBovespa: BBRK3), a real estate brokerage and consulting firm with a strong presence in Brazil s major real estate markets, today announces its results for the third quarter of 2009 (). The Company s consolidated financial statements are prepared in accordance with generally accepted accounting principles in Brazil (BR GAAP), pursuant to Brazilian Corporate Law and the regulations of the Securities and Exchange Commission of Brazil (CVM). Conference Call Portuguese November 12, :00 a.m. (Brasília) 08:00 a.m. (NY) Ph.: +55 (11) Replay: +55 (11) Code: Brasil Brokers English November 12, :00 p.m. (Brasília) 12:00 p.m. (NY) Ph.: +1 (973) Replay: +1 (706) Code: IR Contact Álvaro Soares Chief Financial and IR Officer Highlights Contracted sales in totaled R$ 2.9 billion. A total of 14,702 units were sold in the quarter; Contracted sales in 9M09 totaled R$7.8 billion, with a total of 40,448 units sold. Contracted sales in grew by 6% over 2Q09; Contracted sales in the secondary market reached R$515 million, 12% up on 2Q09; Ph.: +55 (21) ri@brbrokers.com.br 1

2 Operating Performance The following tables show the Company s operating results for and the comparison with and 2Q09. Operating Highlights (1) 2Q09 ( 3) ( 3) PSV (R$ thousand) (2) 4,274,847 2,315,141 4,150,989 Launched Units 20,782 11,393 21,587 Contracted Sales (R$ thousand) 2,583,156 2,770,593 2,923,615 Units Sold 12,894 14,642 14,702 (1) The number of operational subsidiaries varied in the course of (2) Total PSV from developments launched by Brasil Brokers, on an exclusive or partnership basis. (3) Includes 100% of Abyara Brokers numbers. PSV(R$ MM) 4,275 4,151 Launched Units 20,782 21,587 Contracted Sales (R$ MM) Units Sold 2,924 14,702 2,583 12,894 2

3 PSV (R$ MM) Launched Units 4,151 21,587 2,315 11,393 2Q09 2Q09 Contracted Sales (R$ MM) Units Solds 2,771 2,924 14,642 14,702 2Q09 Sales by Market Segment 2Q09 In, Contracted Sales totaled R$ 2,924 million, of which R$ 515 million came from the resale of units, R$ 2,391 million came from the sale of launches and R$ 18 million from the sale of land. Sales of residential and commercial units totaled R$ 2,827 million (1). R$2,583 MM 8.4% R$2,924 MM 0.6% 17.6% 17.8% 73.8% 81.8% Primary Market Secondary Market Others (1) Contracted Sales of residential and commercial units exclude the contracted sales of Primaz and lands. (2) Others is composed of contracted sales of Primaz and the PSV lands. Sales by State 3

4 Primary Market In, contracted sales of residential and commercial units totaled R$ 2,391 million (1). Of this total, 72.4% was in the Southeast, 10.3% in the Northeast, 8.3% in the Midwest, 6.5% in the North and 2.5% in the South. AM 6% BA 14% Primary Market PA PE 3% GO3% 4% RS 4% MG 3% RN 3% DF 3% ES 2% Others 1% SP 36% PE RN 2% 3% GO 5% BA 6% RJ 14% Primary Market PA 4% MG 5% AM 2% Others 6% SP 53% RJ 18% Secondary Market In, the resale of units totaled R$ 515 million (1). Of this total, 81.7% were in the Southeast, 9.5% in the South, 3.4% in the Midwest, 3.4% in the Northeast and 2.0% in the North. Secondary Market Secondary Market SP 11% GO 7% MG 2% ES 1% Others 3% SP 9% GO 3% MG 8% ES 3% PA 2% Others 4% RS 12% RS 9% RJ 64% RJ 62% (1) Excludes contracted sales from Primaz and lands. 4

