Apresentação institucional 2 t13 en
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The document provides an institutional presentation for LPS Brasil for the 2nd quarter of 2013. It begins with disclaimers stating that the presentation does not constitute an offer of securities and contains forward-looking statements. It then highlights LPS Brasil's leadership position in the primary real estate brokerage market in Brazil, its unique platform in both the primary and secondary markets, and its joint venture with Itaú-Unibanco to provide mortgage loans through CrediPronto!. The presentation concludes by emphasizing LPS Brasil's solid sales performance, strong established client base, wide range of real estate products and services, and top management team in the industry.
Apresentação institucional 2 t13 en
- 2. Disclaimer This presentation does not constitute an offer, or invitation, or solicitation of an offer to subscribe for or purchase any securities neither does this presentation nor anything contained herein form the basis to any contract or commitment whatsoever. The material that follows contains general business information about LPS Brasil – Consultoria de Imóveis S.A (“LPS”) as of June 30th, 2013. It is not intended to be relied upon as advice to potential investors. The information does not purport to be complete and is in summary form. No reliance should be placed on the accuracy, fairness, or completeness of the information presented herein and no representation or warranty, express or implied, is made concerning the accuracy, fairness, or completeness of the information presented herein. This presentation contains statements that are forward-looking and are only predictions, not guarantees of future performance. Investors are warned that these forward-looking statements are and will be subject to many risks, uncertainties, and factors related to the operations and business environments of LPS and its subsidiaries such as competitive pressures, the performance of the Brazilian economy and the industry, changes on market conditions, among other factors disclosed in LPS filed disclosure documents. Such risks may cause the actual results of the companies to be materially different from any future results expressed or implied in such forward-looking statements. LPS believes that based on information currently available to LPS management, the expectations and assumptions reflected in the forward-looking statements are reasonable. Lastly, LPS expressly refuses any duty to update any of the forward-looking statements contained herein. 2
- 4. Awards and recognitions | Recently “The hearts of 96% of people beat stronger for Lopes” Top of Mind IBOPE In research conducted in São Paulo, IBOPE Intelligence, revealed that1: • 9 out of 10 residents of the city know the brand Lopes • 96% would consider the brand when buying • 67% had any contact with the company, and among these, 76% would recommend Lopes The 200 best Brazilian companies | 2012 Época Negócios 360º Guide2 Evaluation of 6 scopes: • Financial results • HR Practices • Governance • Environmental • Process of innovation • Ranking: Future vision 50º: Lopes 68º: Homebuilder 85º: Homebuilder 96º: Homebuilder 104º: Shopping Mall 117º: Homebuilder 1) Survey conducted between Jul 26, 2012 and Aug 08, 2012. 2) October, 2012 issue. Preparation: Fundação Dom Cabral. 4
