BRASIL BROKERS RESULTS 3 rd Quarter 2008 2008 Brasil 2008 Brokers Brasil Brokers Todos os Direitos Todos os Reservados Direitos Reservados
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 Brasil Brokers Participações S.A. related to the quarter ended on September 30, 2008. 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 Brasil Brokers 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 Brasil Brokers 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. Brasil Brokers believes that based on information currently available to Brasil Brokers management, the expectations and assumptions reflected in the forward-looking statements are reasonable. Lastly, Brasil Brokers expressly refuses any duty to update any of the forward-looking statements contained herein. 1
Agenda Company Operating Highlights 3 rd Quarter Results/2008 Financial Highlights 2
3Q08 Acquisitions 3
Company 26 Subsidiaries Manaus Belém Natal Recife Operating in 14 states and in Brasília Salvador 9,177 Brokers 832 Points of Sales Porto Velho Goiânia Distrito Federal São Paulo Belo Horizonte Vitória Rio de Janeiro Curitiba Florianópolis Porto Alegre States where Brasil Brokers has subsidiaries Brasil Brokers operates through its subsidiary Primaz 4
Primary Market 3Q08 Developers 5.6 Contracted Sales Developers (R$ Bi) Contracted Sales Brasil Brokers (R$ Bi) -24% 4.3 2.7-5% 2.6 2Q08 3Q08 2Q08 3Q08 Considering companies: CCDI, CR2, Cyrela, Even, EZTEC, Gafisa, Helbor, JHSF, Klabin Segall, MRV, PDG Realty, Rodobens, Rossi. 5
Operations Expansion Salvador São Paulo (Capital) Rondônia 6
Company Operating Highlights 3 rd Quarter Results/2008 Financial Highlights 7
Primary Market - Launches Launched PSV (R$ MM) Launched Units 5,254-19% 21,018-1% 20,782 64% 4,275 78% 3,199 11,758 1Q08 2Q08 3Q08 1Q08 2Q08 3Q08 307% 4,275 245% 20,782 1,050 6,030 3Q07 3Q08 3Q07 3Q08 8
Primary Market Contracted Sales Contracted Sales in the Primary Market (R$ MM) Contracted Units in the Primary Market 2,086 17% -9% 1,908 11,813-13% 1,784 31% 10,238 9,039 1Q08 2Q08 3Q08 1Q08 2Q08 3Q08 9
Primary Market - Contracted Sales per Region SP Primary Market Contracted Sales (R$ MM) RJ Primary Market Contracted Sales (R$ MM) 642 30% 835-18% 686 376-10% 339 0% 339 1Q08 2Q08 3Q08 1Q08 2Q08 3Q08 Other States Primary Market Contracted Sales (R$ MM) 835 9% 911-3% 883 1Q08 2Q08 3Q08 10
Primary Market - Contracted Sales by Income Segment 2Q08 3Q08 High (above R$650 k) R$220MM Mid-High (R$350- R$650 k) R$346MM 17% 10% 11% Economic (up tor$100 k) R$238MM 21% Mid-Low (R$100- R$150 k) R$429MM Mid -High (R$350 - R$650 k) R$405MM High (above R$650 k) R$166MM 21% 9% 9% Economic (up to R$100 k) R$172MM 16% Mid -Low (R$100 - R$150 k) R$300MM 41% 45% Middle (R$150-R$350 k) R$853MM Middle (R$150 -R$350 k) R$865MM 11
Contracted Sales - Secondary Market Secondary Market Contracted Sales (R$ MM) Secondary Market Contracted Units 30% 521-12% 459 14% 2,639-1% 2,620 400 2,321 1Q08 2Q08 3Q08 1Q08 2Q08 3Q08 12
Total Contracted Sales Contracted Sales (R$ MM) Contracted Units 2.404 13% 2.713-5% 2.583 11.360 27% 14.452-11% 12.894 1Q08 2Q08 3Q08 1Q08 2Q08 3Q08 12,894 191% 2,583 165% 887 4,862 3Q07 3Q08 3Q07 3Q08 13
Integration and Synergy Strategic Goals Improve commercial efficiency and revenues Costs Reduction Standardize systems and processes FRONTS Finance / Accounting Management Processes and Systems Human Resources Marketing Primary Market Implementation of the Best Practices in all Subsidiaries. Secondary Market New Products / Services Business Opportunities 14
Synergy Program FRONTS KEY ACCOMPLISHMENTS UP TO 3Q08 4Q08 PLANS Finance and Accounting Standardization of accounting practices. Centralization of the accounting process. Management Processes and Systems SAP implemented in 16 subsidiaries before IPO; SAP training for 120 employees; Standard Operating Model - resales and launches; Installation of the Processes and Systems Committee. Implementation of SAP in all 10 companies acquired after IPO; Implementation: Unique Sales System: Resales Module and Launch Module; Standard Operating Procedure for Sales. 15