5 Sales by Income Segment Primary Market Of the total of R$ 2,391 million (1) in contracted sales in the Primary Market, 26.0% came from properties in the economic segment (up to R$ 150,000), 39.8% from the middle segment (R$ 150,000 to R$ 350,000), 21.0% from the mid-high segment (R$ 350,000 to R$ 650,000) and 13.2% from the high segment (more than R$ 650,000). Primary Market Primary Market Mid-High (R$350k to R$650k) 21% Middle (R$150k to R$350k) 45% High (above R$650k) 9% Economic (up to R$150 mil) 25% Mid-High (R$350k to R$650k) 21% High (above R$650k) 13% Economic (up to R$150 mil) 26% Middle (R$150k to R$350k) 40% Secondary Market Of the total of R$ 515 million (1) in contracted sales in, 23.0% came from properties in the economic segment (up to R$ 150,000), 35.0% from the middle segment (R$ 150,000 to R$ 350,000), 21.9% from the mid-high segment (R$ 350,000 to R$ 650,000) and 20.1% from the high segment (more than R$ 650,000). Secondary Market Secondary Market Mid-High (R$350k to R$650k) 16% High (above R$650k) 15% Economic (up to R$150 mil) 31% Middle (R$150k to R$350k) 38% Mid-High (R$350k to R$650k) 22% High (above R$650k) 20% Economic (up to R$150 mil) 23% Middle (R$150k to R$350k) 35% (1) Excludes contracted sales from Primaz and lands. 5

6 Other Operating Information The following table presents other operating information from the subsidiaries, by region, on September 30, Region Sales Forces Sales Point (1) Employess Southeast 6, Northeast South Middle West North TOTAL 8, ,080 (1) Includes 72 Rede Morar Sales Point Synergy Program In order to integrate the operations of the subsidiaries, we created the Synergy Program, whose key objectives are increasing revenues and business efficiency, reducing operating costs and standardizing processes and systems. The program is organized into fronts, and the status of activities of each front is given below: FRONTS KEY ACHIEVEMENTS IN 1, 2 and PLANS FOR 4Q09 Finance and Accounting - Centralization of accounts processing. Management Processes and - National Telephone Services Agreement Systems - Implementation of Shared Services Center; - Implementation of the Unique Sales System: Resales Module and Launch Module. Human Resources - Implementation of the Operating Indicators Award Program; - Workshops for Sales Managers; - Implementation of Variable Compensation for Partners; - Launch of Brasil Brokers' Sales Incentive Campaign. - Implementation of Profit Sharing Plan for managers and non-management staff; - Preparation of Sales Force Development Model; - Recruitment and Selection of professionals for the Shared Services Center. Marketing Primary Market - Standardization of the Subsidiaries' brands and standardization of communication in all channels. - Installation of Internet Committee. - Merger of Brasil Brokers operations in the state of Minas Gerais (Gribel and Pactual). - Implementation of Brasil Brokers Group s new Internet Project. - Continuation of implementation of Operating Standards for Launch Sales. Secondary Market - Implementation of the sales system to resell units in the subsidiaries DelForte Iprice, Abyara, Frema, Global, Redentora, Chão & Teto, Gribel Pactual, JGM, Abreu, Jairo Rocha, Basimovel Américas, Brito & Amoedo, Ética, Pointer and Sardenberg. - Continued implementation of the sales system for resales in other Subsidiaries; - Implementations: - Operating Standards; - Best operating and sales force organization practices. New Products / Services - Implementation of the Real Estate Financing Model in the Subsidiaries: Patrimóvel Niterói, Abreu, Basimovel Americas, Ética, Jairo Rocha, JGM, Tropical, DelForte Iprice, Frema, Abyara, Redentora, Brito & Amoedo, Chão & Teto, Global, Gribel Pactual, Pointer, Sardenberg, Triumphe. - Standardization of the Real Estate Financing Model in other Subsidiaries. 6

7 Economic and Financial Performance This section presents the Company s results for. The results of the Company consolidate 80% of the Subsidiary Abyara Brokers results. Service Revenue Gross service revenue from Brasil Brokers subsidiaries, consisting of brokerage commissions, totaled R$ 71.7 million in, generating an average commission of 2.5% from the contracted sales of R$ 2.8 billion (considering only 80% of Abyara Brokers contracted sales). After deducting sales taxes, net revenue in came to R$ 62.9 million, representing a 17% increase over the R$ 53.7 million in. Net Revenue (R$MM) Q09 Net Revenue by Region Net Revenue by Region Others 48% SP 28% Others 30% SP 46% RJ 24% RJ 24% 7