- 5. Awards and recognitions| 2012 Top Imobiliário Award Considered the main award of the real estate industry in Brazil Lopes has been winning every Top Imobiliário since its first edition in 1993 Master Imobiliário Award Award organized by Sindicato da Habitação de São Paulo (Secovi-SP) and Federação Internacional das Profissões Imobiliárias, suported by Grupo Estado Lopes was awarded in the segment “Institucional” by 2011 Annual Report of the Brazilian Real Estate Market Ranking Valor 1000 Listed by Valor Econômico as one of the 1000 largest business groups in Brazil Highlighted as the 20th higher net margin among all groups 8th place in value generation among service companies IG/ Insper Award Assertive M&A strategy, expanding the business to other regions of the country Lopes was considered the largest company in real estate brokerage and consulting in Brazil, in the last five years VII Award Relatório Bancário CrediPronto! was awarded in the segment “Best Online File Management” Highlight for the efficiency in the mortgage approval 5
- 6. The Brokerage Market Has No Other Company With Our History and Track Record Mr. Francisco Lopes initiates his brokering activities First TV advertisement for a real estate development 1935 40´s 50´s The company’s first logo Launches one of the first buildings under the condominium concept Launch and sale of 14 office buildings at Av. Paulista Launch and sale of 11 office buildings at the Faria Lima region Creation of the launching system with sales stands and marketing materials, attracting customers, specially during weekends Becomes a reference in real estate launches and presents its new logo 60´s Start of long term partnership with Gomes de Almeida Fernandez (Gafisa) 70´s Introduction of the concept of condominium clubs First “Top Imobiliário” award, in 1993 – Largest Brokerage Company 80´s 90´s Identifies Marginal Pinheiros as an attractive area and launches one of the first buildings in the region Starts up sales of hotel condominium (Flats) Partner of Grupo Espírito Santo in the sale of one of the largest launches in Lisboa: Parque dos Príncipes More than 300 clients in the primary market (homebuilders) divided between listed and nonlisted companies 5 acquisitions in the primary market and 13 acquisitions in the secondary market The secondary market has become responsible for 25% of total sales Breakeven point of LPS Brasil’s stake in Credipronto! in 4Q12 Credipronto! has reached R$ 3.1 billion in average portfolio balance in June 2013 Lopes’ follow-on 00´s 2010s Lopes becomes an important player at the segment of gated communities 7 acquisitions in the primary market Triples in size in a decade, strengthening its leadership Lopes’ IPO in 2006 Lopes starts its geographic expansion process Lopes’ website become leader on real state market Joint Venture with Banco Itaú in order to create CrediPronto!, our mortgage company 6
- 7. LPS Brasil Investment Highlights CrediPronto!, Mortgage company, with highest growth in mortgage industry. Asset Light with low execution risk Top management team in industry Unique position in primary market Unique opportunity to consolidate the secondary market 7
- 8. LPS Brasil: Unique Business Platform Primary Market Secondary Market Mortgage Loan + Low, mid and high-income segments Focus on secondary market, with a unique model of own stores and a network of licensed brokers Growth through acquisitions Joint Venture with Banco Itaú to provide mortgage loans Top vehicle to Invest in Brazilian Real Estate Market. 8
- 9. Management Team Top Management Team in Industry Partners & Associates Partnership Program: Summing up over 300 Years of Real Estate Experience Over 30 Partners & Associates with stock Investment and long term alignment with company Retention / Incentive tool for Top Performing Employees 9
- 10. Asset Light Service Based Business Model Brokerage Business Primary Market Mortgage Business Secondary Market Immediate simple revenue recognition Asset light Yearly Investment = Depreciation Easy short term adjustment in G&A, in case of a market downturn. Asset light Inexistence of physical offices (operates inside brokerage stores) Mortgage portfolio generates recurring cashflow. 10