Synergy Program FRONTS KEY ACCOMPLISHMENTS UP TO 3Q08 4Q08 PLANS Human Resources Training of 199 managers in the "Sales Force Management Training Program"; Over 157,000 hours of training for sales force; Management model - establishment of targets and performance-based compensation; National Employees and Brokers Database; Installation of the Human Resources Committee. Internal Communication and Endomarketing Model; 1 st Sales Manager Development Workshop; Brasil Brokers Professional Development Model; Training over 75 managers in the Sales Force Management Training Program"; 40,000 additional hours of training for sales force. Marketing Brasil Brokers' Campaigns and Events client developers and internal team; Installation of Marketing Committee. Beginning of the development of Brasil Brokers' new portal. 16
Synergy Program FRONTS KEY ACCOMPLISHMENTS UP TO 3Q08 4Q08 PLANS Primary Market Preparation of a business model for selling units under construction (Remaining); Identification of the best operational practices and sales force organization; Merger of DelForte and Iprice. Implementation: Business Model for units under Construction (Remaining); Operational Standards for Launch Sales. Secondary Market Preparation of the best operational practices and sales force organization. Implementation: Operational Standards; Better operational practices and sales force organization. 17
Synergy Program FRONTS KEY ACCOMPLISHMENTS UP TO 3Q08 4Q08 PLANS New Products / Services Identification of the best operational practices - real estate financing; Implementation of the real estate financing structure in 4 subsidiaries; Implementation of the Real Estate Financing Committee. Implementation of the best operational practices for real estate financing in all subsidiaries; Continuation of the implementation of the real estate financing structure in all other subsidiaries. Business Opportunities Cross-compensation model among subsidiaries. Process of business origination and results control. 18
Reduction Expenses Plan Expenses Group Implemented reduction accomplishments (R$ MM) Future Reduction Planned (R$ MM) % Implemented Human Resources 11.1 3.0 79% General Expenses 4.5 1.0 82% Marketing 4.8 1.0 83% IT / Telecom 2.1 1.5 58% Occupation 2.0 0.4 83% Third parties services 0.5 0.1 83% Total 25.0 7.0 78% Reduction Expenses Target: R$ 32 Million/Year (Equivalent to 20% of Total Expense) 19
Company Operating Highlights 3 rd Quarter Results/2008 Financial Highlights 20
Operating Schedule Brokers Avance Brito & Amoedo Del Forte Gribel I. Price Niterói Administradora Pactual Primaz Ética Imobiliária Noblesse Américas Basimóvel Paulo Sardenberg Tropical Abreu Chão & Teto Jairo Rocha Frema Rede Morar JGM Redentora Marcos Koenigkan Global Pointer Triumphe Abyara Brokers Operating Subsidiaries 2 nd Quarter 2008 3 rd Quarter 2008 APR MAY JUN JUL AUG SEP 21 21 24 24 24 24 100% Operating 21 21 24 24 24 24 Parcial Start 0 0 0 0 0 0 21
Financial Highlights Net Revenue (R$ MM) 64.8-17% 53.7 2Q08 3Q08 9M08 Net Revenue reached R$ 170.8 MM. 22
Financial Highlights Total Cost and Expenses (R$MM) 2Q08 3Q08 Total Cost and Expenses - Subsidiaries (30.0) (37.3) Cost of Services (7.4) (7.7) General and Administrative Expenses (22.6) (29.6) Holding Adjusted Expenses (3.1) (3.4) Adjusted Total Cost and Expenses (33.1) (40.7) 3.3 1.9 37.3 2.0 30.0 2Q08 New Branches Subsidiaries Addition Structure Growth 3Q08 23
Financial Highlights Adjusted Net Income (R$ MM) and Adjusted Net Margin (%) 29.6-62% 46% 11.3 21% 2Q08 3Q08 9M08 Adjusted Net Income totaled R$ 65.8 MM with Net Margin of 38.5%. (1) Adjusted Net Income is not an account method, consist in the period net profit less the goodwill amortization, present value adjustment and non-recurring expenses. 24
Reconciliation (R$ MM) 2Q08 3Q08 Adjusted Net Income 29.6 11.3 Financial Results (6.8) (5.9) Income Tax and Social Contribution 8.4 6.8 Non Operating Result (0.1) (0.1) Depreciation and Amortization 0.5 0.8 Minority Interest 0.1 0.0 Adjusted EBITDA (1) 31.6 12.9 Adjusted EBITDA (R$ MM) Adjusted EBITDA Margin 48.8% 24.1% 31.6-59% Financial Highlights 12.9 2Q08 3Q08 9M08 Adjusted EBITDA was R$ 70.0 MM with EBITDA (2) Margin of 41.0%. (1) Adjusted EBITDA consists of income before net financial result, income tax and social contribution tax, depreciation and amortization 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.. 25
IR Contact Álvaro Soares CFO and IRO Bruno Di Filippi IR Analyst Phone: (55 21) 3433-9550 e-mail: ri@brbrokers.com.br www.brbrokers.com.br 26