1. 1. Presentation of 1Q08 Results May 13, 2008
2. 2. Comments on the 1Q08 2 Leonardo Corra Executive Vice-President and Investor Relations Officer
3. 3. 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. 4. 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$'000 R$ 25,760 Net Operating Revenue R$'000 R$ 140,306 Net Operating Revenue R$'000 R$ 384,120 2005 2006 2007 PSV R$'000 (%MRV) ContractedSales R$'000(%MRV) NetOperating RevenueR$'000 (%MRV)
5. 5. MRV LOG 5 Business: Development, contract Warehousing, rental of Distribution Centers, Industrial Condominiums, HUBs and Logistics Park; Shareholders: MRV Engenharia e Participaes S.A. (65%) and Autonomy Investimentos S.A. (35%); Capital Commitment: R$ 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.
6. 6. Operational and Financial Performance 6
7. 7. 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$50.8 million, and adjusted net margin was 27.6%. Net income grew 11.8% over 4Q07. Highlights 7
8. 8. 3.066 2.697 3.861 5.478 6.768 6.919 1.439 1.688 1.769 2.218 3.002 4.852 9.340 18.410 2.906 3.579 2002 2003 2004 2005 2006 2007 1T07 1T08 FGTS SBPE Real Estate Market for the Low-Income Segment Credit Expansion Fonte: CBIC - Boletim Estatstico Jan/2008; Bacen, Abecip 1Q08: january and february 2008 Source: BACEN, CEF and CBIC at www.cbicdados.com.br Note: The number of units financed with SBPE resource is obtained trhough the summ of financing for real estate acquisition (new and used) and for construction (which from January 2008 on, also included Building Materials, refurbishment and expansion) 8 163.423 135.006 197.286 283.785 241.049 247.684 320.251 398.671 522.301 526.208 98 99 2000 01 02 03 04 05 06 07 FGTS SBPE FUTURO TOTAL SBPE + FGTS OUTSTANDING AMOUNTS AND CONTRACTED VOLUME (R$MM) N OF UNITS FINANCED TRHOUGH FGTS AND SBPE ... Outstanding SBPE + FGTS amount is sufficient to finance the increased demand in this market.
9. 9. 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.
10. 10. 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$130 thousand is also growing in sales mix ... ... and will grow even further, reflecting increased launches in this price range.
11. 11. Land Bank (%MRV) 11 R$ Million April 30th,2008 (%MRV) LANDBANK PER STATE PSV R$Million % per State # Projects # Units (Thousand) Average Price (R$'000) So 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 Gois 492,4 4,8% 14 5,5 89,9 Rio Grande do Sul 252,5 2,5% 13 2,5 103,0 Esprito Santo 350,4 3,4% 6 4,0 86,8 Paran 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 Cear 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$'000) apr/08 Landbank - Distribution April 30th,2008 Capitals and Metropolitan areas 47.0% Secondary Cities 53.0% ... and an exceptional quality: located in urban areas. Our land bank has an unique diversification...
12. 12. Net Operating Revenue (R$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%
13. 13. Gross Profit (R$MM ) and Gross Margin (%) 13 Healthy margin due to the Companys efficiency and strong market conditions. 22.8 54.7 75.7 37.0% 42.4% 41.1% 0 10 20 30 40 50 60 70 80 1Q07 4Q07 1Q08 Gross Profit (R$'MM) %Gross Margin 232,2% 38,3%
14. 14. 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 (%)
15. 15. 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$000) and G&A / Contracted Sales (%) ... And management has gained efficiency with the upward operational scale.
16. 16. EBITDA (R$MM ) and EBITDA Margin (%) 16 Note: 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%
17. 17. 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
18. 18. Unearned Results (R$000) 18 R$'000 1Q08 4Q07 1Q07 Var% 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.
19. 19. 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: 2008 2008 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%
20. 20. Disclaimer 20 This release contains forward-looking statements that are not merely historical facts but reflect the goals and expectations of MRV Engenharias 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.
21. 21. Contacts 21 Leonardo Corra Executive VP and Investor Relations Officer Mnica Simo Financial Director Telephone: (31) 3348-7171 E-mail: ri@mrv.com.br www.mrv.com.br/ri