- 11. Virtuous Cycle of the Business Model Creating Strong Barriers to Entry Solid Sales Performance Total transactions closed of R$ 5.4 billion in 2Q13 and R$ 9.7 billion in 1H13, up 9% from 2Q12 and 1H12. Leader in the primary market CrediPronto! originated R$ 530 million in 2Q13 and R$ 4.5 billion since its creation in 2008. : unique platform to develop the secondary market : partnership with one of the largest retail banks in the world, Itaú-Unibanco Most visited website in the real estate sector: more than 15 million visitors in 2012. Strong Established Base Wide Range of Products Leading, nationally recognized brand Present in 10 Brazilian States and in the Federal District Extensive distribution channel Database with more than 2 million clients More than 300 homebuilder clients One-stop-shop: unique and complete solution for the client High Retention of Talent Sales force of more than 16,000 independent brokers Attracts and maintains its sales force 11
- 12. Institutional Website LEADS www.lopes.com.br • 10 million visitors in 2012 Organic: 48% • iPhone and Android App. Mobile version. • First brokerage company to launch an App for iPad Direct: 26% Paid: 44% Strong investment in online media Source: Google Analytics, • 185k Properties listed • 70k on the Primary Market and 115k on the Secondary • 35-40% exclusive sales Largest Website among Real Estate Companies Strong Lead Generation Higher sales conversion 12
- 13. Strong database of clients Sales Force More than 2.0 million Media POS Source: Lopes database - Lopesnet • Over 2 million clients Database Homebuilders • Online and offline client sources • A structured CRM for serving clients from different backgrounds Online Lopes Website 13
- 14. Top of Mind: Lopes has been frequently mentioned among Real Estate Subjects Talking about Viral Reach Total Reach Frequency per Unique User • Leader in social networks • Approximately 1,000,000 Facebook fans • High engagement level and spontaneous mentions 14
- 15. LPS Brasil’s Market Mix São Paulo 14% 11% 12% 12% 9% 9% 10% 12% Rio de Janeiro 12% 11% 9% 9% 13% 5% 53% 56% 2Q10 3Q10 8% 12% 8% 11% 11% 10% 8% 12% 12% 15% 13% 14% 14% 4% 5% 4% 4% 4% 3% 22% 21% 20% 20% 19% 21% 52% 51% 50% 50% 52% 54% 53% 4Q11 1Q12 2Q12 3Q12 4Q12 1Q13 2Q13 4% 25% 18% 24% 49% 50% 47% 47% 4Q10 1Q11 2Q11 3Q11 *Others: Northeast, Espírito Santo, and Minas Gerais. Others* 11% 7% 19% South 12% 10% 12% 17% 10% Brasília 21% 15
- 16. LPS Brasil’s total transactions closed Transactions Closed (R$ billion) Primary market Secondary market 18.2 15.7 19.0 3.8 4.6 1.3 10.1 0.7 9.3 0.6 14.4 5.2 2.8 0.3 2.5 2006 0.3 8.9 9.4 2009 14.4 8.7 2008 14.4 2.2 6.7 9.7 2.3 7.4 4.9 2007 2010 2011 2012 1H12 1H13 16
- 17. LPS Brasil in the Primary Market 17
- 18. Market Intelligence Launches by Market – Brazil – 2012 79.7 billion / 183 thousand units Total Brazil 28.5 11.1 2.0 1.9 1.5 1.3 1.1 1.0 0.7 0.3 Recife Florianópolis Vitória Campinas Manaus Natal Belém Others 2.0 Goiânia 2.2 Santos 2.4 Fortaleza 2.7 Salvador 3.0 P.Alegre 3.3 DF BH Greater RJ MRSP 3.9 Curitiba 10.8 Brazil still represents a case for growth in the primary market Source: LPS Brasil Market Intelligence 18
- 19. Significant Creation of Demand Demographic Bonus Population Pyramid (millions of people) 250 200 150 56% 55% 55% 58% 60% 64% 68% 70% 69% 67% 2010 63% 60% 100 50 0 1950 1960 1970 1980 1990 2000 2010 2020 2030 2040 2050 2060 90+ 80-84 70-74 60-64 50-54 40-44 30-34 20-24 10-14 0-4 10% 5% 0% 2060 5% 90+ 80-84 70-74 60-64 50-54 40-44 30-34 20-24 10-14 0-4 10% 10% 5% 0% 5% 10% Total Population (Million) Economically active population = 15 – 64 years old Number of Families by Income Segment (millions) Social classes1 Population from 18 to 64 years old 2009 2020e Growth 2007 - 2030 (8%) 31.7 18% 36% 78% 29.1 160% 233% 291% 27.6 21.8 64% A, B and C classes 2007A 15.5 82% D and E classes 3.3 R$1k to R$2k R$2k to R$4k 2030E 11 8.4 Up to R$1k 433% R$4k to R$8k 1.1 4.3 R$8k to R$16k 0.3 1.6 Above R$ 16k The demographic bonus, combined with economic growth, will lead 35.6 million people to move up from D and E classes to A, B and C classes over the next 10 years. These families will certainly be seeking better living conditions. Source: IBGE, Bird, Febraban and FGV 1) Source: PNAD/IBGE Preparation: Bradesco. Take into account RO, AC, AM, AP, PA and RR regions 19