8 Cost of Services and Operating Expenses In the, the Company consolidated non-recurring expenses related to fees paid to legal consultants, consulting expenses, the Salão do Imóvel de São Paulo (Real Estate Event) and the personnel restructuring on our subsidiaries. The table below shows the effect of these expenses on the amounts booked. Total Costs and Expenses - Accounting Adjustments (R$MM) Services Costs (7.7) (3.1) G&A Expenses and Fees (33.4) (39.1) Non-recurring Expenses Adjusted G&A Expenses (32.7) (37.0) Others Operating Expenses (0.3) 0.2 Total Adjusted Operating Expenses (40.7) (39.9) Subsidiaries operating costs and expenses after adjustments totaled R$ 36.4 million. Adding adjusted expenses of the holding company, which totaled R$ 3.5 million, total expenses totaled R$ 39.9 million. Adjusted Net Income Adjusted net income in was R$ 13.8 million, representing an adjusted net margin of 21.9%. In subsidiaries net income totaled R$ 16.6 million, excluding results from the holding company. The adjustment in net income excludes the financial expenses booked in the period due to the adjustment to present value of accounts payable and receivable, amortization of goodwill from the acquisitions made in 2008, as well as non-recurring and restructuring expenses booked in the holding company and the subsidiaries. Reconciliation (R$ MM) Net Income Future Earnings Adjustment 2.9 (0.2) Goodwill Amortization Non-recurring Expenses Adjusted Net Income (1) Adjusted Net Margin 21.0% 21.9% (1) Adjusted Net Income is not na account method, consist in the period net profit less the goodwill amortization, present value adjustment and non-recurring expenses 8

9 Adjusted Net Income (R$MM) e Adjusted Net Margin (%) % 22% 23% 22% 2Q09 Adjusted EBITDA (1) Adjusted EBITDA (1) in was R$ 23.0 million, representing adjusted EBITDA margin of 36.6%. Reconciliation (R$ MM) Adjusted Net Income Financial Results (5.9) (0.5) Income Tax and Social Contribution] Non Operating Result (0.1) (0.0) Depreciation and Amortization Minority Interest Adjusted EBITDA (1) Adjusted EBITDA Margin 24.1% 36.6% (1) Adjusted EBITDA consists of income before net financial result, income tax and social contribution tax, depreciation and amortization, minority interest and non-operating income. Adjusted EBITDA is not a measure in accordance with generally accepted accounting principles in Brazil (BR GAAP), does not represent cash flow for the periods presented, and should not be considered a substitute for net income as an indicator of operating performance, or as a substitute for cash flow as an indicator of liquidity. Adjusted EBITDA does not have a standardized meaning and our definition of Adjusted EBITDA may not be comparable to that used by other companies. Adjusted EBITDA (R$MM) e Adjusted EBITDA Margin (%) % 37% 37% 37% 2Q09 9

10 Income Tax and Social Contribution Tax Income and social contribution taxes on net income totaled R$ 7.4 million in. The quarter s income tax and social contribution tax pertains to taxes of subsidiaries, equivalent to 10.4% of their gross revenue. Cash & Cash Equivalents Cash and cash equivalents in were R$ 53.8 million. These amounts basically refer to investments in bank deposit certificates and fixed income funds, with yield ranging from 100.0% to 110.0% of the overnight interbank deposit (CDI) rate. The Company also has receivables totaling R$ 59,3 million, with an average estimated term of 95 days. The Company has no exposure to derivatives or any other instruments with variable exchange rates or variable yields. Cash Flow (R$ MM) Cash and Cash Equivalents 44.4 Operating Activities 15.2 Investment Activities (13.7) Financial Activities 8.0 Cash and Cash Equivalents in the end of the period 53.8 Operating cash flow in was a positive R$ 15.2 million, thanks to the cash generated from operations, amounting to R$ 11.9 million and the reduction of R$ 3.3 million in working capital requirements. Cash flow from investment activities in the quarter was a negative R$ 13.7 million, mainly due to the payment of an installment for the acquisition of Frema S.A. of R$ 11.0 million, which did not represented a cash withdrawal. The additional R$2.9 million refers to the establishment of two new subsidiaries of Abyara Brokers in São Paulo and the remodeling of Brito&Amoedo s headquarters in Salvador. Cash flow from financing activities was a positive R$ 8.0 million. This amount is composed by a capital increase of R$10.5 million through the issue of shares which were totally subscribed by the founding partners of Frema S.A., using funds existing as part of the acquisition price and therefore not representing a cash increase. In addition, accounts payable from acquisitions totaling R$2.6 million were settled, of which only R$1.5 million represented a real cash withdraw due to the payment of an installment for the acquisition of JGM. 10

