Presentation of 1Q08 Results
May 13, 2008
Comments on the 1Q08
2
Leonardo Corrêa – Executive Vice-President and Investor Relations Officer
Consistent Growth
Operation Synchronism
Integrated Business model.
Financial and Operational Results: consequence of an operation with consistent
growth in development, sales and homebuilding.
Efficiency in the development of new projects.
Sales speed supported by growth in the homebuilding capacity.
3
4
Operation Synchronism (continued)
PSV R$'000 (%MRV)R$ 184,269
PSV R$'000 (%MRV)R$ 337,337
PSV R$'000 (%MRV)R$ 1,199,948
Contracted Sales R$'000 (%MRV)R$ 110,293
Contracted Sales R$'000 (%MRV)R$ 206,239
Contracted Sales R$'000 (%MRV)R$ 717,030
Net Revenue. R$'000R$ 25,760
Net Operating Revenue R$'000R$ 140,306
Net Operating Revenue R$'000 R$ 384,120
2005 2006 2007
PSV R$'000 (%MRV) Contracted Sales R$'000 (%MRV) Net Operating Revenue R$'000 (%MRV)
MRV LOG
5
Business: Development, contract Warehousing, rental of Distribution Centers,
Industrial Condominiums, HUBs and Logistics Park;
Shareholders: MRV Engenharia e Participações S.A. (65%) and Autonomy
Investimentos S.A. (35%);
Capital Commitment: R$ 40 million capital investment;
Independent Management: activities conducted by its own body, independently
from MRV;
MRV maintains its focus on development and building in the low-income segment;
Key Success Factors: (i) strong demand in the incipient Brazilian market for
logistics parks; (ii) market know-how for logistics centers, (iii) expertise in the market
of real estate receivables, (iv) availability of initial capital and v) synergy with MRV
Engenharia for land selection and acquisition.
Operational and Financial Performance
6
PSV of R$691.5 million in the 1Q08, with 6,728 units launched a 34.8% growth over 4Q07, with
R$513.2 millions and 4,531 units in the period.
Contracted sales of R$340.1 million in the 1Q08, with 3,210 units. A 36.2% growth over the 4Q07 and a
161.2% growth when compared to the 1Q07.
Land bank of R$10.3 billion on April 30th, 2008 almost stabilized when compared to the last period on
December 31, 2007.
Continuous geographic expansion, covering 60 cities in April 2008.
Increase of 42.7% in net operating revenue in the 1Q08 over 4Q07, reaching R$184.0 million in this
period.
Gross Income reached R$75.7 million and the gross margin reached 41.1% in 1Q08. A 38.4% growth
when compared to the last period, and a 232.0% growth over 1Q07.
EBITDA margin in 1Q08 reached 24.2% and EBITDA totaled R$44.5 million, a R$12.4 million growth over
4Q07.
Net Income in the 1Q08 was R$50.8 million, and adjusted net margin was 27.6%. Net income grew 11.8%
over 4Q07.
Highlights
7
3.066 2.6973.861
5.4786.768 6.919
1.439 1.688
1.769 2.218
3.002
4.852
9.340
18.410
2.9063.579
2002 2003 2004 2005 2006 2007 1T07 1T08
FGTS SBPE
Real Estate Market for the Low-Income Segment – Credit Expansion
Fonte: CBIC - Boletim Estatístico Jan/2008; Bacen, Abecip
1Q08: january and february 2008
Source: BACEN, CEF and CBIC at www.cbicdados.com.br
Note: The number of units financed with SBPE resource is obtained trhough the summ of
financing for real estate acquisition (new and used) and for construction (which from
January 2008 on, also included Building Materials, refurbishment and expansion) 8
16
3.4
23
13
5.0
06 19
7.2
86
28
3.7
85
24
1.0
49
24
7.6
84 3
20
.25
1
39
8.6
71
52
2.3
01
52
6.2
08
98 99 2000 01 02 03 04 05 06 07
FGTS SBPE
FUTURO
TOTAL SBPE + FGTS OUTSTANDING AMOUNTS
AND CONTRACTED VOLUME (R$’MM)
Nº OF UNITS FINANCED TRHOUGH FGTS AND SBPE
... Outstanding SBPE + FGTS amount is sufficient to finance the increased demand in this market.
PSV (%MRV, R$‘000)
9
Up to 80.000
11%From 80.001
to 130.000
71%
From
130.001 to
180.000
15%
Over
180.000
3%
Launch Mix - 1Q08
Up to 80.000
13% From 80.001
to 130.000
56%
From
130.001 to
180.000
8%
Over
180.000
23%
Launch Mix - 4Q07
214.0
513.2
691.5
1Q07 4Q07 1Q08
↑223,1%
↑34,8%
Price range up to R$130 thousand has been growing in launches’ mix.
Contracted Sales (MRV%, R$’000)
10
Up to 80.000
20%
From 80.001
to 130.000
46%
From
130.001 to
180.000
22%
Over
180.000
12%
Sales Mix - 1T08
Up to 80.000
18%
From 80.001
to 130.000
43%
From
130.001 to
180.000
21%
Over
180.000
18%
Sales Mix - 4T07
130.2
249.8
340.1
1Q07 4Q07 1Q08
↑161,2%
↑36,2%
Price range up to R$130 thousand is also growing in sales mix ...
... and will grow even further, reflecting increased launches in this
price range.