- 20. National footprint Stake (%) Payment (R$ million) 51% 13.82 51% Federal District greenfield DF SP 51% 142.22 Espírito Santo MG RJ ES 60.52 São José dos Campos 10.21 Rio de Janeiro BA 15.01 51% 80% PE 49.52 Campinas greenfield CE CE Payment (R$ million) 100% São Paulo Stake (%) Bahia 60% greenfield 11.32 Minas Gerais Ceará PR greenfield SC 51% RS 60% 8.12 100% 4.12 5.51 Sul Pernambuco 100% 41.02 51% 36.71 Lopes tracks developers’ regional movements, consolidates its position as the largest consulting and sales player 1) Considering the base scenario of the acquisition 2) Concluded Acquisitions 20
- 21. Sales Expertise in all Market Segments Habitarte – May/13 Location São Paulo/SP Sales HIGH 391 un. – R$ 11,486/m² Jardim das Perdizes – Mar/13 Location São Paulo/SP Sales MEDIUM-HIGH 640 un. – R$ 8,200/ m² Fatto Reserva Vila Rio – May/13 Location Guarulhos/SP Sales ECONOMIC 380 un. – R$ 4,100/m² Porto Atlântico – Mar/13 Location Rio de Janeiro/RJ Sales BUSINESS UNITS 804 un. – R$ 15,382/m² Ibis Budget SP - Mar/13 HOTEL Location São Paulo/SP Sales 163 un. – R$ 340,000 CASE 100% sold. Developer : Yuny / Stan CASE 76% sold. Developer : PDG / Tecnisa CASE 74% sold. Developer : Plano&Plano CASE 100% sold. Developer: Odebrecht CASE 100% sold. Developer : You 21
- 22. Transactions Closed – Primary Market Transactions Closed – Primary Market (R$ billion) 14.4 9.4 14.4 14.4 8.7 6.7 7.4 4.9 2.5 2006 2007 2008 2009 2010 2011 2012 1H12 1H13 LPS Brasil took advantage of Listed Homebuilders growth through Capital raises. (equity + debt) 22
- 23. Limited exposure to large homebuilders Breakdown – Transactions Closed 2Q13 22% Primary Market 50% 44% 56% 61% 60% 61% 39% 40% 39% 2012 2Q12 2Q13 47% 30% 26% 30% Non-listed Homebuilders Listed Homebuilders Secondary market 50% 2010 44% 2011 Listed Non-Listed 23
- 24. Breakdown Homebuilders Breakdown – Homebuilders Breakdown Top 5 Homebuilders 5% 51% 47% 45% 36% 33% 4% 4% 6% 5% 5% 6% 49% 53% 55% 64% 67% 2011 Other Homebuilders 2012 1Q13 2Q13 Top 10 Homebuilders in Sales 5% 4% 5% 7% 5% 5% 7% 7% 2010 3% 6% 5% 5% 8% 2010 4% 10% 9% 7% 5% 2011 2012 1Q13 2Q13 1st 2nd 3rd 4th 5th 24
- 25. Real Estate Market Overview – Prices Evolution of Average Launches’ Prices in SP R$/sq m Nominal 8,160 6,750 8,960 7,330 5,300 1,480 1,480 1,680 1,710 1,860 2,120 2,450 2,770 3,160 3,170 3,380 3,290 3,550 3,930 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 1Q13 2Q13 INCC Adjusted 5,550 5,200 5,610 5,400 5,380 5,660 5,970 5,810 5,690 7,810 7,910 8,530 9,090 6,590 5,480 5,520 5,110 5,030 5,210 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 1Q13 2Q13 * Launches occurred in residential vertical in SP Capital Source: EMBRAESP 25
- 26. Lopes’ Confidence Index (LCI) Lopes is the first company to create a Real Estate Consumer Confidence Index. Lopes’ Confidence Indexes (LCI) 151 134 Expectation Index The survey take into account the opinion for the next 6 months about the situation of Brazil’s economy, the financials of household and the intention to acquire a property Jun-13 Apr-13 May-13 Present Situation Index The survey take into account the summation of the present situation index and the expectation index Mar-13 Jan-13 Lopes' Confidence Index Feb-13 Dec-12 Oct-12 Nov-12 Sep-12 Jul-12 Aug-12 Jun-12 May-12 Apr-12 Feb-12 Mar-12 Jan-12 Nov-11 Dec-11 Sep-11 Oct-11 Jun-11 Aug-11 May-11 Apr-11 Mar-11 Jan-11 Feb-11 Dec-10 Nov-10 Sep-10 Oct-10 Jul-10 Aug-10 Jun-10 Apr-10 May-10 Mar-10 Jan-10 Feb-10 Nov-09 Dec-09 Sep-09 Oct-09 Aug-09 Jul-09 Jun-09 May-09 Apr-09 117 The survey take into account the current opinion about the situation of Brazil’s economy, the financials of household and the intention to acquire a property Lopes’ Confidence Index intend to measure clients confidence, so Lopes can follow and anticipate, in the short term, housing purchase tendency. The sample has 524 interviews, with Grande São Paulo resident clients, which contacted Lopes in the last 3 months and are interested in purchasing a new home. (basis: jan/2009 = 100) Source: Lopes Market Intelligence 26
