2q08 results presentation

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2Q08 Results

2

2Q08 Results Conference Call

Heitor CantergianiCEO

Overall Outlook

Main Operating and Financial Highlights

Leonardo DinizSales Officer

Launches and Sales

Economic Segment

Geographical Expansion

Gerson CohenController

2Q08 Performance

Margin Analysis

Indebtedness

Agenda

3

Heitor Cantergiani

Overall Outlook


4

Launches

2Q08: R$ 1,085 million in 18 projects

1H08: R$ 1,353 million in 23 projects

Contracted Sales

2Q08: R$ 711 million in 2,819 units

1H08: R$ 1,127 million in 4,430 units

Margin recovery in 2Q08 (gross margin of 39.7% and EBITDA margin of 16.0%)

Economic Segment

R$ 264 million launched in 8 projects

R$ 500 million in the pipeline to be launched in 2008

R$ 4.4 billion land bank

Land bank

R$ 16.3 million PSV, of which 72% in swaps

Accounting Practices in line with International Standards

Awards – Magazine Isto É Dinheiro

Best Company in Corporate Governance Management in general category

Best Company in HR Management in the engineering and construction sector

Overall Outlook


5

Leonardo Diniz

PSV, Sales, Geographical Expansion


6

2Q08 - 18 projects:

Launches

2Q07 2Q08

Rossi

776

309

401

92

Launches Breakdown by Price Segment and State in 1H08

120%

1H08 - 23 projects

Partners

1H07 2H08

811

954

399142

42%

Campinas, Florianópolis, Fortaleza, Guarulhos, Juiz de Fora, Mogi das Cruzes, Belo Horizonte, Novo Hamburgo, Porto Alegre, Recife, Rio de Janeiro, São Paulo, SJ Rio Preto, Vila Velha.

Launches 1H08 (R$ million)

47%

24%

9%

7%

7%

6% > R$ 500,000

Affordable Segment

R$ 200,000 to R$ 350,000

< R$ 200,000

Commercial

R$ 350,000 to R$ 500,000

26%

23%

10%

10%

8%

6%

5%

5%4% 3%

São Paulo (metropolitan region)

São Paulo (other cities)

Ceará

Rio Grande do Sul

Minas Gerais

Rio de Janeiro

Espírito Santo

Rio Grande do Norte

Santa Catarina

Pernambuco

493

1,085

953

1,353


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Contracted Sales Breakdown by Price Segment and State in 1H08

1,127

2Q08

Rossi

533

24717871

124%

Partners

1H07 2H08

534

846

281159

63%

Contracted Sales (R$ million)

27%

25%15%

14%

13%

6% > R$ 500,000

R$ 200,000 - R$ 350,000

R$ 350,000 - R$ 500,000

Affordable Segment

< R$ 200,000

Commercial

26%

22%

19%

10%

9%

5%

4%5%


São Paulo (other cities)

Rio Grande do Sul

Rio de Janeiro

Espírito Santo

Ceará

Rio Grande do Norte

Paraná, Minas Gerais, Pernambuco and

Santa Catarina

318

711 693

2Q07


1H08

Launches: R$ 264 million

3 Buildings

5 Residencial Plazas

Contracted Sales: R$ 126 million

2H08

Projects: approximately R$ 500 million in PSV, 28 projects and 5,000 units

6 Buildings

15 Residencial Plazas

7 condominium in 2 Villa Flora’s community

Villa Flora Plazas Buildings

8

AffordableSegment


9

Potential PSV (100%): R$ 16.3 billion

Rossi’s Share: R$ 11.8 billion

Land bank PSV in R$ million

2Q08

Total

Total Rossi

16,271 11,763

Breakdown

Launches PSV 2Q08

Final 1Q08

Origination 1Q08

Final 2Q08

15,247

(1,085)

2,109

16,271

10,684

(776)

1,854

11,763

Acquisition Method

Land Bank distributed in 138 lands in 53 cities, not concentrated.