11 Estimates for Payment of Acquisitions and Goodwill Amortization The payments for acquiring our subsidiaries are calculated according to the net income of each of these, following a preset schedule (earn-out structure). The following table gives the revised and consolidated payment schedule as on September 30, Jairo Rocha and Frema have already completed the base period for pricing, having booked the results from January to December 2008 and JGM completed its period in February Payments - Cash (R$ MM) E Total Cash* Jairo Rocha JGM Frema Triumphe TOTAL Payments - Company Shares (R$ MM) E Total Shares* Jairo Rocha JGM Frema Triumphe TOTAL TOTAL * T he to tal value o f co mpanies acquisitio n indebtedness is the same number fro m the balance quarter acco rding to / 07 law, that brings the liabilities to the present value. At the end of, the Company s balance payable in cash relating to the acquisition of subsidiaries in 2008 was R$ 3.1 million payable in 2010, plus R$ 13.8 million in shares, with R$ 10.7 million payable in 2009 and R$ 3.1 million payable in These amounts include the adjustments according to Law 11,638/07, whereby the company s liabilities are calculated at present value using a discount rate of 8.75% p.a.. Of the 5,031,092 shares held in treasury post-ipo, 1,771,858 have so far been used to pay the initial installments for the acquisitions. After the acquisition of 511,100 shares, through the share buyback program, the Company has a balance of 3,770,334 shares in treasury. Debt At the end of, total debt and financing was R$ 0.2 million. The Company has no liabilities based on derivative operations or pegged to exchange rates. 11

12 Financial Data RESULTS (R$ thousand) PSV 4,150,989 4,274,847 Contracted Sales 2,923,615 2,583,156 Gross Revenue 71,679 61,726 (-) Dicounts and Rebates (3,305) (3,252) (-) Sales Taxes (5,483) (4,821) Net Revenue 62,891 53,653 Cost of Services and Personnel Expenses (37,358) (37,283) Cost of Services (3,111) (7,720) G&A (34,247) (29,563) Depreciation (1,915) (584) Financial Results Revenues Expenses (475) (378) Operating Result 23,987 16,144 Non operating Result Adjusted EBITDA 26,488 16,370 Result before Taxes 24,008 16,198 Income Taxes and Social Contribution Provisions (7,431) (6,494) Subsidiaries Net Income 16,577 9,704 Subsidiaries Net Margin 26.4% 18.1% Holding Adjusted Expenses (3,472) (3,429) Depreciation and Amortization (234) (199) Holding Financial Result 337 2,664 Investments Amortization - (4,767) Income Taxes and Social Contribution Provisions-Holdin - (291) Holding Adjusted Results (3,370) (6,023) Minority Interest (138) (39) Holding non-recurring Expenses (1,182) (703) Net Income 11,887 2,939 Net Margin 18.9% 5.5% Investments Amortization - (4,767) Adjusted Present Value Liabilities (11.638/07) 234 (2,857) Adjusted Net Income 13,770 11,266 Adjusted Net Margin 21.9% 21.0% Adjusted EBITDA 23,016 12,941 Adjusted EBITDA Margin 36.6% 24.1% 12

13 Consolidated Balance Sheet on September 30, 2009 (R$ thousand) Assets A S S E T S Cash, Cash Equivalents 53, ,231 Accounts Receivable 57,928 58,903 Advance from suppliers Tax to Recover 6,000 5,412 Loans and other Credits with Related Parties - - Prepaid Expenses 1,996 1,248 Other Current Assets 3,941 2,354 Total Current Assets 124, ,148 Noncurrent Assets Long Term Assets Accounts Receivable from Clients 1,337 3,319 Result from disproportionate interest 1,357 - Available properties for sales 2,894 66,450 Related parties Advance for future Capital Increase - - Other Credits ,157 70,631 Investments in Controled Companies - - Property 30,262 22,582 Goodwill Investments 308, ,859 Deferred 4, , ,753 Total Noncurrent Assets 345, ,384 Total Assets 469, ,532 13