- 27. LPS Brasil in the Low Income Segment 27
- 28. HABITCASA: Focus on Low Income Segment Focus on Low Income Segment Units up to R$ 300 thousand The Habitcasa brand is applied in all Lopes’ markets 28
- 29. Transactions Closed by Price Segment – Primary and Secondary Markets Transactions Closed R$ 4.9 billion R$ 5.4 billion 2Q12 2Q13 6% 8% 37% 31% 23% 44% 27% 24% Number of Transactions Closed 15,072 units 12,991 units 2Q12 2Q13 9% 15% 41% 16% 24% 24% 36% 35% 29
- 30. LPS Brasil in the Secondary Market 30
- 31. Pronto!: A Natural Consolidator Well Defined Acquisition Model with a Successful Track Record Unique Platform Poised for Growth Present in 10 States and the Federal District – Covers 85% of the Brazilian GDP in 2010, combined 1 – 74 own stores – 105 licensed brokers – Strong presence in São Paulo and Rio de Janeiro Solid client base Appreciation and alignment of interests – Earn-out – 51% ownership stake Successful acquisitions through the years – 19 acquisitions since July 2010 focused on the secondary market – Benchmark for future partners – Accretion Strong internet presence Unique one-stop-shop business model Acquisition strategy: – Companies with expertise in their regional markets – Companies with limited access to capital – Well positioned in relevant markets – Widespread network Diversified products in the portfolio Natural Consolidator 1 – Source: IBGE Potential synergies: – Scale and reach: network effect – Access to mortgage financing – Expertise of LPS Brasil management 31
- 32. Pronto! Acquisitions* Stake (%) Payment (R$ million) Stake (%) Payment (R$ million) 51% 10.01 55% 25.61 51% 6.61 51% 17.31 60% 24.31 51% 15.51 60% 20.91 51% 7.11 51% 12.21 73% 2.61 60% 8.41 51% 4.91 Pronto has 179 stores in 10 States + Federal District : 74 owned stores and 105 licensed brokers * Average of 40% in downpayment and 60% in earn outs linked performance 1) Considering the base scenario of the acquisition 32
- 33. Transactions Closed Historical in the Secondary Market Transactions Closed – Secondary Market ( R$ billion) 25% 24% 2.2 24% 2.3 1H12 1H13 21% 4.6 3.8 11% 7% 7% 6% 8% 1.3 0.7 0.3 2006 2007 0.6 2008 2009 0.3 2010 2011 Secondary Market Sales over total Transactions Closed 2012 Secondary Market Transactions Closed Strong growth of Secondary Market in our transactions closed. 1H13 secondary sales kept 24% of total sales (R$2.3 billion) . 33
- 34. CrediPronto! 34
- 35. Mortgage Market Mortgage Market as a % of GDP | Brazil 2011, others 2010 85% 63% 63% 62% 61% 60% 52% 41% 36% 23% 22% 16% 10% Source: Abecip, Brazil Central Bank, Federal Reserve, Haver. Preparation: Goldman Sachs 5% 5% 35
- 36. Market Potential for Real Estate Financing Quantitative Housing Shortage (millions of homes) Growth Drivers Housing deficit 7.9 – 7.2 million houses (2009) 6.7 Incipient mortgage loan market 6.3 5.4 Declining interest rates 5.8 Rising employees’ income Growing availability of long-term funding Increasing secondary market financing Increasing family turnover 1991 Mortgage Loan Access (% by Social Class)2 2000 2006 2007 2008 Family Turnover3 9.0 – 10.0x 7.7% 5.0% 4.0x 3.0% 1.8x 1.7% Classes A and B Class C Class D Class E G-7 Source: Bacen and ABECIP Notes: 1 Data from 2006, except for Brazil (2009) 2 FGV’s Center for Social Studies, 2010 3 Represents the number of times a family moves to a different house during their lifetime. Source: Credit Suisse Mexico Brazil 36