Land Bank (%MRV)
11
R$ Million
April 30th,2008 (%MRV)
LANDBANK PER STATEPSV
R$Million% per State
#
Projects
# Units
(Thousand)
Average Price
(R$'000)São Paulo 6.496,4 63,4% 131 64,8 100,3
Minas Gerais 1.532,7 14,9% 59 18,3 83,9
Rio de Janeiro 277,8 2,7% 15 3,4 82,9
Goiás 492,4 4,8% 14 5,5 89,9
Rio Grande do Sul 252,5 2,5% 13 2,5 103,0
Espírito Santo 350,4 3,4% 6 4,0 86,8
Paraná 232,2 2,3% 13 2,1 111,1
Distrito Federal 25,6 0,2% 3 0,3 100,6
Santa Catarina 177,8 1,7% 9 1,8 100,6
Ceará 132,6 1,3% 6 1,5 89,0
Bahia 31,3 0,3% 3 0,3 97,8
Rio Grande do Norte 231,6 2,3% 2 2,6 89,2
Mato Grosso do Sul 19,3 0,2% 1 0,3 59,4
TOTAL 10.252,5 100,0% 275 107,2 95,6
163 177
1.433
10.009
10.122 10.087 10.252
2004 2005 2006 2007 jan/08 mar/08 abr/08
Landbank (R$'000)
apr/08
Landbank - Distribution April 30th,2008
Capitals and Metropolitan areas 47.0%
Secondary Cities 53.0%
... and an exceptional quality:
located in urban areas.
Our land bank has an
unique diversification...
Net Operating Revenue (R$’MM )
12
Consistent growth of Net Operating Revenue reflects the strenght of our homebuilding
structure.
61.5
128.9
184.0
0
20
40
60
80
100
120
140
160
180
200
1Q07 4Q07 1Q08
↑199,0%
↑42,7%
Gross Profit (R$’MM ) and Gross Margin (%)
13
Healthy margin due to the Company’s efficiency and strong market conditions.
22.8
54.7
75.7
37.0%
42.4%41.1%
0
10
20
30
40
50
60
70
80
1Q07 4Q07 1Q08
Gross Profit (R$'MM) % Gross Margin
↑232,2%
↑38,3%
4.0%
4.4%
5.2%
1Q07 4Q07 1Q08
Productivity Indicators – Selling Expenses
14
Selling Expenses (R$ ‘000) and
Selling Expenses / Net Operating Revenue (%)
Increase in selling expenses reflects the growth in contracted sales...
5.2
10.9
17.7
8.4%
8.5%
9.6%
0
2
4
6
8
10
12
14
16
18
20
1Q07 4Q07 1Q08
Selling Expenses / Contracted Sales (%)
8.1%7.8%
4.8%
1Q07 4Q07 1Q08
Productivity Indicators – G&A Expenses
15
G&A (R$’000) and
G&A / Net Operating Revenue (%)
10.5
19.5
16.4
17.1%15.1%
8.9%
0
5
10
15
20
25
1Q07 4Q07 1Q08
G&A (R$’000) and
G&A / Contracted Sales (%)
... And management has gained efficiency with the upward operational scale.
EBITDA (R$’MM ) and EBITDA Margin (%)
16Note: EBITDA in 4Q07 and in 1Q07 excludes non-recurring IPO expenses and for the entry of new shareholder
Consistent EBITDA margin demonstrates operational strenght...
12.4
32.1
44.5
20.2%
24.9%
24.2%
0
5
10
15
20
25
30
35
40
45
50
1Q07 4Q07 1Q08
↑258,5%
↑38,5%
Net Income (R$’MM ) and Net Margin (%)
17
... that also results in an extremely healthy net margin.
8.2
45.4
50.8
13.4%
35.2%27.6%
0
10
20
30
40
50
60
1Q07 4Q07 1Q08
↑515,4%
↑11,8%
Note: Net Income in 4Q07 and in 1Q07 excludes non-recurring IPO expenses and for the entry of new shareholder
Unearned Results (R$’000)
18
R$'000 1Q08 4Q07 1Q07Var%
1Q08 x 4Q07
Var%
1Q08 x 1Q07
Unearned sales revenues 606.988 438.326 179.031 38,5% 239,0%
Unincurred cost of units sold (298.010) (208.048) (85.997) 43,2% 246,5%
Unearned results 308.978 230.278 93.034 34,2% 232,1%
Unearned Margin 50,9% 52,5% 52,0% -1,6 p.p. -1,1 p.p.
Our efficiency and consistency in real estate operation can be translated into the strength
of our unearned results.
Outlook
19
MRV continues to believe firmly in the growth of the construction market and this belief has been guiding
our operational plans. Below is our revised outlook for 2008:
20082008
Revised
PSV (%MRV - R$'MM) 2,000 ~ 2,200 2,500 ~ 2,800
Contracted Sales - R$'MM 1,500 ~ 1,700 1,800 ~ 2,000
Gross Margin 40% ~ 44% 40% ~ 44%
EBITDA Margin 24% ~ 28% 24% ~ 28%
Net Margin 21% ~ 25% 21% ~ 25%
Disclaimer
20
This release contains forward-looking statements that are not merely historical facts
but reflect the goals and expectations of MRV Engenharia’s management. Words
such as “anticipates”, “believes”, “may”, “will”, “expects”, “intends”, “plans”,
“estimates” or similar expressions are forward-looking statements. Though we believe
that these forward-looking statements are based on reasonable assumptions, they
are subject to risks and uncertainties, and are based on information currently
available with MRV Engenharia. This presentation is current as of end 1Q08 and
MRV Engenharia takes no responsibility to update it with new information and/or
forward-looking statements. MRV Engenharia is not responsible for investments or
investment decisions based on information contained in this presentation.
Contacts
21
Leonardo Corrêa
Executive VP and Investor Relations Officer
Mônica Simão
Financial Director
Telephone: (31) 3348-7171
E-mail: [email protected]
www.mrv.com.br/ri