14 Consolidated Balance Sheet on September 30, 2009 (R$ thousand) LIABILITIES AND SHAREHOLDER'S EQUITY Liabilities Loans and Financing 113 9,955 Suppliers 4,360 5,332 Wages and Burden Payable 8,328 7,121 Taxes and Contribution Payable 19,455 16,828 Advance from Clients 481 2,382 Dividends Payable 4 - Payable Accounts - Company Acquisition 16,882 56,544 Loans and other related parties payable 315 1,461 Usufruct of Results 943 2,253 Other Accounts Payable 4,575 3,428 Total Current Liabilities 55, ,303 Noncurrent Liabilities Long Term Liabilities Loans and Financing Provisions for Contingencies 2,419 2,552 Taxes Payable Payable Accounts - Company Acquisition 166,470 Investment Provisions (Losses) - - Others accounts Payable Total Non Current Liabilities 3, ,058 Minoritary Interest Shareholders' Equity Subscribed Capital 344, ,234 Capital Reserve 23,454 22,467 Accumulated Losses 42,145 41,357 Total Shareholders Equity 409, ,058 Total Liabilities and Shareholders' Equity 469, ,532 14

15 Consolidated Result Statements Period of July 1 to September 30, 2009 Financial Statements Revenues of Services 71,679 61,726 Dicounts and Rebates (3,305) (3,252) Taxes on Revenues (5,483) (4,821) Net Revenues 62,891 53,653 Cost of services provided (3,111) (7,720) Gross Income 59,779 45,933 Operating Costs and Expenses Administratives Expenses (34,640) (29,627) Management Remuneration (4,459) (3,749) Depreciation and Amortization (2,149) (783) Investments Amortization - (4,767) Financing Expenses (591) (3,240) Financing Income 1,297 6,262 Other Operating Revenues (Expenses) 198 (320) Equity income - - (40,343) (36,224) Operating Income 19,436 9,709 Non-operating Revenues (Expenses) Income before taxes 19,457 9,763 Income Tax (5,485) (4,948) Social contribution Tax (1,946) (1,837) Minority Interest (138) (39) Net Income for the period 11,887 2,939 15

16 Cash Flow Period of July 1 to September 30, 2009 CASH FLOW Net Income of the period from 04/01 to 06/30 11,887 2,939 Adjustments for reconciliation between losses and net operating revenue Depreciation 1,806 5,818 Amortization Credit Provisions (Losses) (2,129) - Provisions for contingencies (2) 28 Adjusted Net Income (Loss) 11,905 8,785 Variation between Assets and Liabilities Accounts Receivable 2,602 (5,135) Taxes to recover - (772) Accounts Receivable - related parties 357 1,117 Other current assets (1,252) (1,907) Advance for future Capital Increase - - Others Long Term Assets 1,065 (477) Suppliers 324 1,217 Wages and Burden Payable 362 1,790 Taxes and Contribution to recover 1, Taxes and Contribution payable (49) (12) Advances from Clients (347) 2,143 Payable to related parties (92) 156 Usufruct of Results (125) (208) Other Current Liabilities (492) 1,917 Others Long Term Liabilities (217) (1,939) 3,256 (1,703) Net Cash Used in Activities 15,161 7,082 From Investment Activities Share buy back - (1,055) Available properties for sales 200 (66,450) Fixed Assets (2,913) (8,721) Intangible Assets (964) (101,699) Intangible Assets (Payable Company Acquisition) (10,062) - Deferred asset - (563) Net Cash in Investment Activities (13,739) (178,488) From Financing Activities with Third Parties Loans and Financing (48) 9,729 Payable Company Acquisition (2,588) - Net cash from financing activities with third parties (2,636) 9,729 From Financing Activities with Shareholders Capital Increase 10,500 - Minority Shareholders Dividends (7) - Net Cash From Financing Activities with Shareholders 10, Availability Increase (Losses) 9,418 (161,632) Cash and Equivalent in the Beggining of the Period 44, ,863 Cash and Equivalent in the end of the period 53, ,231 16