- 37. Joint Venture Lopes-Itaú Lopes and Itaú created the first and biggest pure mortgage company of Brazil. Direct and exclusive access to its customer database Seamlessly integrated operation with Lopes’ sales process, including an incentive compensation plan Lopes media exposure Leadership position in their respective markets Management Excellence Service excellence Competitive financing terms and conditions Speed and quality of processing Experienced credit analysis Successful exposure to the lending business and in joint ventures High Value Brands Strengthening of mortgage origination and other related services. 37
- 38. Differentiated Model: One-Stop-Shop Secondary Market: a significant potential for origination Distinctive channel for clients in the secondary market Focus 74 own stores and 105 licensed real estate brokers in 10 States and the Federal District Over R$ 4.5 billion in financing Relevance Selective acquisitions to replicate the successful formula used in the primary market Incipient market in Brazil with huge expansion potential Growth Potential 33% of Pronto!’s contracted sales are financed by Credipronto! Synergies 50% of CrediPronto! transactions are originated through Pronto! Use of LPS Brasil’s platform and significant reduction in CAPEX requirement Winning Model 38
- 39. CrediPronto! Volume of Origination ( R$ million) Volume of origination accumulated1 ( R$ million) 4,489 530 378 178 2Q12 2Q13 Portfolio Balance ( R$ million) jan/10 jun/13 1) Does not include amortization 3,328 2,266 The Average Portfolio Balance in 2Q13 was R$ 3.1 billion. Ending portfolio balance 2Q12 Ending portfolio balance 2Q13 39
- 40. CrediPronto! Ending Portfolio Balance 3,328 (R$ MM) 2,986 2,771 2,492 2,266 1,989 1,756 1,454 1,162 jun/13 mar/13 dec/12 sep/12 jun/12 mar/12 dec/11 sep/11 jun/11 mar/10 707 dec/10 sep/10 jun/10 392 517 881 The ending portfolio balance grew an average of 6.1% per month since jun/10 and it’s already R$ 3.3 billion. 40
- 41. Credipronto!: Unique Partnership to Capture Mortgage Loan Market Potential Business Highlights Innovative Real Estate Financing Process + Market Leader Largest Private Bank in Brazil Credit Analysis 24 hours Assessment of the Property Legal Analysis Until 3 working days Issuance of the Contract 2 working days 3 working days Release of Resources 5 working days Profit Sharing with limited credit risk Leverage on LPS Brazil’s points of sale Efficiency in Release of Credit Differentiated process of approval and release of funds Unprecedented credit in the market Evolution of Origination (base 100 = Jan-10)1 5,8% 5,1% 6,1% 5,7% 1,9% 1,7% 2,4% 2,4% 168 177 245 145 147 241 Ranking of Real Estate Financing 2Q13 (R$ MM) 7,3% 6,4% 6,8% 6,9% 7,4% 7,5% 8,5% 7,9% 8,5% 10,0% 3,0% 2,8% 3,1% 2,8% 3,0% 2,4% 2,9% 2,5% 2,6% 5,0% 412 376 411 370 433 416 506 610 0,0% 438 144 179 209 198 2,694 209 243 251 245 -10,0% Mercado Market Share CDP! 530 -15,0% 2Q10 3Q10 4Q10 1Q11 2Q11 3Q11 4Q11 1Q12 2Q12 3Q12 4Q12 1Q13 2Q13 -20,0% Credipronto! 8.5% Market Share* 20% of Itaú -5,0% 334 209 11,731 Market Share CDP! (Private Banks) 1,489 Caixa Itaú 2,329 1,592 1,503 Banco do Santander Bradesco Brasil 370 147 HSBC Banrisul 37 Citibank 25 Poupex High Growth Potential – Real Estate Financing equals only 5% of Brazilian GDP2 1 ABECIP 2 Bacen * Excluding Caixa 41
- 43. Transactions Closed Transactions Closed Number of Transactions Closed (R$ MM) 4,902 1,236 5,352 1,192 15,072 12,991 2,574 2,184 3,666 2Q12 Primary market 4,160 12,498 2Q13 2Q12 Secondary market Primary market 10,807 2Q13 Secondary market Transactions Closed in 2Q13 increased 9% compared to 2Q12 43