13.2 million m2 buildable area

future launches (in units) – 87,816

4 to 5 years PSV in the bag for future launches

Land Bank

Swap by unit46%

FinancialSwap26%

Cash28%

Partners

Rossi

9.6 10.1

4.0 4.6

0

4

8

12

16

3Q07 4Q07

10.7

4.6

1Q08

11.8

4.5

2Q08

R$ billion


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Land Bank : Potencial PSV

Land Bank 2Q08 (in R$ million) - PSV by Region and by Segment

State Affordable Segment

R$ 120,000 to

R$ 200,000

R$200,000to

R$350,000

R$350,000to

R$500,000

> R$500,000

Commercial Lots Total %

Bahia 75 322 1,053 152 - - - 1,603 10%

Ceará 323 - - 104 - - - 428 3%

Distrito Federal - 63 46 - - 242 - 351 2%

Espírito Santo 368 - 36 - 62 102 - 595 4%

Goiás 797 43 - - - - - 840 5%

Mato Grosso do Sul 53 - - - - - - 53 0%

Minas Gerais 134 85 - - 248 - - 467 3%

Paraná 90 - - - 122 111 - 323 2%

Rio de Janeiro 35 165 1,242 195 180 - - 1,817 11%

Rio Grande do Norte 134 - 70 - - - - 205 1%

Rio Grande do Sul 1,855 87 474 823 - - - 3,239 20%


673 86 355 771 974 176 224 3,259 20%

São Paulo(other cities)

729 203 1,036 400 82 4 639 3,092 19%

Total 5,295 1,055 4,312 2,445 1,666 635 863 16,272 100%

Distribuition 33% 6% 27% 15% 10% 4% 5% 100%


Focus on low to middle income segments – 66% PSV < R$ 350,000

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Geographical Presence

53 Cities 14 States

PE

RN

PB

RS

PR

SP

MG

RJ

ES

BA

SC

CE

GO

MS

AM

PAMA

AL

AC

RRAP

ROTO

PI

MA SE

Regional São Paulo (RSP)São PauloCotiaGuarujáGuarulhosJacareíMogi das CruzesOsascoPraia GrandeSantana de ParnaíbaSanto AndréSantosSão Bernardo do CampoSão Caetano do SulSão José dos CamposSão PauloMato Grosso do SulCampo Grande

Regional Belo Horizonte (RBH)Minas GeraisBelo HorizonteNova LimaUberlândiaDistrito FederalBrasíliaÁguas ClarasGoiásGoiânia

Regional Sul (RPOA) ParanáCuritibaSanta CatarinaFlorianópolisRio Grande do SulCanoasNovo HamburgoPorto AlegreSão Leopoldo

Regional Rio de Janeiro (RRJ)Rio de JaneiroNiteróiRio de JaneiroVolta RedondaEspírito SantoSerraVila VelhaVitóriaMinas GeraisJuiz de ForaBahiaLauro de FreitasSalvador

Regional Nordeste (RNE)CearáFortalezaPernambucoRecifeRio Grande do NorteNatal

Regional Oeste Paulista (ROP)São PauloMaríliaRibeirão PretoSão CarlosSão José do Rio Preto

Regional Campinas (RCPS)São PauloCampinasHotolândiaIndaiatubaJaguariúnaPaulíniaPiracicabaSorocabaSumaréValinhosVotorantim


Long Term Sustainable Competitive Advantage: Building up Local Know-How

12

Gerson Cohen


Operating Performance

66.0

115.5 122.6

180.6

2Q07 2Q08 1H07 1H08

176.1

291.1342.9

496.6

2Q07 2Q08 1H07 1H08

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Financial Highlights (R$ million)

Net Revenue Gross Income and Gross Margin

37.5%

39.7%

35.8%

36.4%

Unearned Revenue and Results Jun/08 Mar/08 Var.

Unearned Revenue 1,460.8 1,165.7 25.3%

Unearned Results 506.0 409.0 23.7%

Backlog gross margin 34.6% 35.1% -0.5 p.p.

65%

45%47%

75%


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Gross Margin Breakdown and Performance

Net Operating Revenue(R$ million)

2Q08 2Q07 Var. 1H08 1H07 Var.