- 45. 2Q13 Financial Highlights Net Revenue (R$ MM) 137.4 106.6 2Q12 Net Income Attributable to Controlling Shareholders before IFRS1 Net Margin (%) (R$ MM) 16.8 Earnout 120.6 2Q13 EBITDA2 EBITDA Margin (%) (R$ MM) 40.6 (30%) - 12.8 63.1 (46%) Non-recurring³ - 12.8 48.4 28.4 (23%) (40%) 40% 40%28.9% (40%) 40% 2Q12 3) 27.8 (27%) 1) 2) Non-recurring³ 2Q13 2Q12 2Q13 42.4 40% 31.3% We consider the net income adjusted by non cash IFRS 3 effects (Business Combination) the most accurate net income indicator. Includes results from subsidiaries and companies under shared-control, in accordance with equity accounting, and results from non-controlling shareholders. Note: EBITDA is not an accounting measure and does not represent the cash flow for the reported periods, and therefore should not be used as an alternative to cash flow as a measure of liquidity. The Company’s EBITDA was calculated in accordance with CVM Instruction 52. Non recurring: Partial recognition of the 2nd installment of CrediPronto's earnout, expenses related to CrediPronto's earnout and restructuring charge 45
- 46. 2Q13 Results 46
- 47. Lopes Net Commission Net Comission Fee BRAZIL Primary SP Habitcasa RJ Other Markets Secondary SP RJ Other Markets 2Q11 3Q11 4Q11 1Q12 2Q12 3Q12 4Q12 1Q13 2,4% 2,4% 2,4% 2,3% 2,4% 2,4% 2,4% 2,4% 3,0% 1,9% 2,0% 2,1% 2Q13 2,4% 2,9% 2,1% 2,2% 2,1% 3,1% 2,1% 2,1% 2,1% 2,8% 2,0% 2,1% 2,1% 3,1% 1,9% 2,1% 2,0% 3,0% 2,1% 2,0% 2,1% 2,9% 2,0% 2,2% 2,1% 2,9% 2,4% 2,2% 2,1% 2,9% 2,4% 2,1% 2,1% 2,3% 2,3% 2,5% 2,4% 2,4% 2,4% 2,4% 2,3% 2,5% 2,2% 2,3% 2,3% 2,2% 2,0% 2,5% 2,4% 2,3% 2,1% 2,2% 2,2% 2,5% 2,3% 2,3% 2,0% 2,4% 2,2% 2,3% 47
- 48. CrediPronto! (R$ thousand) P&L* 2012 Total Executed contracts 1,503,028 Opening portfolio 1,767,940 Closing portfolio 2,771,051 Average portfolio balance 1 2,069,854 Financial Margin 46,655 % Spread 2.3% (-) Sales taxes -3,756 (-) Total costs and expenses -58,099 (-) Backoffice Expenses -14,193 (-) Sales Expenses -20,383 (-) Commissions paid -14,574 (-) Insurance and claims (+/-) -1,091 (+) Other revenues (Financ.) 288 (-) ADA -8,146 (-) IRPJ/CSLL (Itaú Balance) -6,636 (=) Net result -21,836 % Net Margin -50.90% 50% Profit Sharing -10,918 (+) Retention of Commissions 2,972 CrediPronto! Result (LPS) -7,946 1 – Weighted average portfolio balance • The numbers of the managerial P&L were audited for 2012 by Ernst&Young and, due to its managerial nature, it does not follow accounting standards. 48
- 49. CrediPronto! Breakeven Point CrediPronto! 4Q12 -92 365 3Q12 -2.375 Oct, 12 -3.120 2Q12 1Q12 Nov, 12 193 Dec, 12 -650 -2.359 CrediPronto! achieved breakeven point in November 2012, marking the moment the operation became profitable 49
- 50. Allowance for Doubtful Accounts Example of P&L with a financing contract for a $200 unit: Month 1 Month 2 Month 5 Month 8 Financial Margin $100 $100 $100 $100 Expenses¹ -$60 -$60 -$60 -$60 Specific Allowance - -$5 -$25 +$200 Result $40 $35 $15 $240 Recovery of Property Default Sale of the recovered property ¹ Including general allowance Ex: Sale for $300 Ex: Sale for $150 +$100: Profit for the bank -$50: Loss of the bank 50
- 52. Lopes’ Contracted Sales Seasonality 41% 37% 31% 25% 21% 17% 2005 32% 29% 29% 22% 18% 23% 22% 14% 2006 2007 1Q 23% 33% 28% 24% 19% 16% 15% 2008* 2Q 30% 26% 25% 2009 * The seasonality can not be verified in 2008, because of the effects of the world financial crisis. 24% 19% 2010 3Q 27% 30% 2011 27% 26% 26% Average of Historical Seasonality of the fourth quarter: 30% 21% 2012 4Q 52
- 53. Ownership Structure Ownership Structure | September 2013 31.7% 45.3% 0.2% Rosediamond 22.8% Chairman and Vice Chairman Management Free Float Total of 114,381,766 common shares 53
- 54. Company Roadmap Long Term Strategic Goals Mantain Leadership in Primary Market Achieve dominant position in Secondary Market, Growing from 26% to 40/50% of our Sales Grow the Mortgage Portfolio, achieving high profitability levels Develop other Opportunities tied to Services in Real Estate Market. 54
- 55. Contacts INVESTOR RELATIONS CONTACT E mail: ri@lopes.com.br Website: www.lopes.com.br/ri 55