Sale of property and services 273 167 63% 469 336 39%

Monetary Variation (INCC) 30 14 118% 46 17 172%

(-) Taxes over sales (12) (5) 146% (19) (10) 82%

Total 291 176 65% 497 343 45%

Construction works + lands 166 106 57% 299 212 41%

Financial Charges 10 5 110% 17 9 97%

Total 176 110 59% 316 220 43%

Gross MG 39.7% 37.5% 2.2 p.p 36.4% 35.8% 0.6 p.p.

Adjusted Gross Mg (-) Finan. Charges 43.0% 40.1% 2.9 p.p. 39.8% 38.3% 1.5 p.p.

Adjusted Gross Mg (-) Finan. Charges (-) INCC 36.4% 35.0% 1.4 p.p. 33.6% 35.0% -1.5 p.p.

Adjusted Gross Mg (-) INCC 32.8% 32.2% 0.6 p.p. 29.8% 32.4% -1.5 p.p.


36.646.6

62.267.9

2Q07 2Q08 1H07 1H08

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Financial Highlights (R$ million)

EBITDA and EBITDA Margin Net Income and Net Margin

35.050.8

63.471.1

2Q07 2Q08 1H07 1H08

20.8%

16.0%

18.1%

13.7%

19.9%

17.4%

18.6%

14.3%

EBITDA 2Q08 2Q07 Var. 1H08 1H07 Var.

Operating Income (Loss) 56 42 33% 81 77 5%

(+) Depreciation and Amortization 0 0 43% 1 1 41%

(+/-) Financial Expenses (Revenues) (15) (8) 100% (24) (18) 31%

(+) Financial Charges 10 5 110% 17 9 97%

(-) Profit sharing (4) (3) 61% (6) (5) 20%

EBITDA 47 37 27% 68 62 9%

EBITDA Margin 16.0% 20.8% -4.8 p.p. 13.7% 18.1% -4.5 p.p.

45%

11%

27%

9%


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Total Debt: R$ 623.3 million

Cash Position: R$ 134.2 million

Net Debt: R$ 489.1 million

Shareholders’ Equity: R$ 1,135.1 million

Indebtedness

Cash and Banks

Investments - ST

Investments - LT

Linha Stand by Bradesco R$ 100 millionDebentures R$ 300 million

17%

35%

48%76%

23%

1%

Construction Financing - LT

Debentures

ConstructionFinancing - ST

Working Capital51% 18%

15%

16%


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Share Performance

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Analyst CoverageInstitution Analist Contact

UBS PactualGuilherme Vilazante Gordon Lee

[email protected]

[email protected]

Credit Suisse Marcelo Telles Vanessa Quirog

[email protected] [email protected]

Bradesco Carlos Firetti Marcos Suzaki


JP Morgan Adrian HuertaSomesh Agarwal


Bulltick Rafael Pinho [email protected]

Santander Marcello MilmanGonzalo Fernández


BB Investimentos Antonio Emilio Ruiz [email protected]

Unibanco Carlos Macedo [email protected]

Merrill Lynch Alexandre Miguel Carlos Peryrelongue Esteban Polidura

[email protected] [email protected] [email protected]

Deutsche Bank Dan McGoeyMichelle Dorea


Citigroup Cecília del CastilioRodrigo Villanueva Bravo


Banco Fator Renato Pinto [email protected]

Itaú Tomas Awad [email protected]

Goldman Sachs Jason B. Mollin [email protected]

Raymond James Conrado Vegner [email protected]


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IR Team

Sergio Rossi CuppoloniInvestor Relations Officer

Maria Claudia BiolchiniInvestor Relations [email protected]. (55 11) 3759-7516

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DisclaimerThis material is a presentation of general background information about Rossi Residencial S.A. (“Rossi”) as of the date of this

presentation. Information contained herein has been summarized and does not purport to be complete. This presentation shall not be

considered an advice of investment by potential investors. This presentation is strictly confidential and may not be disclosed to any third

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This presentation contains statements and information that are forward-looking pursuant section 27A of the Securities Act of 1933, as

amended, and Section 21E of the Securities and Exchange Act of 1934. Such forward-looking statements and information are only

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